Thursday, April 19, 2012

Quinn preempts pension and Medicaid working groups

By Jamey Dunn 

Gov. Pat Quinn tasked two legislative groups to recommend fundamental changes to the state’s Medicaid and pension systems. Neither of those groups has produced a final plan, but the governor is pushing ahead with his own recommendations.

Quinn released his plan for reducing growth in the state’s Medicaid budget by the $2.7 billion he said is needed. The working group charged with finding the reductions said they were only able to come up with about $1.4 billion in cuts. Quinn’s plan calls for almost that much in savings and then adds on a rate cut to providers and a $1-a-pack cigarette tax increase to reach the $2.7 billion goal. Sen. Dale Righter, a member of the Medicaid working group, said that Quinn has “surrendered” on reaching his own goal because he is proposing raising new revenues instead of making more cuts. “While were still six weeks out from the end of session, the governor is waving the white flag and saying, ‘You know we’re really not going to change the system that much, and we’re going to go ahead and raise taxes.’”

A $1-a-pack cigarette tax increase has been pitched in recent years as a place to find new revenue for construction or to avoid deep unpopular cuts to areas such as in health care and education. A cigarette tax increase passed in the Senate in 2009 but failed to get the needed support in the House. Senate President John Cullerton is a vocal supporter of a tax increase on cigarettes. “Like the governor, Cullerton recognizes the imperative of increasing revenue to stabilize the Medicaid system,” Rikeesha Phelon, a Cullerton spokeswoman, said in a prepared statement. “By raising the cigarette tax, we would benefit from federal matching dollars, we could cut costs associated with tobacco related illnesses, and we discourage young people from smoking.”

Righter, a Republican from Mattoon, said the legislative group plans to continue its work and will meet next week. “The working group’s not done. This is not the working group’s plan. This is the governor’s plan. And we don’t view the goal as the governor said of $2.7 billion in reductions as a goal. It’s a mandate,” said Mattoon Republican Sen. Dale Righter. “This is what you have to do to save the program for the people in the sate who need it the most. And so we’re ready to go back to work beginning Tuesday.”

Rep. Patty Bellock, another member of the group, said that making cuts while still preserving the integrity of the system will be difficult. “This is not an easy job. You’re talking about children on ventilators. You’re talking about seniors in wheelchairs. You’re talking about the most fragile population in Illinois,” Bellock, a Hinsdale Republican, said: “We want to do it right. But we also want to do it in a comprehensive caring way.”

But one thing that the governor and legislators on both sides seem to agree on is that the Medicaid liability must be drastically reduced to save the system from collapse.

Gov. Pat Quinn also called for a legislative working group to put forth proposals for reforming the state’s public employee retirement system by the beginning of this week, but that group was unable to reach an agreement.

“At my direction, this group is working with all interested stakeholders to solidify a framework for solving our pension challenges. I have set Tuesday, April 17, as the deadline for submitting their blueprint,” Quinn said during his February budget address. "I want to repeat: Everything is on the table for our pension working group. Historical funding practices, employer contributions, employee contributions, the retirement age, and the cost of living adjustment.”

Quinn is expected to unveil his own set of proposals tomorrow. “I think the governor is going to announce tomorrow what he thinks ought to be done,” said Sen. Bill Brady, a member of the group.

Brady, a Bloomington Republican, said that he expects Quinn’s proposal to contain some recommendations the group agreed upon and some they did not.

“It’s 24 hours away, but that’s sort of what we’re anticipating right now,” said Rep. Elaine Nekritz, who is representing House Democrats on the working group. The group was still holding meetings this afternoon. She said that the proposals were delayed not because negotiations met an impasse but because of the logistics of trying to tackle the two major issues of Medicaid and pension reform in just a few months. “I think the delay is more due to interactions with Medicaid and some of the other things going on,” she says. “I think it has less to do with pension stabilization and more to do with all the really big issues that are swirling around here,’ said Nekrtiz, a Northbrook Democrat.

However, Brady said that the lack of a presence from public employee unions has slowed the process. “One of the biggest reasons is we’ve asked labor to come and discuss it with us,” Brady said. “They have not accepted our invitation.” Brady said the pension group also plans to continue its work and has a meeting  scheduled for next week.

Union officials say they have pulled out of the talks because they are unsure whether the working group is engaging in earnest negotiations. They are concerned that the members may not have the authority to speak for Quinn and the legislative leadership, so the bargaining may not be backed by a real ability to get whatever deal is reached approved by the full General Assembly.

Nekritz balked at that idea. “There’s been a process put in place, and I have had no indication from my leader, [House Speaker Michael Madigan], that that’s not on the table,” she said. “My understanding is that this is where it’s happening. If they don’t believe that, I can’t help that.”

"Early in the process, we requested relevant data to analyze the impact of any proposal made by the working group. To this date, we have received no data. In addition, despite previous assurances that the working group was empowered to speak for the governor and all the legislative leaders, it is no longer clear that that is the case,” Michael Carrigan said in a written statement on behalf of the union coalition We Are One. “Our unions are firmly committed to negotiating a solution to the pension funding crisis. However, to go forward, we need both the data supporting any proposals and a commitment that the representatives with whom we engage are authorized to speak for the governor and the legislative leaders.” Carrigan said in the statement that the group met with legislators working on pension reform on three occasions but that he does not know what will be in their proposal.

When asked if the push to release a plan not agreed upon by the working group might confirm Carrigan’s suspicions, a spokeswomen for Quinn said that the governor is most concerned with “moving the ball down the field.”

Brooke Anderson, the Quinn spokeswomen, said, “The governor in his budget address set deadlines, and we gave the working groups even a few days after those deadlines.” Brooks said that the longer the programs -- especially Medicaid -- go without reform, the more urgent the situation becomes. “I think the concern here and the priority is that we save the Medicaid system and that we save the pension system.”

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