Monday, May 18, 2009

"Doomsday" projected without tax hike

By Bethany Jaeger and Jamey Dunn
Gov. Pat Quinn tried to bolster his case for the need to raise state income taxes by describing drastic cuts — including laying off thousands of teachers and state police troopers and discontinuing health care for hundreds of thousands of people — if the legislature failed to approve an income tax increase within the next two weeks.

Public employee unions and human service providers immediately warned that a “doomsday budget” would threaten their members and the general public, especially when education and social services are most needed during an economic recession. State legislators, meanwhile, remain split on the need to raise taxes, cut spending or both to balance next year’s operating budget. Quinn estimates that the state faces at least an $11.6 billion deficit when combining this fiscal year and next.

While speaking at a City Club of Chicago luncheon today, the governor said he is telling people what they need to know, not what they want to hear. “Right now, it’s a very hard time, and people don’t like to pay taxes to begin with, and especially in hard times. But if we don’t use the public revenue of Illinois to help rescue our state economy, we’re going to continue in hard times.”

He projected a “slash and burn” budget that would cut $7.5 billion from state spending and rely on $4.1 billion from the federal stimulus funds. The cuts would include:
  • $1.5 billion from education, resulting in the loss of 14,300 teachers and eliminating preschool for 100,000 children.
  • $554 million from higher education, affecting 400,000 college students who would lose their state financial aid grants.
  • $1.2 billion from health care, leading 650,000 people of all ages to lose state-sponsored programs for prescription drugs and retirement health care.
  • $368 million from senior services, ending services for 271,000 seniors who currently use programs for community care, elder abuse and neglect and Circuit Breaker property tax relief.
  • $27 million from veterans’ care, closing four veterans’ homes and eliminating a program to treat traumatic brain injuries and post traumatic stress disorders.
  • $769 million from human services, eliminating home care for 5,000 people with disabilities and addiction treatment and prevention for another 45,000 people, as well as child care for 1,000 children.
  • $549 million from economic development, eliminating all state funding for public transit and AMTRAK.
  • $98 million from agriculture and natural resources, erasing funding for state fairs and closing 60 parks and every museum in the state.
  • $1 billion from local governments, which would affect their ability to fund public safety and other local services.
  • $294 million from public safety, laying off nearly 1,000 state troopers and releasing about 6,000 prisoners early from their detentions.

“I would say to those legislators who think the only way to get to a balanced budget is to cut everywhere we can, maybe they could take some of those prisoners home to their own house when they get out of jail,” Quinn said, drawing laughs and applause from the audience.

However, opponents to Quinn’s proposed income tax increase said the plan is a ploy to scare people into accepting higher taxes. Sen. Matt Murphy, a Palatine Republican, said he thinks Quinn’s proposal is a “gimmick.”

“I think his doomsday budget was the one he put out on March 18 with the biggest tax hike in state history,” he said. “That would cost people their jobs in a recession, and I think that’s the real doomsday.”

Murphy, co-chair of the Senate Deficit Reduction Committee, issued a report along with the other Republicans suggesting cuts that could help balance the budget, highlighting changes in the Medicaid system. “We can balance this budget without raising taxes and without having the draconian cuts that [Quinn] put out today,” he said. “It’s not going to be pain-free. It’s not going to be easy. If it were easy, we wouldn’t be in this situation.” Murphy added that he is disappointed the potential budget cuts that the committee considered have not been a major part of the discussion.

Sen. John Sullivan, a Rushville Democrat and member of the same committee, added that he is concerned cuts to health care and education, two of the largest parts of the budget, would jeopardize the state’s access to federal stimulus dollars. “Because of federal stimulus money that the state of Illinois will be receiving, we cannot reduce eligibility for Medicaid or health care services. And also, with regard to education, we cannot lower our appropriations,” he said.

Others say it’ll take both: cuts and tax increases. Rep. Linda Chapa LaVia, an Aurora Democrat who chairs the appropriations committee for elementary and secondary education, said taxpayers will need to see that the state is cutting as much as it can before they’ll accept paying increased taxes.

Sen. Donne Trotter, chief budget negotiator for the Senate Democrats, said he thinks approving a tax increase would be easier for legislators than approving drastic cuts outlined by Quinn’s office. He said: “Our problem is not finding a revenue source. It’s agreeing on one. There’s so many options out here, and we’ll just have to wait and see, as we progress, which one it is going to be.”

Trotter said he didn’t think a tradition such as the Illinois State Fair would really be cut. But, he said, people should take Quinn’s so-called doomsday budget seriously because cuts will be necessary to balance the budget. “There’s going to have to be some reductions. We can’t tax our way out of this,” he said.

Quinn stuck to his message that Illinois needs a permanent income tax increase, as opposed to a temporary increase, to manage the structural deficit and to “deal with reality in the 21st century.”

“Very few governors say, ‘Let’s raise taxes.’ But if you have to do it in order to make the people stronger today and in the long run, so be it.”

Meanwhile, legislative leaders met again behind closed doors this evening to talk about a major construction program funded by various tax and fee increases. Expect movement on that plan as soon as tomorrow.

1 comment:

Anonymous said...

A letter from Lori Rickman-Jones, IDHS Director of Mental Health, went out last week notifying Illinois MH service providers about budget cuts, and telling them that the only program NOT being cut 100% is “supervised residential” services. Below are the cuts by program name and DMH #.
Juvenile Justice 121 100%
Community Consumer Support 213 100%
Psychiatric Services 350 100%
Special Projects 510 100%
Direct Clinical Services 515 100%
Supported Employment 516 100%
Gero-Psychiatric Services 540 100%
CHIPS 550 100%
Psychiatric Medications 574 100%
Supported Residential 820 100%
Supervised Residential 830 43%