Wednesday, June 06, 2007

Pondering pensions and leasing the lottery

Unfunded liabilities for public employee pensions was the subject of the second day of leaders’ meetings in Gov. Rod Blagojevich’s Statehouse office. Democratic and Republican leaders talked about the administration’s ideas to pay down some $41 billion in liabilities by a) issuing $16 billion in bonds and b) leasing the Illinois Lottery to generate $10 billion in new revenue. Thursday’s leaders’ meeting is scheduled to be about gaming and mass transit.

But the leaders said they’re no closer to agreeing on a budget today than they were before the May 31st deadline. Today’s meeting was “a couple of steps forward, two steps backwards, inch by inch,” said Senate President Emil Jones Jr. He later added, “Right now we do not have a budget. The proposed budget they voted on in the House is a budget that’s unbalanced.”

House Speaker Michael Madigan is set on his limited-growth budget that would allow a 3 percent increase in spending with no new programs. “I will repeat what I said about 10 times in the meeting: The House has passed a budget; the House has passed a budget. In due time the Senate can pass it with 36 Democratic votes, and the state will have spending authority for the next 12 months.”

As far as leasing the Lottery, Madigan said he’s willing to take a “good hard look” at the whole proposal. However, he doesn’t think the idea has enough support in his chamber. “The bottom line is that the state would lose somewhere in the future,” he said. “It will lose whatever money comes out of the Lottery today.”

On the Republican side of the House, Minority Leader Tom Cross said that leasing the Lottery sounds like a “financially smart thing to do” as long as the money goes where the governor promised it would go: the state’s unfunded pension liability.

In the Senate, Minority Leader Frank Watson said he’s also concerned that leasing the Lottery isn’t responsible. “That’s the problem with this administration. They haven’t been fiscally responsible for the future. It’s all about today. And that’s what concerns us. That’s what concerned us three years ago.”

He also gives us today’s big picture item about Madigan’s budget: “The speaker calls it the high-water mark budget for the House, and I’d say if that’s what he says, then I would assume that’s got to be the high-water mark for the Senate.” But one thing Watson said the speaker’s budget doesn’t take into account is the growth of Medicaid, which he said is “totally out of control” with $585 million expected natural growth next year even without expansions of eligibility for public aid. He perceived the governor as willing to meet throughout the summer. “You could sense that he’s not in any big rush to get out of here.”

Keeping 25 alive
Meanwhile, Rep. Lou Lang, the Skokie Democrat and one of the lead reps on gaming issues, is trying to keep gaming expansion as a viable option for budget deliberations. Despite Madigan’s previous comments that the idea to create four new casinos also doesn’t have enough support in his chamber, the speaker spent some time listening during Lang’s 2.5-hour gaming committee hearing Wednesday morning.

“Just because the speaker believes there’s not enough support today doesn’t mean there won’t be enough support tomorrow,” Lang said after committee. While Lang’s not sold on the Senate version of legislation that would create four new casinos, he said, “I intend to try to keep the gaming issue alive, and if the way to do that for now is to keep HB 25 alive and not kill it, then that’s what I’m going to do.”

Yes, Madigan let gaming be heard, but he also issued a “warning” memo that indicates four new casinos still aren’t in his minimal-growth budget.

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