By Jamey Dunn
If one of the Republican primary candidates ultimately wins the race for governor, he will face some challenging budget conditions.
The temporary income tax increase, which was approved in 2011, will begin to sunset during the last half of next fiscal year. Projections from Gov. Pat Quinn’s budget office estimate that Illinois will have a $2 billion budget deficit by the end of Fiscal Year 2015 and $7.5 billion in unpaid bills.
During the Republican debate last week, GOP candidates shared some of the ideas and qualifications they would bring to the table when looking to address the state budget.
Sen. Kirk Dillard touted his experience working under former Republican Gov. Jim Edgar. “We inherited a $1 billion deficit in a recession and left a $1.5 billion surplus, all without an income tax increase,” Dillard said. He noted that during Edgar’s time in office, the state’s credit rating went up and the backlog of overdue bills was paid down.
It is true that Edgar’s administration started off with a budget deficit and left office with a budget surplus and paying the state’s bills on time. Edgar made some difficult budget choices, including cuts to Medicaid. The income tax did not increase.
However, after being elected in 1990, Edgar made a temporary income tax hike permanent. He told Illinois Issues at the time that the cuts that would be needed to allow the increase to sunset would have been too deep. “There's no way you can make that amount of cuts without cutting into programs that I think everyone agrees are necessary.” Making the increase permanent was part of the platform Edgar ran on. "I won with everybody knowing my position. Nobody can be surprised on that one,” he said.
The budget recovery was also helped along by the economic boom of the mid-1990s. When Edgar took office, the country was in recession and Gross Domestic Product growth was nonexistent. By the time he left in 1999, GDP growth was almost 5 percent. Over the same period, the federal government went from a $269.3 billion deficit to a $125.6 billion surplus. Economic growth could go a long way toward improving the state’s current fiscal condition, but the kind of economic bubble the country experienced in the '90s is not likely to reoccur in the foreseeable future.
State Treasurer Dan Rutherford said he plans to conduct a performance review of all state agencies, similar to one he did when he entered his current office. Rutherford pointed to budget cuts he has made as treasurer. “I cut the budget of the state treasurer’s office by 2 percent, next fiscal year 3 percent and then 5 percent — a total of 10 percent. I’ve got the experience to do that,” he said.
Rutherford has not yet made that 5 percent cut but plans to call for it under his budget for next fiscal year. He has managed to cut his office’s budget over the last few years. Some of the substantial reductions include closing the treasurer’s satellite offices throughout the state, reducing staff through attrition, cutting the vehicle fleet and reducing phone lines.
The general fund budget for the treasurer's office in the current fiscal year is about $9 million. To call it a drop in the bucket of the overall General Revenue Funds budget would be an overstatement. While Rutherford’s cost-saving measures do seem to be effective for his office, many state agencies have made similar moves to cut costs. There are only so many cars, phone lines and employees you can get rid of and still do the business of state government. Agencies that provide social programs, such as Medicaid, must have offices throughout the state that applicants can reach. To bridge the revenue gap that will follow the sunset of the tax increase, it will take more than such nibbling around the edges of the budget.
Sen. Bill Brady pointed to recent pension reform legislation as a good start on tackling Illinois’ budget troubles. “It will save the taxpayers $190 billion,” he said.
Brady has his savings number wrong. In reality, the plan was originally estimated to save about $160 billion over 30 years. But new estimates from the retirement systems now peg the savings at about $145 billion. The new law will have to survive a court challenge to produce any savings.
Brady also said he would eliminate the Illinois State Board of Education.
Again, ISBE’s spending makes up a small fraction of overall education costs. Brady said he would create a department under the governor’s office to oversee education. Such a department would presumably have staff, need office space, phone lines, even a travel budget. So the spending now going to ISBE would not be totally eliminated. When former Gov. Rod Blagojevich proposed a similar idea, his department of education would have cost about 80 percent as much as ISBE did at the time. Brady said his idea is not just about the savings but would “end the bureaucratic red tape that harms our children’s educational opportunities every day.”
He failed to mention however, that most of the mandates imposed on schools are voted into law by the Illinois General Assembly.
Bruce Rauner said he would focus on fighting union bosses, who he says are driving up the cost of government operations. He said he wants to use creative negotiating tactics, such as those employed by former Indiana Republican Gov. Mitch Daniels.
Daniels put a merit pay system in place in Indiana and effectively ended collective bargaining for public employees through an executive order in 2005. He was able to do that because the collective bargaining provisions were originally put in place through a previous executive order in 1989. Indiana lawmakers voted to codify Daniels' move in 2011, so future governors would not be able to restore collective bargaining with their executive power. Daniels signed that legislation into law.
“He used executive order and the power of the government office to stand up to the power of the government union bosses that control the state governments around the nation and are driving up costs and driving down productivity,” Rauner said. Since collective bargaining rights are written into Illinois law, such a move may not be so simple, or even possible, here.
Rauner, along with the other candidates, said he would find savings in the state’s Medicaid program, which he called “broken” and “corrupt”
“Based on studies that have come to light recently, it looks like close to half of the enrollees in our Medicaid system aren’t entitled to receive the benefits they’re getting, based on the report so far.” As part of sweeping Medicaid changes passed last year, the state is checking on Medicaid recipients to make sure they are eligible to receive benefits. So far, 315,000 cases have been reviewed, and 40 percent of those were found to be ineligible. But the first cases being tested were ones that were suspected of not being qualified for benefits. The benefits in most of these cases were canceled because there was no response to the requests for verification. The department does not expect the number to remain that high as it continues the verification process. “The cancellation rate is expected to come down because the reviews started with cases that had been flagged for having a discrepancy,” said a statement from the department.
While much of what the Republican candidates said about the budget during last week's debate was true, or mostly true, none of the candidates has offered a comprehensive plan for how he would address the budget shortfalls that will come as the tax increase steps down.
To be fair, neither has presumptive Democratic candidate, Gov. Pat Quinn. So far, Quinn has refused to talk about whether he would support an extension of the tax increase. By law, Quinn is required to propose an FY 2015 budget that is based on current revenues. His budget address is scheduled for February 19.
Showing posts with label Budget. Show all posts
Showing posts with label Budget. Show all posts
Monday, January 27, 2014
Tuesday, December 10, 2013
Little change for state's bond ratings so far
By Jamey Dunn
The major bond rating agencies are having mixed reactions to changes to Illinois' public employee pension systems that were approved and signed into law last week.
Standard & Poor’s rating services upgraded its outlook on the state’s borrowing from “negative” to “developing.” However, the state retains its A- rating from the agency. According to S&P, the new outlook means that the agency could raise or lower the state’s rating in the next two years. “The change reflects the consensus reached on pension reform, which we believe could contribute to a sustainable path to fiscal stability,” S&P credit analyst Robin Prunty said in a prepared statement. “Although we view the consensus achieved by Illinois on this difficult issue as positive from a credit standpoint, the developing outlook reflects the implementation risk — legal and budgetary — associated with various provisions of the pension reform, as well as the overall structural budget challenges facing the state.” The new outlook comes as Illinois is planning to sell $350 million in general obligation bonds later this week.
Gov. Pat Quinn highlighted the change as a positive byproduct of the pension cuts that lawmakers approved and he signed into law. “I am pleased the ratings agencies are recognizing that Illinois is moving in the right direction,” Gov. Quinn said in a prepared statement. “As I’ve always made clear, one of the many reasons to resolve Illinois’ pension crisis was the negative impact it had on our bond rating, which cost taxpayers more money to finance critical repairs and improvements to roads, bridges and schools. This improved outlook will be the first of many positive developments towards a revitalized and stronger Illinois.”
But a change in outlook does not constitute much positive forward motion for the state, especially given how much of a beating Illinois’ credit has taken in recent years. The two other major rating agencies, Moody’s and Fitch Ratings, both issued positive statements about the new law. But neither has opted to adjust the state’s rating or outlook. Both said they would analyze the law to determine the extent of its fiscal impact. Supporters say it will save $160 billion and fully fund the pension systems by 2043.
Public employee unions are expected to bring a lawsuit against the state because they say the pension cuts violate the state’s Constitution, which contains an explicit protection for retirement benefits. “[Senate Bill 1] won’t save a penny. The bill is unconstitutional, so it’s savings are an illusion. It’s only going to cost the state time and money and kick the can down the road all over again,” said a statement from the We Are One Union coalition. Moody’s said in a brief analysis issued after the bill passed last week, that it would be able to factor the changes in the new law into the state’s credit rating if and when they are upheld by the courts.
All three rating agencies acknowledge that the state is facing other budget issues besides pension reform, including the loss of billions of dollars of revenue when the temporary income tax increase sunsets. The tax rate begins stepping down in 2015. Fitch’s said that the state must address some of its budget challenges to hang on to its current rating, which is the lowest in the country. “In addition to action on pensions, maintenance of the rating will require timely action on a more permanent budget solution to the structural mismatch between spending and revenues in advance of the expiration of temporary tax increases.”
The major bond rating agencies are having mixed reactions to changes to Illinois' public employee pension systems that were approved and signed into law last week.
Standard & Poor’s rating services upgraded its outlook on the state’s borrowing from “negative” to “developing.” However, the state retains its A- rating from the agency. According to S&P, the new outlook means that the agency could raise or lower the state’s rating in the next two years. “The change reflects the consensus reached on pension reform, which we believe could contribute to a sustainable path to fiscal stability,” S&P credit analyst Robin Prunty said in a prepared statement. “Although we view the consensus achieved by Illinois on this difficult issue as positive from a credit standpoint, the developing outlook reflects the implementation risk — legal and budgetary — associated with various provisions of the pension reform, as well as the overall structural budget challenges facing the state.” The new outlook comes as Illinois is planning to sell $350 million in general obligation bonds later this week.
Gov. Pat Quinn highlighted the change as a positive byproduct of the pension cuts that lawmakers approved and he signed into law. “I am pleased the ratings agencies are recognizing that Illinois is moving in the right direction,” Gov. Quinn said in a prepared statement. “As I’ve always made clear, one of the many reasons to resolve Illinois’ pension crisis was the negative impact it had on our bond rating, which cost taxpayers more money to finance critical repairs and improvements to roads, bridges and schools. This improved outlook will be the first of many positive developments towards a revitalized and stronger Illinois.”
But a change in outlook does not constitute much positive forward motion for the state, especially given how much of a beating Illinois’ credit has taken in recent years. The two other major rating agencies, Moody’s and Fitch Ratings, both issued positive statements about the new law. But neither has opted to adjust the state’s rating or outlook. Both said they would analyze the law to determine the extent of its fiscal impact. Supporters say it will save $160 billion and fully fund the pension systems by 2043.
Public employee unions are expected to bring a lawsuit against the state because they say the pension cuts violate the state’s Constitution, which contains an explicit protection for retirement benefits. “[Senate Bill 1] won’t save a penny. The bill is unconstitutional, so it’s savings are an illusion. It’s only going to cost the state time and money and kick the can down the road all over again,” said a statement from the We Are One Union coalition. Moody’s said in a brief analysis issued after the bill passed last week, that it would be able to factor the changes in the new law into the state’s credit rating if and when they are upheld by the courts.
All three rating agencies acknowledge that the state is facing other budget issues besides pension reform, including the loss of billions of dollars of revenue when the temporary income tax increase sunsets. The tax rate begins stepping down in 2015. Fitch’s said that the state must address some of its budget challenges to hang on to its current rating, which is the lowest in the country. “In addition to action on pensions, maintenance of the rating will require timely action on a more permanent budget solution to the structural mismatch between spending and revenues in advance of the expiration of temporary tax increases.”
Tuesday, November 05, 2013
Veto session roundup
By Jamey Dunn
In addition to passing legislation legalizing same-sex marriage, Illinois lawmakers took up several other issues today.
Budget bill
The Illinois House voted to approve additional spending for the current fiscal year, but the legislation did not include funding for back pay owed to state workers.
House Bill 209 contains $49.6 million in spending, the bulk of which, $30 million, would be used to implement the state’s new concealed carry law. Most of the money in the bill comes from special funds. Only about $500,000 of general revenue funds would be spent under the measure.
Gov. Pat Quinn’s budget office has been pushing for the $112 million to pay workers since a judge ordered the state to make good on the raises he initially denied. Republican Comptroller Judy Baar Topinka also called upon lawmakers last week to approve the money for workers because the state is required to pay interest on the pay.
“They’re still negotiating that. I think we’re going to have to come back. Sooner or later, we’re going to have to address that ... but I guess the negotiations have not gone well to be able to do that. I think that we want to deal with the pension[s] and we want to deal with other things,” said Chicago Democratic Rep. Louis Arroyo. “The [legislative] leaders and the [appropriations committee] chairs are not ready to talk about that. [But] sooner or later, we’re going to have to pay for it, because if we’re paying interest on the money we’re incurring more debt. I don’t know how long we’re going to wait.” Arroyo, who is the chair of the public safety budget committee, said he thinks it is likely that lawmakers will be back in session in the near future to deal with other issues and that the back pay could possible be addressed then. “We’re coming back before the year is over,” he said.
Steve Brown, spokesman for House Speaker Michael Madigan, said that lawmakers could indeed be back in session soon if there is a deal reached on public pension changes. Legislative leaders worked through some ideas last week that the pension systems are now analyzing to determine potential savings. Brown said that process would likely take about 10 days. “The speaker and I think, [Senate] President [John] Cullerton and others have said, when that’s done, if there’s an agreement, they’ll reconvene the legislature to take action.” But Brown said Madigan does not intend for there to be a vote on back pay at that time. “I’m not aware of any of that having anything to do with additional spending,” he said. “I am sure there are people out there who think that. I think the governor thinks that, but I’m not sure that there’s much of the legislature that’s subscribers to that idea.”
Brown said he does not think many in the House are interested in approving more GRF spending. “I think the speakers’ view on this other issues is that the agencies were granted lump sums. It’s really up to them to manage that. I don’t think that position has changed. There appears to be some additional revenue. I think the general view of the House has been over the last several years is if there’s revenue that comes in that we don’t know about in May, that ought to go to paying old bills. That ought to be our top priority.”
Quinn is also seeking an additional $40 million to fund the Department of Corrections. That money was not included in the legislation.
The bill was approved with broad bipartisan support. However, several Republicans supporters of concealed carry complained that the money to set up a concealed carry permitting system was tied to other spending that would not have been able to pass on its own. The legislation still needs Senate approval to make it to Quinn’s desk.
Juvenile justice
A House committee approved a bill that would create an independent ombudsman to oversee the Department of Juvenile Justice. The department has entered into a legal consent decree that requires it to improve education, mental health treatment and safety for detainees. Experts who created recommendations for the department found that juvenile detention centers were not offering the education required by law and lacked adequate mental health staffing. Fifteen percent of youth in the state’s system reported, as part of a Justice Department survey, that they had been sexually assaulted by other inmates or staff. Under Senate Bill 2352, the ombudsman would be able to visit detention centers unannounced and meet confidentially with juveniles.
The department supports the legislation. The American Federation of State, County and Municipal Employees was neutral on the bill. However, Adrienne Alexander, policy and legislative specialist for AFSCME Council 31, said the union, which represents DoJJ employees, is concerned about where the department will get funding for the new position, given that it is not meeting key missions such as education. “We look forward to details on how exactly it can be done, how it can be funded and how it will be implemented.” Beth Compton, general counsel for the department, said the ombudsman could be a key component to improvements without being too costly. “The ombudsman will be a very important piece at a relatively modest investment.”
Gun sentencing
Rep. Michael Zalewski, a Chicago Democrat, said today that changes to his proposal to increase penalties for gun crimes have made the plan “narrowly tailored” and would bring down the cost of his proposal.
SB 1342 would require first-time offenders who commit an aggravated unlawful use of a weapon to serve 85 percent of a one-year sentence. Knowingly carrying a loaded gun in public without a Firearm Owners Identification Card can result in an aggravated unlawful use of a weapon charge. A felon or gang member would receive a four-year sentence. The proposal would also bar gun offenders from participating in some programs that can substantially shorten their sentences, such as a boot camp program for offenders.
Zalewski’s original proposal called for 3three years for a first-time offender and five years for felons and gang members. A House committee approved the bill, but Zalewski said he is still working to find the votes to pass it in the House. He faces opposition from the National Rifle Association over the required penalties for first-time offenders. “The sponsor has worked very hard to try to craft a bill, and we just haven’t been able to come to a meeting of the minds on this one issue,” said Todd Vandermyde, a lobbyist for the NRA. He said lawmakers need to consider recent court rulings that upheld gun owners’ rights to carry firearms in public. “Carrying a gun is no longer, per se, a criminal offense.”
Some Democrats are also opposed to the bill because they say there is no proof that mandatory sentencing would help curb gun violence over the long term. “The rest of the country is getting away from mandatory minimums,” said Northbrook Democratic Rep. Elaine Nekritz. “Mandatory minimums do nothing about recidivism.” The Illinois Department of Corrections opposed the bill because officials say the department could not afford the longer sentences. Bryan Gleckler, chief of staff for IDoC, said that the bill would increase the corrections population by almost 3,000 inmates in 10 years and cost the department $71.3 million annually. “We have a system that is stressed and have very, very limited resources to manage the existing population that we have within our custody,” he said. “There’s no capacity to take this additional population on.”
But the plan has support from Republicans who formerly served as prosecutors. Elmhurst Republican Rep. Dennis Reboletti helped Zalewski revise the proposal. “I think it’s a pretty thoughtful approach,” he said. Reboletti said is open to more negotiation. However, he said he thinks changes to sentences are needed to deter gun crimes and keep gang members from having a revolving door experience at IDoC only to return to the streets armed. “I don’t know what other alternatives there are.” House Minority Leader Jim Durkin, who also worked as a prosecutor before coming to the legislature, has said he supports enhancing sentences for gun crimes.
In addition to passing legislation legalizing same-sex marriage, Illinois lawmakers took up several other issues today.
Budget bill
The Illinois House voted to approve additional spending for the current fiscal year, but the legislation did not include funding for back pay owed to state workers.
House Bill 209 contains $49.6 million in spending, the bulk of which, $30 million, would be used to implement the state’s new concealed carry law. Most of the money in the bill comes from special funds. Only about $500,000 of general revenue funds would be spent under the measure.
Gov. Pat Quinn’s budget office has been pushing for the $112 million to pay workers since a judge ordered the state to make good on the raises he initially denied. Republican Comptroller Judy Baar Topinka also called upon lawmakers last week to approve the money for workers because the state is required to pay interest on the pay.
“They’re still negotiating that. I think we’re going to have to come back. Sooner or later, we’re going to have to address that ... but I guess the negotiations have not gone well to be able to do that. I think that we want to deal with the pension[s] and we want to deal with other things,” said Chicago Democratic Rep. Louis Arroyo. “The [legislative] leaders and the [appropriations committee] chairs are not ready to talk about that. [But] sooner or later, we’re going to have to pay for it, because if we’re paying interest on the money we’re incurring more debt. I don’t know how long we’re going to wait.” Arroyo, who is the chair of the public safety budget committee, said he thinks it is likely that lawmakers will be back in session in the near future to deal with other issues and that the back pay could possible be addressed then. “We’re coming back before the year is over,” he said.
Steve Brown, spokesman for House Speaker Michael Madigan, said that lawmakers could indeed be back in session soon if there is a deal reached on public pension changes. Legislative leaders worked through some ideas last week that the pension systems are now analyzing to determine potential savings. Brown said that process would likely take about 10 days. “The speaker and I think, [Senate] President [John] Cullerton and others have said, when that’s done, if there’s an agreement, they’ll reconvene the legislature to take action.” But Brown said Madigan does not intend for there to be a vote on back pay at that time. “I’m not aware of any of that having anything to do with additional spending,” he said. “I am sure there are people out there who think that. I think the governor thinks that, but I’m not sure that there’s much of the legislature that’s subscribers to that idea.”
Brown said he does not think many in the House are interested in approving more GRF spending. “I think the speakers’ view on this other issues is that the agencies were granted lump sums. It’s really up to them to manage that. I don’t think that position has changed. There appears to be some additional revenue. I think the general view of the House has been over the last several years is if there’s revenue that comes in that we don’t know about in May, that ought to go to paying old bills. That ought to be our top priority.”
Quinn is also seeking an additional $40 million to fund the Department of Corrections. That money was not included in the legislation.
The bill was approved with broad bipartisan support. However, several Republicans supporters of concealed carry complained that the money to set up a concealed carry permitting system was tied to other spending that would not have been able to pass on its own. The legislation still needs Senate approval to make it to Quinn’s desk.
Juvenile justice
A House committee approved a bill that would create an independent ombudsman to oversee the Department of Juvenile Justice. The department has entered into a legal consent decree that requires it to improve education, mental health treatment and safety for detainees. Experts who created recommendations for the department found that juvenile detention centers were not offering the education required by law and lacked adequate mental health staffing. Fifteen percent of youth in the state’s system reported, as part of a Justice Department survey, that they had been sexually assaulted by other inmates or staff. Under Senate Bill 2352, the ombudsman would be able to visit detention centers unannounced and meet confidentially with juveniles.
The department supports the legislation. The American Federation of State, County and Municipal Employees was neutral on the bill. However, Adrienne Alexander, policy and legislative specialist for AFSCME Council 31, said the union, which represents DoJJ employees, is concerned about where the department will get funding for the new position, given that it is not meeting key missions such as education. “We look forward to details on how exactly it can be done, how it can be funded and how it will be implemented.” Beth Compton, general counsel for the department, said the ombudsman could be a key component to improvements without being too costly. “The ombudsman will be a very important piece at a relatively modest investment.”
Gun sentencing
Rep. Michael Zalewski, a Chicago Democrat, said today that changes to his proposal to increase penalties for gun crimes have made the plan “narrowly tailored” and would bring down the cost of his proposal.
SB 1342 would require first-time offenders who commit an aggravated unlawful use of a weapon to serve 85 percent of a one-year sentence. Knowingly carrying a loaded gun in public without a Firearm Owners Identification Card can result in an aggravated unlawful use of a weapon charge. A felon or gang member would receive a four-year sentence. The proposal would also bar gun offenders from participating in some programs that can substantially shorten their sentences, such as a boot camp program for offenders.
Zalewski’s original proposal called for 3three years for a first-time offender and five years for felons and gang members. A House committee approved the bill, but Zalewski said he is still working to find the votes to pass it in the House. He faces opposition from the National Rifle Association over the required penalties for first-time offenders. “The sponsor has worked very hard to try to craft a bill, and we just haven’t been able to come to a meeting of the minds on this one issue,” said Todd Vandermyde, a lobbyist for the NRA. He said lawmakers need to consider recent court rulings that upheld gun owners’ rights to carry firearms in public. “Carrying a gun is no longer, per se, a criminal offense.”
Some Democrats are also opposed to the bill because they say there is no proof that mandatory sentencing would help curb gun violence over the long term. “The rest of the country is getting away from mandatory minimums,” said Northbrook Democratic Rep. Elaine Nekritz. “Mandatory minimums do nothing about recidivism.” The Illinois Department of Corrections opposed the bill because officials say the department could not afford the longer sentences. Bryan Gleckler, chief of staff for IDoC, said that the bill would increase the corrections population by almost 3,000 inmates in 10 years and cost the department $71.3 million annually. “We have a system that is stressed and have very, very limited resources to manage the existing population that we have within our custody,” he said. “There’s no capacity to take this additional population on.”
But the plan has support from Republicans who formerly served as prosecutors. Elmhurst Republican Rep. Dennis Reboletti helped Zalewski revise the proposal. “I think it’s a pretty thoughtful approach,” he said. Reboletti said is open to more negotiation. However, he said he thinks changes to sentences are needed to deter gun crimes and keep gang members from having a revolving door experience at IDoC only to return to the streets armed. “I don’t know what other alternatives there are.” House Minority Leader Jim Durkin, who also worked as a prosecutor before coming to the legislature, has said he supports enhancing sentences for gun crimes.
Thursday, October 17, 2013
State operations back to normal as federal shutdown ends
By Jamey Dunn
Illinois budget officials say operations returned to normal today after the federal government reopened.
According to Gov. Pat Quinn’s budget office, all laid off state workers are back on the job. Federal workers were also asked to report back to work today. And for now, programs that were potentially threatened by a loss of funding, such as Head Start, are in the clear. The federal measure will fund the U.S. government through January 15 and extend the so-called debt ceiling to February 7.
Only one member of the Illinois congressional delegation voted against legislation, approved last night, to extend the funding of the government, as well as the country’s ability to pay its bills. U.S. Rep. Randy Hultgren, a Winfield Republican, said he voted against the agreement because it would not help reduce the country’s deficit. “It’s ridiculous to pay lip service to addressing our debt every few months and then do nothing,” he said in a written statement about his vote. “Procrastinating on our debt endangers our economic well-being. If we cannot address this problem now, after what this country has endured — then when?”
However, enough Republicans backed off their demand that the Patient Protection and Affordable Care Act, otherwise known as Obamacare, be defunded or delayed to approve the extension an avoid a potential default. U.S. Rep. Rodney Davis, a Republican from Taylorville, who signed on to a letter to House Speaker John Boehner that urged a push to defund Obamacare, voted in favor of the bill that has, at least temporarily, ended the federal shutdown. “From the very beginning of this debate I’ve stated that while I remain opposed to Obamacare, a government shutdown is absolutely unacceptable. Since then, I’ve voted for multiple bipartisan bills to reopen parts of the federal government while hoping that cooler heads would prevail and Republicans and Democrats would come together and negotiate in good faith. Today is no reason to celebrate because Congress finally did what we were sent to Washington to do — govern,” he said in a prepared statement. “That is why I voted in support of the bipartisan agreement to reopen the government and remove the threat of default, which could have had disastrous effects on an already-fragile economy.”
As the clock begins ticking on the new deadlines, lawmakers are set to return to negotiations over the federal budget. “For the past 16 days, my neighbors and all Americans needlessly suffered from a government shutdown and fear of a U.S. default on our national debt. Small businesses in my district had SBA loans and contracts with the government delayed. Federal employees who honorably serve our country went without paychecks, and veterans had many of their programs suspended. Tragically, even death benefits for family members of our fallen military heroes were put on hold. The American people deserve better,” said U.S. Rep. Tammy Duckworth, a Democrat from Hoffman Estates. “It was absolutely essential that Congress vote to reopen our government and raise the debt ceiling, and I am relieved that we can move forward as a nation. Now, the real work of creating a budget that invests in our economy and reduces the national debt begins.”
Illinois budget officials say operations returned to normal today after the federal government reopened.
According to Gov. Pat Quinn’s budget office, all laid off state workers are back on the job. Federal workers were also asked to report back to work today. And for now, programs that were potentially threatened by a loss of funding, such as Head Start, are in the clear. The federal measure will fund the U.S. government through January 15 and extend the so-called debt ceiling to February 7.
Only one member of the Illinois congressional delegation voted against legislation, approved last night, to extend the funding of the government, as well as the country’s ability to pay its bills. U.S. Rep. Randy Hultgren, a Winfield Republican, said he voted against the agreement because it would not help reduce the country’s deficit. “It’s ridiculous to pay lip service to addressing our debt every few months and then do nothing,” he said in a written statement about his vote. “Procrastinating on our debt endangers our economic well-being. If we cannot address this problem now, after what this country has endured — then when?”
However, enough Republicans backed off their demand that the Patient Protection and Affordable Care Act, otherwise known as Obamacare, be defunded or delayed to approve the extension an avoid a potential default. U.S. Rep. Rodney Davis, a Republican from Taylorville, who signed on to a letter to House Speaker John Boehner that urged a push to defund Obamacare, voted in favor of the bill that has, at least temporarily, ended the federal shutdown. “From the very beginning of this debate I’ve stated that while I remain opposed to Obamacare, a government shutdown is absolutely unacceptable. Since then, I’ve voted for multiple bipartisan bills to reopen parts of the federal government while hoping that cooler heads would prevail and Republicans and Democrats would come together and negotiate in good faith. Today is no reason to celebrate because Congress finally did what we were sent to Washington to do — govern,” he said in a prepared statement. “That is why I voted in support of the bipartisan agreement to reopen the government and remove the threat of default, which could have had disastrous effects on an already-fragile economy.”
As the clock begins ticking on the new deadlines, lawmakers are set to return to negotiations over the federal budget. “For the past 16 days, my neighbors and all Americans needlessly suffered from a government shutdown and fear of a U.S. default on our national debt. Small businesses in my district had SBA loans and contracts with the government delayed. Federal employees who honorably serve our country went without paychecks, and veterans had many of their programs suspended. Tragically, even death benefits for family members of our fallen military heroes were put on hold. The American people deserve better,” said U.S. Rep. Tammy Duckworth, a Democrat from Hoffman Estates. “It was absolutely essential that Congress vote to reopen our government and raise the debt ceiling, and I am relieved that we can move forward as a nation. Now, the real work of creating a budget that invests in our economy and reduces the national debt begins.”
Tuesday, July 17, 2012
Study finds states struggling at recovery
By Jamey Dunn
A new study on struggling state budgets found that the recent recession exposed and exacerbated unsound practices occurring nationwide and left many states struggling to find stability.
The report released by the New York City-based State Budget Crisis Task Force focused on California, Illinois, New Jersey, New York, Texas and Virginia. According to the report, these states hold a third of the country’s population and account for almost 40 cents of every dollar spent by state and local governments. “The ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened,” Richard Ravitch, the former lieutenant governor of New York, and Paul Volcker, the former chairman of the Federal Reserve, wrote. Both are chairmen of the State Budget Crisis Task Force. “The conclusion of the task force is unambiguous. The existing trajectory of state spending, taxation and administrative practices cannot be sustained. The basic problem is not cyclical. It is structural. The time to act is now.”
States' spending has a significant effect on the economy as a whole. States spend a total $1.5 trillion annually. State and local governments cover 90 percent of education costs, and states spend an estimated $200 billion annually on health care for the poor each year. States are also important employers. They employ more than 19 million workers, which account for 15 percent of all workers in the nation. States employ six times as many people as the federal government.
But employee headcounts are shrinking as states face post-recession budget realities. According to the report, states are facing budget shortfalls that total an estimated $55 billion. States responded to the crisis by dipping into reserves, if available, raising taxes and cutting, especially staff. According to the report, Illinois lost 23,300 state and local government jobs from June 2009 to May 2012. New York saw comparable numbers. But most states in the study experienced more public jobs cuts than Illinois and New York. California saw state and local employment dip by 125,800 over the same period. Only New Jersey lost less than Illinois, at 21,600. The report said that states targeted personnel costs for larger cuts after the 2008 financial crisis more than they did in other recent economic downturns. “This is a fundamental shift in the way governments have responded to recessions and appears to signal a willingness to “unbuild” state government in a way that has not been done before,” the report said.
The report found that state budgets fared worse in the downturn than other areas of the economy and would likely take longer to bounce back. “The sharp deterioration in state finances as a result of the 2008 financial collapse and associated recession is well-known. State government tax revenues were hit much harder than the overall economy. Although real gross domestic product declined by 5.1 percent during the recession, the components of personal income typically taxed by state governments declined by 10 percent; and consumption of items typically subject to state sales taxes declined by 11 percent.”
As Congress seeks to reduce the federal deficit in wake of the recession, the authors of the study also try to predict the potential impact of cuts to federal funding, which they say would most likely hit grants that go to states. “Even if Congress and the president do not cut the federal budget drastically this year or next, significant cuts are almost certain over the longer term. We may assume that areas such as defense, Social Security, Medicare, and net interest will not be cut as deeply as other programs. If this is the case, federal grants to state and local governments will be a primary target of federal budget cuts.” The study says a 10 percent cut to such grants would mean a $60 billion reduction in funds going to states. The study says such a cut would be “equivalent to more than doubling the corporate income tax, cutting police and fire spending almost in half, or eliminating all spending on libraries, parks and recreation.” Under such a reduction, Illinois would lose $2.3 billion.
However, the study said that not all state budget problems can be blamed on the recession. Growing health care and retirement costs, coupled with budget gimmickry, had set many states, including Illinois, up for a fall. “The rapid growth in Medicaid spending has pushed aside other types of state spending. Medicaid recently surpassed K-12 education as the largest area of state spending when all funds, including federal funds, are considered; Medicaid appears likely to continue to claim a growing share of state resources,” the report said. All six states in the study have made efforts to slash Medicaid liabilities. Illinois is not the only state that has pushed off Medicaid bills from one fiscal year into the next. Texas intentionally underfunded its Medicaid program and now must make up a $4.8 billion shortfall by September 2013.
It will come as no surprise to Illinois residents that pension and retiree health care costs are also included in the reports analysis of budget challenges. According to the study, California, Illinois and New Jersey account for more than half of the total unfunded liability for pension costs nationwide.
All six states were guilty of using budget gimmicks or paying for ongoing costs with one-time-only revenues. California, New Jersey and New York joined Illinois in borrowing against tobacco settlement revenues, a budgeting trick called securitization. All six states have delayed payments to local governments, schools or vendors. All six have also used fund sweeps to balance their budgets. All the states but Texas have borrowed either to refinance other debt or cover annual costs, including pension payments.
The report makes a number of recommendations, including that states make budgets more transparent and create multi-year projections that are more than just window dressing. The study also suggests that states make their pension funds more transparent by reporting on investment risks. The authors say that states should create automatic funding mechanisms to ensure that pension payments are made, as well as automatically deferring some money each year into rainy day funds.
A new study on struggling state budgets found that the recent recession exposed and exacerbated unsound practices occurring nationwide and left many states struggling to find stability.
The report released by the New York City-based State Budget Crisis Task Force focused on California, Illinois, New Jersey, New York, Texas and Virginia. According to the report, these states hold a third of the country’s population and account for almost 40 cents of every dollar spent by state and local governments. “The ability of the states to meet their obligations to public employees, to creditors and most critically to the education and well-being of their citizens is threatened,” Richard Ravitch, the former lieutenant governor of New York, and Paul Volcker, the former chairman of the Federal Reserve, wrote. Both are chairmen of the State Budget Crisis Task Force. “The conclusion of the task force is unambiguous. The existing trajectory of state spending, taxation and administrative practices cannot be sustained. The basic problem is not cyclical. It is structural. The time to act is now.”
States' spending has a significant effect on the economy as a whole. States spend a total $1.5 trillion annually. State and local governments cover 90 percent of education costs, and states spend an estimated $200 billion annually on health care for the poor each year. States are also important employers. They employ more than 19 million workers, which account for 15 percent of all workers in the nation. States employ six times as many people as the federal government.
But employee headcounts are shrinking as states face post-recession budget realities. According to the report, states are facing budget shortfalls that total an estimated $55 billion. States responded to the crisis by dipping into reserves, if available, raising taxes and cutting, especially staff. According to the report, Illinois lost 23,300 state and local government jobs from June 2009 to May 2012. New York saw comparable numbers. But most states in the study experienced more public jobs cuts than Illinois and New York. California saw state and local employment dip by 125,800 over the same period. Only New Jersey lost less than Illinois, at 21,600. The report said that states targeted personnel costs for larger cuts after the 2008 financial crisis more than they did in other recent economic downturns. “This is a fundamental shift in the way governments have responded to recessions and appears to signal a willingness to “unbuild” state government in a way that has not been done before,” the report said.
The report found that state budgets fared worse in the downturn than other areas of the economy and would likely take longer to bounce back. “The sharp deterioration in state finances as a result of the 2008 financial collapse and associated recession is well-known. State government tax revenues were hit much harder than the overall economy. Although real gross domestic product declined by 5.1 percent during the recession, the components of personal income typically taxed by state governments declined by 10 percent; and consumption of items typically subject to state sales taxes declined by 11 percent.”
As Congress seeks to reduce the federal deficit in wake of the recession, the authors of the study also try to predict the potential impact of cuts to federal funding, which they say would most likely hit grants that go to states. “Even if Congress and the president do not cut the federal budget drastically this year or next, significant cuts are almost certain over the longer term. We may assume that areas such as defense, Social Security, Medicare, and net interest will not be cut as deeply as other programs. If this is the case, federal grants to state and local governments will be a primary target of federal budget cuts.” The study says a 10 percent cut to such grants would mean a $60 billion reduction in funds going to states. The study says such a cut would be “equivalent to more than doubling the corporate income tax, cutting police and fire spending almost in half, or eliminating all spending on libraries, parks and recreation.” Under such a reduction, Illinois would lose $2.3 billion.
However, the study said that not all state budget problems can be blamed on the recession. Growing health care and retirement costs, coupled with budget gimmickry, had set many states, including Illinois, up for a fall. “The rapid growth in Medicaid spending has pushed aside other types of state spending. Medicaid recently surpassed K-12 education as the largest area of state spending when all funds, including federal funds, are considered; Medicaid appears likely to continue to claim a growing share of state resources,” the report said. All six states in the study have made efforts to slash Medicaid liabilities. Illinois is not the only state that has pushed off Medicaid bills from one fiscal year into the next. Texas intentionally underfunded its Medicaid program and now must make up a $4.8 billion shortfall by September 2013.
It will come as no surprise to Illinois residents that pension and retiree health care costs are also included in the reports analysis of budget challenges. According to the study, California, Illinois and New Jersey account for more than half of the total unfunded liability for pension costs nationwide.
All six states were guilty of using budget gimmicks or paying for ongoing costs with one-time-only revenues. California, New Jersey and New York joined Illinois in borrowing against tobacco settlement revenues, a budgeting trick called securitization. All six states have delayed payments to local governments, schools or vendors. All six have also used fund sweeps to balance their budgets. All the states but Texas have borrowed either to refinance other debt or cover annual costs, including pension payments.
The report makes a number of recommendations, including that states make budgets more transparent and create multi-year projections that are more than just window dressing. The study also suggests that states make their pension funds more transparent by reporting on investment risks. The authors say that states should create automatic funding mechanisms to ensure that pension payments are made, as well as automatically deferring some money each year into rainy day funds.
Wednesday, April 18, 2012
House approves higher threshold for pension increases but not tax hikes
By Jamey Dunn
The Illinois House approved a measure today that would make it more difficult to increase pension benefits, but Republicans argue that the same threshold should be set for tax increases.
There was no opposition in the House to a proposed constitutional amendment that would require that any increase in pension benefits for public workers to receive a three-fifths majority vote to pass. Currently, such increases require a simple majority. “There’s a lot of tough medicine in this resolution. I think the tough medicine is needed,” said House Speaker Michael Madigan, who sponsored HJRCA 49.Under the measure, an increase to salary or wages would not constitute a pension benefit increase, unless the raise was excessive. Madigan said that lawmakers could set the parameters for “excessive” pay increases.
The amendment would up the required support to override a veto of a bill containing pension benefits to two thirds of each chamber. Currently, only a three-fifths majority is required to override a veto. It also calls for increased benefits for municipal public workers to be approved by a three-fifths majority of a local board or council.
Union officials say that the state’s billions in unfunded pension liability was caused by lawmakers and governors opting to skip annual pension payments, not by increased benefits. “This change to the Constitution would not address the true crisis threatening Illinois public retirement systems, which is the habitual failure of politicians to adequately fund the modest pensions earned by public employees. We continue to believe that this funding crisis can only be solved by all parties working together in good faith, and our union remains committed to doing so,” said Anders Lindall, spokesman for the American Federation of State County and Municipal Employees Council 31.
A recent report from the Commission on Government Forecasting and Accountability found that the bulk of the shortfall is a result of underfunding.
Lindall also argued that the reduced pension benefits that went into effect last year do not meet federal requirements for employees, such as teachers, who will not receive Social Security benefits for the time they work for the state. “The lower pension tier forced on newly hired public employees must be fixed to avoid severe federal penalties. It is unwise to make such needed amendments more difficult to achieve,” Lindall said.
However, Madigan said that support for sweetening the benefits of those hired under the new pension benefits system is part of his motivation for supporting the amendment. “I’ve already been in conversations where people are saying that the tier two — that was created a few years ago and is in place for those hired to public jobs after Jan 1 of 2011 — is not sufficient. That it has to be improved. That we have to make it better,” Madigan said. “So that’s another reason to support this resolution and raise that vote count because those that even in the current crisis think that we ought to be improving pensions are here at the Capitol building already laying the seeds for what will be their efforts very shortly to again improve pension benefits.” Madigan said that the amendment is not meant to put a stop to benefit increases, but it would make it more difficult to pass them. “If you are an individual here, or if you are a member of a group in the legislature who wishes to work against these bills, this will advantage your position. … You’ll have a better chance.”
Rep. Darlene Senger, a Naperville Republican, said that the measure is “a step in the right direction” but does not solve the state’s pension problems. “I do want everyone to know that when you see this on the ballot in November, there’s a lot more work that has to be done before then in regards to reforming pensions,” she said. “This does not change anything in regards to the debt for the unfunded liabilities … and it does nothing currently to the crisis we have in regards to our state budget with trying to fund pensions and Medicaid.”
Springfield Republican Rep. Raymond Poe said that the amendment should also protect against lawmakers voting to skip pension payments by setting the threshold to skip a payment at a three-fifths majority. “We also need a safeguard in there that you can’t short those payments in the future,” Poe said. The measure contains no such provision. The issue of guaranteeing future payments into the pension system will likely play into the ongoing negotiations over other pension reforms that may include reductions in benefits for workers hired before lower benefits for new employees went into effect last year.
After Madigan’s amendment was approved, Republicans moved to have two constitutional amendments that are languishing in the rules committee called to the floor for a vote. The amendments would require the approval of a three-fifths majority to increase taxes in the state. “Let me commend Speaker [Madigan] for realizing that some votes in this chamber carry heavier consequences and deserve a little bit of extra scrutiny. He is right that decisions that have great impacts on the fiscal health of Illinois residents and the state as a whole should have to meet a higher standard and require a greater threshold,” said Arlington Heights Rep. David Harris, who is listed as a sponsor on both amendments. Harris argued that such a higher threshold should also apply to tax votes. “This is nothing significant or new. We already require a higher voting standard for borrowing, for laws that would preempt home rule and to overturn the governor’s veto. The next logical steep would be to require the very same threshold for bills that would make Illinois residents have to pay more taxes.” The Republicans’ efforts were blocked and the measures did not come up for a vote.
If the Senate approves HJRCA 49, it would appear on the ballot in the November general election. To be included in the state’s Constitution, it would require the support of either three-fifths of those who choose to vote on the question or the majority of those voting in the election .
The Illinois House approved a measure today that would make it more difficult to increase pension benefits, but Republicans argue that the same threshold should be set for tax increases.
There was no opposition in the House to a proposed constitutional amendment that would require that any increase in pension benefits for public workers to receive a three-fifths majority vote to pass. Currently, such increases require a simple majority. “There’s a lot of tough medicine in this resolution. I think the tough medicine is needed,” said House Speaker Michael Madigan, who sponsored HJRCA 49.Under the measure, an increase to salary or wages would not constitute a pension benefit increase, unless the raise was excessive. Madigan said that lawmakers could set the parameters for “excessive” pay increases.
The amendment would up the required support to override a veto of a bill containing pension benefits to two thirds of each chamber. Currently, only a three-fifths majority is required to override a veto. It also calls for increased benefits for municipal public workers to be approved by a three-fifths majority of a local board or council.
Union officials say that the state’s billions in unfunded pension liability was caused by lawmakers and governors opting to skip annual pension payments, not by increased benefits. “This change to the Constitution would not address the true crisis threatening Illinois public retirement systems, which is the habitual failure of politicians to adequately fund the modest pensions earned by public employees. We continue to believe that this funding crisis can only be solved by all parties working together in good faith, and our union remains committed to doing so,” said Anders Lindall, spokesman for the American Federation of State County and Municipal Employees Council 31.
A recent report from the Commission on Government Forecasting and Accountability found that the bulk of the shortfall is a result of underfunding.
Lindall also argued that the reduced pension benefits that went into effect last year do not meet federal requirements for employees, such as teachers, who will not receive Social Security benefits for the time they work for the state. “The lower pension tier forced on newly hired public employees must be fixed to avoid severe federal penalties. It is unwise to make such needed amendments more difficult to achieve,” Lindall said.
However, Madigan said that support for sweetening the benefits of those hired under the new pension benefits system is part of his motivation for supporting the amendment. “I’ve already been in conversations where people are saying that the tier two — that was created a few years ago and is in place for those hired to public jobs after Jan 1 of 2011 — is not sufficient. That it has to be improved. That we have to make it better,” Madigan said. “So that’s another reason to support this resolution and raise that vote count because those that even in the current crisis think that we ought to be improving pensions are here at the Capitol building already laying the seeds for what will be their efforts very shortly to again improve pension benefits.” Madigan said that the amendment is not meant to put a stop to benefit increases, but it would make it more difficult to pass them. “If you are an individual here, or if you are a member of a group in the legislature who wishes to work against these bills, this will advantage your position. … You’ll have a better chance.”
Rep. Darlene Senger, a Naperville Republican, said that the measure is “a step in the right direction” but does not solve the state’s pension problems. “I do want everyone to know that when you see this on the ballot in November, there’s a lot more work that has to be done before then in regards to reforming pensions,” she said. “This does not change anything in regards to the debt for the unfunded liabilities … and it does nothing currently to the crisis we have in regards to our state budget with trying to fund pensions and Medicaid.”
Springfield Republican Rep. Raymond Poe said that the amendment should also protect against lawmakers voting to skip pension payments by setting the threshold to skip a payment at a three-fifths majority. “We also need a safeguard in there that you can’t short those payments in the future,” Poe said. The measure contains no such provision. The issue of guaranteeing future payments into the pension system will likely play into the ongoing negotiations over other pension reforms that may include reductions in benefits for workers hired before lower benefits for new employees went into effect last year.
After Madigan’s amendment was approved, Republicans moved to have two constitutional amendments that are languishing in the rules committee called to the floor for a vote. The amendments would require the approval of a three-fifths majority to increase taxes in the state. “Let me commend Speaker [Madigan] for realizing that some votes in this chamber carry heavier consequences and deserve a little bit of extra scrutiny. He is right that decisions that have great impacts on the fiscal health of Illinois residents and the state as a whole should have to meet a higher standard and require a greater threshold,” said Arlington Heights Rep. David Harris, who is listed as a sponsor on both amendments. Harris argued that such a higher threshold should also apply to tax votes. “This is nothing significant or new. We already require a higher voting standard for borrowing, for laws that would preempt home rule and to overturn the governor’s veto. The next logical steep would be to require the very same threshold for bills that would make Illinois residents have to pay more taxes.” The Republicans’ efforts were blocked and the measures did not come up for a vote.
If the Senate approves HJRCA 49, it would appear on the ballot in the November general election. To be included in the state’s Constitution, it would require the support of either three-fifths of those who choose to vote on the question or the majority of those voting in the election .
Wednesday, February 01, 2012
Quinn proposes new spending in upbeat State of the State address
By Jamey Dunn
Gov. Pat Quinn focused on the positive as he gave his State of the State address today.
He highlighted recently passed legislation such as education reform and the Illinois Dream Act.
He touched on some of his favorite stories of Illinois success, such as job growth at a Chicago Ford plant and the state’s large volume of agriculture exports.
“We have invested in our state, making it a better place to do business. And we have invested in the people of Illinois, helping our working families and improving education. The results are in from major export growth and the largest public works construction program in state history to solid gains in education. We’re back on course. Illinois is moving forward,” Quinn said in his speech.
“I felt like I was listening to the story of the Emperor’s New Clothes, and he was walking down the street saying, ‘Boy, my clothes are beautiful,’” said Senate Minority Leader Christine Radogno. “And the rest of the state — the citizens — are saying, ‘He’s naked!’ It’s like he totally doesn’t get it that the focus here needs to be on the problem we all agree is out there.”
But Senate President John Cullerton said Tuesday that the state has made progress in the last few years, and Quinn should celebrate it in his speech. “I commend the governor for highlighting the many accomplishments that we have made over the last few years,” Cullerton said in a written statement released today.
“I think he did the right thing by stating the real positives that we have here in Illinois, and we have many positives,” said Comptroller Judy Baar Topinka. “But we also have a big tab right now that we have to pay.”
Quinn pitched several initiatives, but the response from lawmakers and other Illinois officials was “show me the money” that will pay for new programs.
“I’m sure they’re all excellent proposals. … It all boils down to revenue, money, balanced budget. Where is that going to come from?” said Sen. John Sullivan, a Rushville Democrat. “We want to work with the governor. If he has some ideas on how we can come up with that revenue, we’re willing to take a look at it, but you know it’s just going to be extremely difficult in this situation.”
Palatine Republican Sen. Matt Murphy said: “He spent a significant amount of time in his speech talking about new spending. It’s just detached from reality.”
Quinn proposed a series of tax cuts that he said would help to spur economic growth and create new jobs. He said he wants to make "major investments" in classroom resources, such as new technology, early education and the Monetary Assistance Program. Both preschool funding and MAP grants have been cut in recent years. He said he wants to make investments in the state’s water systems, such as new water mains and sewage treatment plants. Quinn solidified the goals of doubling Illinois exports by 2014 and having 60 percent of residents holding a certificate of post high school education by 2025.
Quinn’s budget office estimates that the tax cut plan would cost about $300 million. The budget office did not supply cost estimates for other parts of Quinn’s plan. “Today, our focus is on the vision for our state. …The governor looks forward to working with legislators on these investments, as well as investments in college scholarships, early childhood education, affordable housing, clean water for communities, and 21st century schools that will continue moving Illinois forward,” Kelly Kraft, Quinn’s budget spokesperson, said in a written statement.
Republicans gave a figure of $500 million as a ballpark cost of all the proposals Quinn made. They complained that Quinn did not address the state’s growing backlog of unpaid bills, which a recent report says would reach $35 billion in five years if no action were taken. “He didn’t refer to the backlog at all, really. It’s there. I see it everyday,” Topinka said. “You certainly don’t solve this problem by creating new programs, even though they do generate a lot of feel-goods. … If I had a calculator in my hand, it would have blown up. There’s no way to pay for all these things.”
Quinn has proposed borrowing to pay down the backlog, and Cullerton said Tuesday that he would support a bipartisan borrowing plan. But Murphy said, “The borrowing is dead on arrival.”
Warren Ribley, director of the Department of Economic Opportunity said Quinn’s proposals would help spur job growth. “I think the goal of having 60 percent of our population with an accredited degree by 2025 will certainly provide a strong foundation for growing jobs and moving the economy forward. … We have to continue to invest in infrastructure. I work with business every single day, and the two things that they tell me that we need are strong investments in your infrastructure and strong investments in your education. So it’s very consistent with what I hear.”
Rilbey said that today’s speech was an “opportunity to lay out a vision,” and Quinn would address how he proposes to pay for his proposals when he presents his budget later this month. Cullerton said he was willing to wait for the budget address to get the details on spending. “As he advances new initiatives to create jobs and improve the economy, I look forward to hearing how we can fund these important priorities within a balanced budget,” Cullerton said in a prepared statement.
However, Republicans were less patient. “He’s had three years,” House Minority Leader Tom Cross said. “And these issues just get worse and worse and worse.”
Lawmakers on both sides of the aisle said they were pleased that Quinn called for Medicaid and pension reform this year. “Fixing the pension problem will not be easy, but we have no choice,” Quinn said. “I was encouraged to hear him about pension reform and Medicaid reform. I hope he will show the courage he talked about in tackling those issues in the coming weeks,” Murphy said. “They are the two 800-pound gorillas that are sitting in two different corners of the room that we have to address,” said Sullivan. “It’s not going to be an easy task. Is the will here to do it? I don’t know.”
Gov. Pat Quinn focused on the positive as he gave his State of the State address today.
He highlighted recently passed legislation such as education reform and the Illinois Dream Act.
He touched on some of his favorite stories of Illinois success, such as job growth at a Chicago Ford plant and the state’s large volume of agriculture exports.
“We have invested in our state, making it a better place to do business. And we have invested in the people of Illinois, helping our working families and improving education. The results are in from major export growth and the largest public works construction program in state history to solid gains in education. We’re back on course. Illinois is moving forward,” Quinn said in his speech.
“I felt like I was listening to the story of the Emperor’s New Clothes, and he was walking down the street saying, ‘Boy, my clothes are beautiful,’” said Senate Minority Leader Christine Radogno. “And the rest of the state — the citizens — are saying, ‘He’s naked!’ It’s like he totally doesn’t get it that the focus here needs to be on the problem we all agree is out there.”
But Senate President John Cullerton said Tuesday that the state has made progress in the last few years, and Quinn should celebrate it in his speech. “I commend the governor for highlighting the many accomplishments that we have made over the last few years,” Cullerton said in a written statement released today.
“I think he did the right thing by stating the real positives that we have here in Illinois, and we have many positives,” said Comptroller Judy Baar Topinka. “But we also have a big tab right now that we have to pay.”
Quinn pitched several initiatives, but the response from lawmakers and other Illinois officials was “show me the money” that will pay for new programs.
“I’m sure they’re all excellent proposals. … It all boils down to revenue, money, balanced budget. Where is that going to come from?” said Sen. John Sullivan, a Rushville Democrat. “We want to work with the governor. If he has some ideas on how we can come up with that revenue, we’re willing to take a look at it, but you know it’s just going to be extremely difficult in this situation.”
Palatine Republican Sen. Matt Murphy said: “He spent a significant amount of time in his speech talking about new spending. It’s just detached from reality.”
Quinn proposed a series of tax cuts that he said would help to spur economic growth and create new jobs. He said he wants to make "major investments" in classroom resources, such as new technology, early education and the Monetary Assistance Program. Both preschool funding and MAP grants have been cut in recent years. He said he wants to make investments in the state’s water systems, such as new water mains and sewage treatment plants. Quinn solidified the goals of doubling Illinois exports by 2014 and having 60 percent of residents holding a certificate of post high school education by 2025.
Quinn’s budget office estimates that the tax cut plan would cost about $300 million. The budget office did not supply cost estimates for other parts of Quinn’s plan. “Today, our focus is on the vision for our state. …The governor looks forward to working with legislators on these investments, as well as investments in college scholarships, early childhood education, affordable housing, clean water for communities, and 21st century schools that will continue moving Illinois forward,” Kelly Kraft, Quinn’s budget spokesperson, said in a written statement.
Republicans gave a figure of $500 million as a ballpark cost of all the proposals Quinn made. They complained that Quinn did not address the state’s growing backlog of unpaid bills, which a recent report says would reach $35 billion in five years if no action were taken. “He didn’t refer to the backlog at all, really. It’s there. I see it everyday,” Topinka said. “You certainly don’t solve this problem by creating new programs, even though they do generate a lot of feel-goods. … If I had a calculator in my hand, it would have blown up. There’s no way to pay for all these things.”
Quinn has proposed borrowing to pay down the backlog, and Cullerton said Tuesday that he would support a bipartisan borrowing plan. But Murphy said, “The borrowing is dead on arrival.”
Warren Ribley, director of the Department of Economic Opportunity said Quinn’s proposals would help spur job growth. “I think the goal of having 60 percent of our population with an accredited degree by 2025 will certainly provide a strong foundation for growing jobs and moving the economy forward. … We have to continue to invest in infrastructure. I work with business every single day, and the two things that they tell me that we need are strong investments in your infrastructure and strong investments in your education. So it’s very consistent with what I hear.”
Rilbey said that today’s speech was an “opportunity to lay out a vision,” and Quinn would address how he proposes to pay for his proposals when he presents his budget later this month. Cullerton said he was willing to wait for the budget address to get the details on spending. “As he advances new initiatives to create jobs and improve the economy, I look forward to hearing how we can fund these important priorities within a balanced budget,” Cullerton said in a prepared statement.
However, Republicans were less patient. “He’s had three years,” House Minority Leader Tom Cross said. “And these issues just get worse and worse and worse.”
Lawmakers on both sides of the aisle said they were pleased that Quinn called for Medicaid and pension reform this year. “Fixing the pension problem will not be easy, but we have no choice,” Quinn said. “I was encouraged to hear him about pension reform and Medicaid reform. I hope he will show the courage he talked about in tackling those issues in the coming weeks,” Murphy said. “They are the two 800-pound gorillas that are sitting in two different corners of the room that we have to address,” said Sullivan. “It’s not going to be an easy task. Is the will here to do it? I don’t know.”
Tuesday, January 31, 2012
Lawmakers anticipate Quinn's State of the State address
By Jamey Dunn
With Gov Pat Quinn due to make his State of the State address Wednesday, Illinois legislators hope his speech will touch on a variety of issues.
Quinn is scheduled to give his speech before a joint session of the House and Senate at noon on Wednesday, and he says he plans to focus on economic development.
“The best way to be strong is to build and grow your economy. There’s no other way to have a better budget than to make sure that we have a dynamic economy that’s creating jobs for middle class hardworking people in Illinois. And that’s what I’m going to talk about tomorrow,” Quinn said today at a Chicago news conference. “Economic growth and jobs are our number one priority now, today, tomorrow and forever in Illinois. As long as I am governor, we’re always going to stress economic growth and jobs.”
Senate President John Cullerton said that while the state still faces problems, he is hoping for a speech that is not all doom and gloom. “I’d like to hear the governor talk about what great progress we’ve made in Illinois in the last year,” Cullerton said. “We really have a great state. We have had to face some really serious problems, like most states in the nation. We’ve passed a lot of reforms to our budget process. We’ve passed caps on our spending. Last year we passed a balanced budget. … We still have some real challenges to face. But the state is really a very positive business-climate state.”
Rep. Roger Eddy, a Hutsonville Republican, agrees with Quinn that economic development is a top priority. “I hope he relays the fact that Illinois needs to make this state’s climate attractive to business. The way out of the problem we face fiscally is to make Illinois attractive to businesses.”
What Eddy says he does not want to hear from Quinn is talk about “spending more money.”
“My hope would be that he continues to realize the difficult position we’re in, and he has some plans.” Eddy said he think Quinn needs to acknowledge the issues brought up in a recent report from the Civic Federation that says the state’s backlog of unpaid bills will total $35 billion within five years if not action is taken.
Cullerton said he would support a plan to borrow to pay down the state’s overdue bills, but only if it had bipartisan support. “We should finance those payments over time. Pay people off right away, not borrow money from our vendors but from our lenders,” Cullerton said. “That would help the economy. That would make people who do business with the state feel more comfortable in doing so.” Quinn has favored such a proposal in the past.
The Civic Federation report also highlights growing Medicaid and pension costs. Both are issues Quinn said he plans to talk about Wednesday. “There’s some very interesting ideas in there,” he said of the report, but he said the document “was a little light” on proposals for economic development.
While he plans to talk about some aspects of the budget, Quinn said: “Tomorrow is not the budget address. That’s three weeks from tomorrow.” He is scheduled to present his budget onMarch 22 Correction: February 22: “It’ll be, I think, a very provocative document. It will challenge the members of the General Assembly to show political courage to do important things that have to be done.”
Quinn told reporters he will propose some sort of tax relief in his address, but he would not give details on what the relief would be or what people or groups it might apply to. “The answer is yes, but you’ll have to wait till tomorrow.”
Eddy said that while such speeches are the time to lay out the broad strokes of policy changes, he hopes that Quinn does not make any drastic announcements that he later fails to follow up on. Eddy pointed to Quinn’s proposed elimination of the Regional Offices of Education in last year’s budget address. Quinn later used his veto pen to remove the funding for regional superintendents, and they went without pay for months. Quinn did not designate an entity to take up the duties of the Regional Offices of Education. The legislature, somewhat begrudgingly, passed a bill to pay the superintendents. Many lawmakers, including Eddy, were frustrated at cleaning up what they saw as a mess that Quinn created.
“Maybe the last year and his recognition of the fact that just saying it doesn’t make it so will be a good lesson for him,” said Eddy, who is a school superintendent in Hutsonville.
Rep. Lou Lang, a Democrat from Skokie, said he hopes Quinn will talk about the budget and the backlog of unpaid bills. “I think the governor will acknowledge that we have some serious budgetary issues and try to indicate that we’ll continue our program from last year of cutting where we can, balancing the budget, trying to find revenue without taxation and trying to pay of our bills. I think that’s our first and foremost responsibility, and I’m expecting to hear that tomorrow.”
Lang added: “We have to find revenue. I don’t think the governor will discuss, for instance, the gaming bill, but the negotiations continue on that.” Lang sponsored a bill to increase the number of casinos in the state and allow slot machines at horse racing tracks. The bill passed both legislative chambers, but Quinn publicly opposed it. Lawmakers never sent the legislation to Quinn, who said he planned to rewrite it if it landed on his desk. Interested parties have gone back to the drawing board to try and negotiate a new bill that lawmakers would approve and Quinn would sign.
Lang said that he hopes Quinn indicates a desire to work more actively with the legislature on crafting the budget. The budget process was largely driven by the House last year. “Moving forward together, we can’t fix all the problems we have in one year, but we can continue to make the progress that the people of our state deserve.”
For a look back at Quinn's first year as elected governor, see Illinois Issues January 2012.
With Gov Pat Quinn due to make his State of the State address Wednesday, Illinois legislators hope his speech will touch on a variety of issues.
Quinn is scheduled to give his speech before a joint session of the House and Senate at noon on Wednesday, and he says he plans to focus on economic development.
“The best way to be strong is to build and grow your economy. There’s no other way to have a better budget than to make sure that we have a dynamic economy that’s creating jobs for middle class hardworking people in Illinois. And that’s what I’m going to talk about tomorrow,” Quinn said today at a Chicago news conference. “Economic growth and jobs are our number one priority now, today, tomorrow and forever in Illinois. As long as I am governor, we’re always going to stress economic growth and jobs.”
Senate President John Cullerton said that while the state still faces problems, he is hoping for a speech that is not all doom and gloom. “I’d like to hear the governor talk about what great progress we’ve made in Illinois in the last year,” Cullerton said. “We really have a great state. We have had to face some really serious problems, like most states in the nation. We’ve passed a lot of reforms to our budget process. We’ve passed caps on our spending. Last year we passed a balanced budget. … We still have some real challenges to face. But the state is really a very positive business-climate state.”
Rep. Roger Eddy, a Hutsonville Republican, agrees with Quinn that economic development is a top priority. “I hope he relays the fact that Illinois needs to make this state’s climate attractive to business. The way out of the problem we face fiscally is to make Illinois attractive to businesses.”
What Eddy says he does not want to hear from Quinn is talk about “spending more money.”
“My hope would be that he continues to realize the difficult position we’re in, and he has some plans.” Eddy said he think Quinn needs to acknowledge the issues brought up in a recent report from the Civic Federation that says the state’s backlog of unpaid bills will total $35 billion within five years if not action is taken.
Cullerton said he would support a plan to borrow to pay down the state’s overdue bills, but only if it had bipartisan support. “We should finance those payments over time. Pay people off right away, not borrow money from our vendors but from our lenders,” Cullerton said. “That would help the economy. That would make people who do business with the state feel more comfortable in doing so.” Quinn has favored such a proposal in the past.
The Civic Federation report also highlights growing Medicaid and pension costs. Both are issues Quinn said he plans to talk about Wednesday. “There’s some very interesting ideas in there,” he said of the report, but he said the document “was a little light” on proposals for economic development.
While he plans to talk about some aspects of the budget, Quinn said: “Tomorrow is not the budget address. That’s three weeks from tomorrow.” He is scheduled to present his budget on
Quinn told reporters he will propose some sort of tax relief in his address, but he would not give details on what the relief would be or what people or groups it might apply to. “The answer is yes, but you’ll have to wait till tomorrow.”
Eddy said that while such speeches are the time to lay out the broad strokes of policy changes, he hopes that Quinn does not make any drastic announcements that he later fails to follow up on. Eddy pointed to Quinn’s proposed elimination of the Regional Offices of Education in last year’s budget address. Quinn later used his veto pen to remove the funding for regional superintendents, and they went without pay for months. Quinn did not designate an entity to take up the duties of the Regional Offices of Education. The legislature, somewhat begrudgingly, passed a bill to pay the superintendents. Many lawmakers, including Eddy, were frustrated at cleaning up what they saw as a mess that Quinn created.
“Maybe the last year and his recognition of the fact that just saying it doesn’t make it so will be a good lesson for him,” said Eddy, who is a school superintendent in Hutsonville.
Rep. Lou Lang, a Democrat from Skokie, said he hopes Quinn will talk about the budget and the backlog of unpaid bills. “I think the governor will acknowledge that we have some serious budgetary issues and try to indicate that we’ll continue our program from last year of cutting where we can, balancing the budget, trying to find revenue without taxation and trying to pay of our bills. I think that’s our first and foremost responsibility, and I’m expecting to hear that tomorrow.”
Lang added: “We have to find revenue. I don’t think the governor will discuss, for instance, the gaming bill, but the negotiations continue on that.” Lang sponsored a bill to increase the number of casinos in the state and allow slot machines at horse racing tracks. The bill passed both legislative chambers, but Quinn publicly opposed it. Lawmakers never sent the legislation to Quinn, who said he planned to rewrite it if it landed on his desk. Interested parties have gone back to the drawing board to try and negotiate a new bill that lawmakers would approve and Quinn would sign.
Lang said that he hopes Quinn indicates a desire to work more actively with the legislature on crafting the budget. The budget process was largely driven by the House last year. “Moving forward together, we can’t fix all the problems we have in one year, but we can continue to make the progress that the people of our state deserve.”
For a look back at Quinn's first year as elected governor, see Illinois Issues January 2012.
Wednesday, January 25, 2012
Part 3: A look at pension reform across the country
By Jamey Dunn
All four legislative leaders and Gov. Pat Quinn have said that pension reform is a priority in the upcoming legislative session, but their opinions differ on what would be best for the state and legal under the Illinois Constitution. Recent reforms in other states could provide models as lawmakers move forward. This is the final installment in a three-part series that looks at different aspects of reform in other states.
While labor issues in some states have turned into ugly fights that involved sit-ins and heated rhetoric, one state managed to work out pension changes through negotiations with its unions.
In Vermont, state officials sat down with labor leaders and worked out a deal that will save the state about $15 million a year, which was about 10 percent of the state’s budget deficit at the time the deal was struck. Employees will contribute more of their pay toward their retirement costs. It varies for different workers, but it will mean about 1 percent more of their salaries would go to their pensions. Workers will have to wait longer to retire, but will see a bump in benefits. The deal also includes a two-year 3 percent pay cut for state employees, a first in Vermont.
Employees in many states have had to pay more for their retirement benefits. In 2010, 11 states increased the amount employees must contribute to their retirement. In 2011, it happened 16 more times, although some of the same states that had raised contribution levels the previous year made the move again. “If you were to look across the country in cases where required pension contributions has been raised by employees you would find a range for different reasons,” said Keith Brainard, research director for National Association of State Retirement Administrators.
He said, “It’s more the absence of something — the absence of a constitutional provision, the lack of a statute” that allows states to increase contributions. According the National Conference of State Legislatures, 12 of the 2011 increases applied to at least some current employees. However, David Draine, senior researcher for Pew Center on the States, said: “We’ve seen more states considering — though not necessarily going for it — models where employees can keep their current benefits but have to pay more for them.”
That is what House Minority Leader Tom Cross said needs to happen in Illinois. Under Cross’ proposal, Senate Bill 17, workers who want to stay in the current benefit system would have to pay more. “You’ve got to truly pay for the cost of your benefits,” Cross said at a recent news conference.
What sets Vermont apart is that state workers — not legislators — approved the increased contributions through their unions.
“I think what happened in Vermont is that the governor and others sat down with labor and said, ‘We’ve got this problem. There’s only so much money to go around, and something’s got to give,'” Brainard said. The state is facing a deficit, a pension funding shortfall and, according to Vermont Public Radio, 25 percent of Vermont state workers will be eligible to retire by 2015. Other key factors in the negotiations may be the fact that Vermont is a small state and has a tradition of public civic engagement.
Brainard said Vermont is an example where defined benefits plans can continue to be workable and states do not have to switch to 401(k)-type defined contribution plans to tackle their pension problems.
Senate President John Cullerton said he would like to see Illinois negotiate a deal with its unions. “We can affect current employees … with laws that have a contractual basis. If there’s a reduction in benefit, there has to be a corresponding consideration, and there has to be acceptance," Cullerton said at a recent news conference.
Cullerton believes that any changes imposed by the state to benefits for current employees would be unconstitutional. Cullerton said Cross’ bill is unconstitutional and lacks the support to pass. “It hasn’t even been called, so apparently they don’t have enough votes for it.” He said that pension reform is also a priority of his, but that it should be achieved through negotiations with unions. “Politically, it would be real, for some people, just easy I guess to pass a bill, claim you did something, have it [blocked by the courts], spend millions of dollars in legal fees and then two years later find out it is unconstitutional.”
That is what former Vermont Treasurer Jeb Spaulding, who worked on the agreement in his state, wanted to avoid. “It would have been a Pyrrhic victory if we forced through a plan that was enjoined or overturned and we didn’t have any savings at all,” Spaulding told Stateline.
However, Brainard said states such as Illinois might have little to offer unions besides the avoidance of negative outcomes. “I think Illinois is almost in a class by itself in terms of its chronic neglect of its pension plan.” He said. “The best they might have to offer in a lot of cases is that they would forestall attrition and layoffs.”
Illinois union officials say they want to be at the table for any talk of pension changes, but they say that workers should not have to pay for the underfunding of the pension system after lawmakers and governors skipped required contributions year after year. The only way to solve the pension funding problem is for the unions that represent public employees — whose retirement security is dependent on the health of the pension funds and whose deferred compensation makes up 100 percent of the funds’ assets — to be full partners in discussions that are appropriately structured and focused on the real problem, funding,” Anders Lindall, spokesman for the American Federation of State County and Municipal Employees Council 31, said in a prepared statement.
Brainard said that Illinois' constitutional provision creates a “higher hurdle” to pension changes. However, he said, “I would not consider any single provision to be absolutely iron clad, with the one exception of benefits earned to date.”
Both Brainard and Draine agreed that states also need to consider the role that pension benefits play in recruitment.
“A lot of the focus has been on the pension side of things,” Draine said. “States do need to balance the need to control costs with the need to recruit and retain a public sector work force.”
Brainard said the promise of retirement security can help to attract quality workers and keep them on the job. “You have to find a set of solutions that will get you a work force capable of delivering the results that your constitutions want and deserve, and you have to do that at a cost that’s sustainable over the long term.”
All four legislative leaders and Gov. Pat Quinn have said that pension reform is a priority in the upcoming legislative session, but their opinions differ on what would be best for the state and legal under the Illinois Constitution. Recent reforms in other states could provide models as lawmakers move forward. This is the final installment in a three-part series that looks at different aspects of reform in other states.
While labor issues in some states have turned into ugly fights that involved sit-ins and heated rhetoric, one state managed to work out pension changes through negotiations with its unions.
In Vermont, state officials sat down with labor leaders and worked out a deal that will save the state about $15 million a year, which was about 10 percent of the state’s budget deficit at the time the deal was struck. Employees will contribute more of their pay toward their retirement costs. It varies for different workers, but it will mean about 1 percent more of their salaries would go to their pensions. Workers will have to wait longer to retire, but will see a bump in benefits. The deal also includes a two-year 3 percent pay cut for state employees, a first in Vermont.
Employees in many states have had to pay more for their retirement benefits. In 2010, 11 states increased the amount employees must contribute to their retirement. In 2011, it happened 16 more times, although some of the same states that had raised contribution levels the previous year made the move again. “If you were to look across the country in cases where required pension contributions has been raised by employees you would find a range for different reasons,” said Keith Brainard, research director for National Association of State Retirement Administrators.
He said, “It’s more the absence of something — the absence of a constitutional provision, the lack of a statute” that allows states to increase contributions. According the National Conference of State Legislatures, 12 of the 2011 increases applied to at least some current employees. However, David Draine, senior researcher for Pew Center on the States, said: “We’ve seen more states considering — though not necessarily going for it — models where employees can keep their current benefits but have to pay more for them.”
That is what House Minority Leader Tom Cross said needs to happen in Illinois. Under Cross’ proposal, Senate Bill 17, workers who want to stay in the current benefit system would have to pay more. “You’ve got to truly pay for the cost of your benefits,” Cross said at a recent news conference.
What sets Vermont apart is that state workers — not legislators — approved the increased contributions through their unions.
“I think what happened in Vermont is that the governor and others sat down with labor and said, ‘We’ve got this problem. There’s only so much money to go around, and something’s got to give,'” Brainard said. The state is facing a deficit, a pension funding shortfall and, according to Vermont Public Radio, 25 percent of Vermont state workers will be eligible to retire by 2015. Other key factors in the negotiations may be the fact that Vermont is a small state and has a tradition of public civic engagement.
Brainard said Vermont is an example where defined benefits plans can continue to be workable and states do not have to switch to 401(k)-type defined contribution plans to tackle their pension problems.
Senate President John Cullerton said he would like to see Illinois negotiate a deal with its unions. “We can affect current employees … with laws that have a contractual basis. If there’s a reduction in benefit, there has to be a corresponding consideration, and there has to be acceptance," Cullerton said at a recent news conference.
Cullerton believes that any changes imposed by the state to benefits for current employees would be unconstitutional. Cullerton said Cross’ bill is unconstitutional and lacks the support to pass. “It hasn’t even been called, so apparently they don’t have enough votes for it.” He said that pension reform is also a priority of his, but that it should be achieved through negotiations with unions. “Politically, it would be real, for some people, just easy I guess to pass a bill, claim you did something, have it [blocked by the courts], spend millions of dollars in legal fees and then two years later find out it is unconstitutional.”
That is what former Vermont Treasurer Jeb Spaulding, who worked on the agreement in his state, wanted to avoid. “It would have been a Pyrrhic victory if we forced through a plan that was enjoined or overturned and we didn’t have any savings at all,” Spaulding told Stateline.
However, Brainard said states such as Illinois might have little to offer unions besides the avoidance of negative outcomes. “I think Illinois is almost in a class by itself in terms of its chronic neglect of its pension plan.” He said. “The best they might have to offer in a lot of cases is that they would forestall attrition and layoffs.”
Illinois union officials say they want to be at the table for any talk of pension changes, but they say that workers should not have to pay for the underfunding of the pension system after lawmakers and governors skipped required contributions year after year. The only way to solve the pension funding problem is for the unions that represent public employees — whose retirement security is dependent on the health of the pension funds and whose deferred compensation makes up 100 percent of the funds’ assets — to be full partners in discussions that are appropriately structured and focused on the real problem, funding,” Anders Lindall, spokesman for the American Federation of State County and Municipal Employees Council 31, said in a prepared statement.
Brainard said that Illinois' constitutional provision creates a “higher hurdle” to pension changes. However, he said, “I would not consider any single provision to be absolutely iron clad, with the one exception of benefits earned to date.”
Both Brainard and Draine agreed that states also need to consider the role that pension benefits play in recruitment.
“A lot of the focus has been on the pension side of things,” Draine said. “States do need to balance the need to control costs with the need to recruit and retain a public sector work force.”
Brainard said the promise of retirement security can help to attract quality workers and keep them on the job. “You have to find a set of solutions that will get you a work force capable of delivering the results that your constitutions want and deserve, and you have to do that at a cost that’s sustainable over the long term.”
Monday, January 23, 2012
Pension reform across the country
By Jamey Dunn
All four legislative leaders and Gov. Pat Quinn have said that pension reform is a priority in the upcoming legislative session, but their opinions differ on what would be best for the state and legal under the Illinois Constitution. Recent reforms in other states could provide models as lawmakers move forward. This three-part series will look at different aspects of reform in other states.
As Illinois looks at its seriously underfunded retirement system for state workers, it is not alone. A recent Pew Center on the States study found that at a 51 percent funding level, Illinois has the most under-funded pension system in the nation as of Fiscal Year 2009. However, 30 other states were also under the recommended 80 percent funding level. In FY 2008, 22 states fell below that funding level. Overall, state pensions were funded at a 78 percent level in fiscal year 2009, which is down from 84 percent in FY 2008.
Since pension systems vary so much across the states—including to what degree benefits are protected by statute and constitutional provision—Susan Urahn, managing director for Pew Center on the States notes that it is difficult to make an "apples to apples comparison."
“We’ve talked about pension reform in this state until we’re blue in the face. We know what needs to be done. We know that other states have done what we need to do, like Rhode Island,” House Minority Leader Tom Cross said during a recent news conference.
It is fitting that Cross would cite Rhode Island as an example, since it is the only state that has in recent years taken some controversial pension reform steps similar to a proposal from Cross. David Draine, senior researcher for the Pew Center on the States, called Rhode Island’s reforms “the only [recent] example of a state that really changed the terms of pension benefits for current employees.”
The plan, approved by Rhode Island lawmakers and signed into law late last year, would freeze cost of living increases for current retirees. Current workers would keep all of their benefits to date, but they would be shifted to a so called-hybrid plan for future benefits. Part of their retirement investment would go into a defined benefits plan and part of it would go into a defined contribution plan, much like a 401(k). Some of the payout would be guaranteed, and some of it would be tied to the performance of investments. The retirement age would also increase for many workers.
Rhode Island had one of the largest funding gaps in the country relative to its size. The state operated its fund on a pay-as-you-go basis from the 1930s until the 1970s. “Pension systems with really severe problems often started out as 'pay-as-you-go' plans, in which retirees derived their benefits from current state revenues, not any pool of accumulated cash. Inevitably, the number of retirees grew, relative to the number of current employees, and the checks going out the door took up a larger and larger portion of state revenues,” said a study of state pensions from the Pew Center on the States. “You’re paying for the sins of the past,” Frank Karpinski, executive director of the Rhode Island system, told Pew.
If the reforms in Rhode Island survive the expected court challenges, they are projected to reduce the state’s more than $7 billion unfunded liability by $3 billion. That plan passed with the bipartisanship that Cross is seeking for pension reform in Illinois. It was backed by the Democratic state treasurer and independent governor. However, unlike Illinois, Rhode Island does not have a provision in its constitution protecting pension benefits.
Rhode Island Treasurer Gina Raimondo, who created plan for change and traveled the state for almost a year to promote it, said that the debate was not marked by the anti-union rancor that characterized labor disputes in states such as Wisconsin. But a backlash has begun. “This would be different if it was given to us. No one gave us anything. We paid for these pensions,” Michael Downey — president of Council 94, Rhode Island's largest public employees union — told Rhode Island Public Radio. Downey said the unions are gearing up for a court challenge as well as a political battle. “When you are retired and you go to check your monthly statement, you won't forget this. You'll remember this. Will it be remembered in the polls? I'm sure it will,” he said.
The main similarity that the Rhode Island plan has to Cross’ proposal is that it would change the benefit structure for employees hired before its creation. Under Cross’ plan, workers would keep previously earned benefits but then would have to choose between paying more for their current benefit level, having their benefits reduced or moving to a 401K-type plan known as a defined contributions program. Illinois currently has a defined benefits plan that guarantees employees a specific level of benefits no matter what happens to the pension funds’ investments. Instead of requiring employees to choose between defined benefits or defined contributions, plans like the one passed in Rhode Island rely on a combination of both.
So-called hybrid pension plans have become popular in recent years. In addition to Rhode Island, Florida, Georgia, Indiana, Michigan, Ohio, Oregon, Utah and Washington all have hybrid style pension plans. Under these plans, employees do not chose between a defined benefits and defined contribution plan but participate in both. Most typically, employee contributions are placed into a 401(k)-type savings plan while state funds pay out defined benefits. While hybrid plans have been getting recent attention, the majority of states still have defined benefits plans.
“Currently, [the hybrid] plan design is receiving increased attention as states find that closing a traditional defined benefit pension plan to new employees could increase — rather than reduce — costs, and that providing only a 401(k)-type plan does not meet retirement security, human resource or fiscal needs,” said a report from the National Association of State Retirement Administrators. Legal issues aside, transitioning from a defined benefits to a defined contribution plan can be tricky because those who have retired under the defined benefits plan will still get their benefits. If there are no new enrollees in a defined benefits plan, it cuts off a large source of funding to the plan, and the state often has to make up the difference.
“It is difficult — usually impossible — to save money certainly in the near term by closing down a pension plan and moving to a defined contribution plan,” said Keith Brainard, research director for National Association of State Retirement Administrators.
Check back tomorrow for a look at the legal battles in other states over scaling back cost of living increases for retirees.
All four legislative leaders and Gov. Pat Quinn have said that pension reform is a priority in the upcoming legislative session, but their opinions differ on what would be best for the state and legal under the Illinois Constitution. Recent reforms in other states could provide models as lawmakers move forward. This three-part series will look at different aspects of reform in other states.
As Illinois looks at its seriously underfunded retirement system for state workers, it is not alone. A recent Pew Center on the States study found that at a 51 percent funding level, Illinois has the most under-funded pension system in the nation as of Fiscal Year 2009. However, 30 other states were also under the recommended 80 percent funding level. In FY 2008, 22 states fell below that funding level. Overall, state pensions were funded at a 78 percent level in fiscal year 2009, which is down from 84 percent in FY 2008.
Since pension systems vary so much across the states—including to what degree benefits are protected by statute and constitutional provision—Susan Urahn, managing director for Pew Center on the States notes that it is difficult to make an "apples to apples comparison."
“We’ve talked about pension reform in this state until we’re blue in the face. We know what needs to be done. We know that other states have done what we need to do, like Rhode Island,” House Minority Leader Tom Cross said during a recent news conference.
It is fitting that Cross would cite Rhode Island as an example, since it is the only state that has in recent years taken some controversial pension reform steps similar to a proposal from Cross. David Draine, senior researcher for the Pew Center on the States, called Rhode Island’s reforms “the only [recent] example of a state that really changed the terms of pension benefits for current employees.”
The plan, approved by Rhode Island lawmakers and signed into law late last year, would freeze cost of living increases for current retirees. Current workers would keep all of their benefits to date, but they would be shifted to a so called-hybrid plan for future benefits. Part of their retirement investment would go into a defined benefits plan and part of it would go into a defined contribution plan, much like a 401(k). Some of the payout would be guaranteed, and some of it would be tied to the performance of investments. The retirement age would also increase for many workers.
Rhode Island had one of the largest funding gaps in the country relative to its size. The state operated its fund on a pay-as-you-go basis from the 1930s until the 1970s. “Pension systems with really severe problems often started out as 'pay-as-you-go' plans, in which retirees derived their benefits from current state revenues, not any pool of accumulated cash. Inevitably, the number of retirees grew, relative to the number of current employees, and the checks going out the door took up a larger and larger portion of state revenues,” said a study of state pensions from the Pew Center on the States. “You’re paying for the sins of the past,” Frank Karpinski, executive director of the Rhode Island system, told Pew.
If the reforms in Rhode Island survive the expected court challenges, they are projected to reduce the state’s more than $7 billion unfunded liability by $3 billion. That plan passed with the bipartisanship that Cross is seeking for pension reform in Illinois. It was backed by the Democratic state treasurer and independent governor. However, unlike Illinois, Rhode Island does not have a provision in its constitution protecting pension benefits.
Rhode Island Treasurer Gina Raimondo, who created plan for change and traveled the state for almost a year to promote it, said that the debate was not marked by the anti-union rancor that characterized labor disputes in states such as Wisconsin. But a backlash has begun. “This would be different if it was given to us. No one gave us anything. We paid for these pensions,” Michael Downey — president of Council 94, Rhode Island's largest public employees union — told Rhode Island Public Radio. Downey said the unions are gearing up for a court challenge as well as a political battle. “When you are retired and you go to check your monthly statement, you won't forget this. You'll remember this. Will it be remembered in the polls? I'm sure it will,” he said.
The main similarity that the Rhode Island plan has to Cross’ proposal is that it would change the benefit structure for employees hired before its creation. Under Cross’ plan, workers would keep previously earned benefits but then would have to choose between paying more for their current benefit level, having their benefits reduced or moving to a 401K-type plan known as a defined contributions program. Illinois currently has a defined benefits plan that guarantees employees a specific level of benefits no matter what happens to the pension funds’ investments. Instead of requiring employees to choose between defined benefits or defined contributions, plans like the one passed in Rhode Island rely on a combination of both.
So-called hybrid pension plans have become popular in recent years. In addition to Rhode Island, Florida, Georgia, Indiana, Michigan, Ohio, Oregon, Utah and Washington all have hybrid style pension plans. Under these plans, employees do not chose between a defined benefits and defined contribution plan but participate in both. Most typically, employee contributions are placed into a 401(k)-type savings plan while state funds pay out defined benefits. While hybrid plans have been getting recent attention, the majority of states still have defined benefits plans.
“Currently, [the hybrid] plan design is receiving increased attention as states find that closing a traditional defined benefit pension plan to new employees could increase — rather than reduce — costs, and that providing only a 401(k)-type plan does not meet retirement security, human resource or fiscal needs,” said a report from the National Association of State Retirement Administrators. Legal issues aside, transitioning from a defined benefits to a defined contribution plan can be tricky because those who have retired under the defined benefits plan will still get their benefits. If there are no new enrollees in a defined benefits plan, it cuts off a large source of funding to the plan, and the state often has to make up the difference.
“It is difficult — usually impossible — to save money certainly in the near term by closing down a pension plan and moving to a defined contribution plan,” said Keith Brainard, research director for National Association of State Retirement Administrators.
Check back tomorrow for a look at the legal battles in other states over scaling back cost of living increases for retirees.
Monday, April 11, 2011
State finances still not on solid ground
By Jamey Dunn
Despite the passage of an income tax increase, Illinois lawmakers still have work to do to steer the state to stable financial footing.
The backlog of unpaid bills has remained “near or above record highs,” according to Comptroller Judy Baar Topinka’s report for the third quarter of the fiscal year—the first quarterly report she has issued since taking office. In fact, at $4.515 billion, the backlog is greater than it was at this time last year when the total of unpaid bills was $4.496 billion.
Topinka said if the trend continues, the state might not be able to pay off its late bills for this fiscal year before the August deadline. Legislators extended the deadline to pay off last year’s bills to last December, and Topinka predicts that such a move could happen again. “If the backlog of general funds bills at the end of the fiscal year is indeed similar to last year, the state will be unable to close the fiscal year 2011 lapse period by the traditional August end. In fact, Illinois was unable to pay off all of fiscal year 2010’s liabilities until December 31st last year, and could face similar challenges this year,” the report said.
Topinka said the ongoing backlog has caused her office to prioritize “critical payments,” such as general state aid to school districts and payments on the state’s borrowing. Illinois is also keeping up a 30-day payment cycle on certain Medicaid bills to capture temporarily elevated federal matching funds for the program. As long as the state pays providers within a month, the federal government will give Illinois 57 cents on the dollar instead of the standard 50-cent match. The higher reimbursement rates expires at the end of June. Although paying those bills brings in more federal money, Topinka said it also ties up cash flow.
On the revenue side, Topinka said money from the income tax increase is just starting to come into the state’s coffers. The state saw a revenue increase of 7 percent over the last quarter. Some of the money came from one-time sources, such as the tax amnesty program and the selling of bonds against money the state was awarded in a national settlement with tobacco companies. Sales tax revenues increased 8 percent, but $164 million out of the $414 million in sales tax revenues were brought in through the tax amnesty program. As stimulus funds dried up, federal revenues dropped $745 million, or 15 percent, over the third quarter. “While the state took action to increase its immediate cash flow, its fiscal standing remains precarious,” Topinka said.
Illinois has to pay off $1.3 in short-term borrowing over the next three months and faces a larger monthly debt service payments than it did this time last year. Topinka also notes that the state shifted $2 billion in Medicaid payments over to funds outside of the General Revenue Fund in the fourth quarter of Fiscal Year 2010, a move the comptroller said the state couldn’t repeat this year.
Sen. John Sullivan, a Rushville Democrat, has been calling on Topinka to release a current total for the backlog of overdue bills. He said now that the number is out, the state needs to delve deeper into who is owed and how long they have been waiting for their payments. “The next step is to say…how much of that is 60 days past due, how much is 90 days, how much is 120 days, and so on and so forth,” Sullivan said
Sullivan said borrowing the amount the state would need to trim the late payments down to a 30- or 60-day cycle could be an alternative to Gov. Pat Quinn’s proposed $8.75 billion in borrowing to pay off all the state’s overdue obligations at once.
“Every bill does need to be paid,” Sullivan said. “But maybe we need to operate under a 30-to-60-day backlog. That’s certainly better than were we are now. It’s an improvement.” He added that the proposal would only be a temporary solution ,and the state should continue paying Medicaid bills in 30 days to bring in more federal money.
Sullivan said he hopes to help craft a compromise borrowing bill pay off some of the state’s overdue debts. Minority Leader Christine Radogno has said she supports “responsible” borrowing that is part of an overall plan to balance the budget. However, she has said there need to be more cuts to the budget for her to consider borrowing. She has also said that Quinn wants to borrow more than Republicans can support. Senate Republicans proposed about $5 billion in cuts from Quinn’s budget plan for next fiscal year. They say their plan would balance the budget and pay down the backlog without borrowing, although paying off the bills would happen over time. House Speaker Michael Madigan has said there is little support for Quinn’s plan in his chamber.
Despite the passage of an income tax increase, Illinois lawmakers still have work to do to steer the state to stable financial footing.
The backlog of unpaid bills has remained “near or above record highs,” according to Comptroller Judy Baar Topinka’s report for the third quarter of the fiscal year—the first quarterly report she has issued since taking office. In fact, at $4.515 billion, the backlog is greater than it was at this time last year when the total of unpaid bills was $4.496 billion.
Topinka said if the trend continues, the state might not be able to pay off its late bills for this fiscal year before the August deadline. Legislators extended the deadline to pay off last year’s bills to last December, and Topinka predicts that such a move could happen again. “If the backlog of general funds bills at the end of the fiscal year is indeed similar to last year, the state will be unable to close the fiscal year 2011 lapse period by the traditional August end. In fact, Illinois was unable to pay off all of fiscal year 2010’s liabilities until December 31st last year, and could face similar challenges this year,” the report said.
Topinka said the ongoing backlog has caused her office to prioritize “critical payments,” such as general state aid to school districts and payments on the state’s borrowing. Illinois is also keeping up a 30-day payment cycle on certain Medicaid bills to capture temporarily elevated federal matching funds for the program. As long as the state pays providers within a month, the federal government will give Illinois 57 cents on the dollar instead of the standard 50-cent match. The higher reimbursement rates expires at the end of June. Although paying those bills brings in more federal money, Topinka said it also ties up cash flow.
On the revenue side, Topinka said money from the income tax increase is just starting to come into the state’s coffers. The state saw a revenue increase of 7 percent over the last quarter. Some of the money came from one-time sources, such as the tax amnesty program and the selling of bonds against money the state was awarded in a national settlement with tobacco companies. Sales tax revenues increased 8 percent, but $164 million out of the $414 million in sales tax revenues were brought in through the tax amnesty program. As stimulus funds dried up, federal revenues dropped $745 million, or 15 percent, over the third quarter. “While the state took action to increase its immediate cash flow, its fiscal standing remains precarious,” Topinka said.
Illinois has to pay off $1.3 in short-term borrowing over the next three months and faces a larger monthly debt service payments than it did this time last year. Topinka also notes that the state shifted $2 billion in Medicaid payments over to funds outside of the General Revenue Fund in the fourth quarter of Fiscal Year 2010, a move the comptroller said the state couldn’t repeat this year.
Sen. John Sullivan, a Rushville Democrat, has been calling on Topinka to release a current total for the backlog of overdue bills. He said now that the number is out, the state needs to delve deeper into who is owed and how long they have been waiting for their payments. “The next step is to say…how much of that is 60 days past due, how much is 90 days, how much is 120 days, and so on and so forth,” Sullivan said
Sullivan said borrowing the amount the state would need to trim the late payments down to a 30- or 60-day cycle could be an alternative to Gov. Pat Quinn’s proposed $8.75 billion in borrowing to pay off all the state’s overdue obligations at once.
“Every bill does need to be paid,” Sullivan said. “But maybe we need to operate under a 30-to-60-day backlog. That’s certainly better than were we are now. It’s an improvement.” He added that the proposal would only be a temporary solution ,and the state should continue paying Medicaid bills in 30 days to bring in more federal money.
Sullivan said he hopes to help craft a compromise borrowing bill pay off some of the state’s overdue debts. Minority Leader Christine Radogno has said she supports “responsible” borrowing that is part of an overall plan to balance the budget. However, she has said there need to be more cuts to the budget for her to consider borrowing. She has also said that Quinn wants to borrow more than Republicans can support. Senate Republicans proposed about $5 billion in cuts from Quinn’s budget plan for next fiscal year. They say their plan would balance the budget and pay down the backlog without borrowing, although paying off the bills would happen over time. House Speaker Michael Madigan has said there is little support for Quinn’s plan in his chamber.
Thursday, March 31, 2011
Senate approves merger of comptroller and treasurer
By Jamey Dunn
Voters may have the choice to eliminate a constitutional office on the 2012 general election ballot.
The Illinois Senate approved a measure today to amend the Illinois Constitution. The plan would merge the offices of comptroller and treasurer. The legislation has the support of both Treasurer Judy Baar Topinka and Comptroller Dan Rutherford.
The majority of states do not have two separate offices to handle their finances, and in the past, neither has Illinois. Framers of the 1970 Constitution created two positions to add extra oversight after Orville Hodge, the state’s chief financial officer in the 1950s bilked the state out of about $2.5 million in the 1950s. After such blatant corruption, the drafters decided to split up the functions of the office, known as the auditor of public accounts, charging the treasurer with making the state’s investments and the comptroller with paying its bills. (For more on the merger, as well as another story of financial corruption in Illinois history, see Illinois Issues blog February 14, 2011.)
Rutherford said that another move the drafters made—the creation of the office of auditor general—has led to the two fiscal offices being obsolete. He says the oversight provided by the auditor’s office, currently held by William Holland, safeguards taxpayers against graft. He added that advancements in technology over the last six decades also make dollars much easier to track and account for. “Back in the days of Orville Hodge, they were still using typewriters, pieces of paper and pencils,” he said.
According to Rutherford, the move would save the state about $12 million. “If government can be more efficient by having less officers and less departments and so forth, then government should do that.”
The proposal still needs the approval of three-fifths of House members. Then the question of whether to merge the two positions into a single one called the comptroller of the treasury would appear before voters on the 2012 general election ballot. If voters chose to merge the offices, then they would have the opportunity to elect Illinois’ first comptroller of the treasury in 2014.
Voters may have the choice to eliminate a constitutional office on the 2012 general election ballot.
The Illinois Senate approved a measure today to amend the Illinois Constitution. The plan would merge the offices of comptroller and treasurer. The legislation has the support of both Treasurer Judy Baar Topinka and Comptroller Dan Rutherford.
The majority of states do not have two separate offices to handle their finances, and in the past, neither has Illinois. Framers of the 1970 Constitution created two positions to add extra oversight after Orville Hodge, the state’s chief financial officer in the 1950s bilked the state out of about $2.5 million in the 1950s. After such blatant corruption, the drafters decided to split up the functions of the office, known as the auditor of public accounts, charging the treasurer with making the state’s investments and the comptroller with paying its bills. (For more on the merger, as well as another story of financial corruption in Illinois history, see Illinois Issues blog February 14, 2011.)
Rutherford said that another move the drafters made—the creation of the office of auditor general—has led to the two fiscal offices being obsolete. He says the oversight provided by the auditor’s office, currently held by William Holland, safeguards taxpayers against graft. He added that advancements in technology over the last six decades also make dollars much easier to track and account for. “Back in the days of Orville Hodge, they were still using typewriters, pieces of paper and pencils,” he said.
According to Rutherford, the move would save the state about $12 million. “If government can be more efficient by having less officers and less departments and so forth, then government should do that.”
The proposal still needs the approval of three-fifths of House members. Then the question of whether to merge the two positions into a single one called the comptroller of the treasury would appear before voters on the 2012 general election ballot. If voters chose to merge the offices, then they would have the opportunity to elect Illinois’ first comptroller of the treasury in 2014.
Monday, February 14, 2011
Free ride for all seniors program is over
By Jamey Dunn
A program backed by former Gov. Rod Blagojevich, which was also a popular target of legislators looking to cut the budget, was limited today.
Gov. Pat Quinn signed Senate Bill 3788, which ends the free-rides-for-seniors program as it existed under Blagojevich. Under the new law, all seniors will pay half-price to use mass transit. To receive free rides, seniors must have income levels that qualify for state assistance programs, such as a state pharmaceutical aid program. One person making $27,610 or less will still be eligible for a free ride. Members of a two-person household earning less than $36,635 and any households of three or more that earn less than $45,657 will also still be able to ride for free.
“This reform sets the standard we must meet for state programs by reducing costs while also ensuring transportation services for our most dependent seniors,” Quinn said in a written statement. “To start off a week that will highlight important budget reforms, we’re taking important steps to ensure our state transit programs are fiscally responsible but also accessible to the riders who depend on them.”
A proposal to limit the program gained traction last spring but then stalled. Legislators brought the issue up again in the January lame-duck session, and the bill passed with little debate and no organized opposition. “It’s about time,” Senate Minority Leader Christine Radogno, a Lemont Republican, who has been pushing to roll the program back, said when the bill passed.
A program backed by former Gov. Rod Blagojevich, which was also a popular target of legislators looking to cut the budget, was limited today.
Gov. Pat Quinn signed Senate Bill 3788, which ends the free-rides-for-seniors program as it existed under Blagojevich. Under the new law, all seniors will pay half-price to use mass transit. To receive free rides, seniors must have income levels that qualify for state assistance programs, such as a state pharmaceutical aid program. One person making $27,610 or less will still be eligible for a free ride. Members of a two-person household earning less than $36,635 and any households of three or more that earn less than $45,657 will also still be able to ride for free.
“This reform sets the standard we must meet for state programs by reducing costs while also ensuring transportation services for our most dependent seniors,” Quinn said in a written statement. “To start off a week that will highlight important budget reforms, we’re taking important steps to ensure our state transit programs are fiscally responsible but also accessible to the riders who depend on them.”
A proposal to limit the program gained traction last spring but then stalled. Legislators brought the issue up again in the January lame-duck session, and the bill passed with little debate and no organized opposition. “It’s about time,” Senate Minority Leader Christine Radogno, a Lemont Republican, who has been pushing to roll the program back, said when the bill passed.
Monday, January 03, 2011
Lame-duck plans still coming together
By Jamey Dunn
While Illinois legislators are considering substantial legislation during the final days of their lame-duck session, they are still hammering out the details.
A large gaming expansion that passed in the Senate in November is undergoing some changes in the House. When the Senate passed Senate Bill 737, there was some disagreement between Senate sponsor Terry Link, a Waukegan Democrat, and House sponsor Rep. Lou Lang, a Democrat from Skokie. Link said he expected the bill to pass in the House, while Lang said it needed some tweaks.
Casino owners oppose the measure, which would allow five new casinos in the state and slot machines at horse racing tracks, saying the expansion would cut down on their already shrinking profits. A recent report from the Commission on Government Forecasting and Accountability found that Illinois gambling revenues are at a 10-year low.
The measure, as passed in the Senate, would allow operating casinos to increase the number of gaming positions to 1,600 each immediately and 2,000 each in 2013.
Instead of presenting the bill to a House committee today, Lang called on stakeholders to come to his office and discuss changes. He told members of the casino industry to come forward with suggestions over the next 24 hours.
“This bill was not designed to hurt [casino owners,] but because the original drafting of the bill in the Senate does provide a certain competitive disadvantage … the amendments we are going to propose will provide certain relief to [casino owners] in some areas.”
Lang said he planned to offer casinos tax credits and the chance for expansion, among other perks. For this bill to succeed, Lang will have to get his new version of the measure passed in the House and the changes approved by the Senate before January 12, when the new legislative session begins and the bill — if not approved by both chambers — would die.
In other legislative action today, the chairwoman of a special Senate committee to reform education said she plans to put the brakes on proposed changes, that would give less credence to teacher seniority and make it more difficult for teacher's unions to strike. During House committee hearings, union officials have complained that legislators were railroading through drastic changes and cutting teachers out of negotiations.
“Give the people who will have to implement these reforms time to figure them out. Not months. Not years. But not days either. That’s not right. But it does make everyone watching this today wonder what the motivation is -- real change that improves education for kids, or something else,” Audry Soglin, executive director of the Illinois Education Association, said in November at a House committee hearing on the proposed reforms.
Illinois teacher’s unions are working on their own legislative package, which overlaps some proposals from reform groups. It also calls for expanded teacher mentoring programs, training for school board members and a “student bill of rights.” Maywood Democratic Sen. Kimberly Lightford, who was a key negotiator in new education laws passed as part of the state’s bid for funds from Race to the Top federal grant program, said she said she hopes to merge both plans.
Democratic leaders from both chambers are backing budget-related issues. Senate President John Cullerton is renewing a push to pass a dollar-a-pack cigarette tax increase through the House. The Senate already approved SB 44. If the House does not take up in the last days of the current session, Cullerton plans to introduce another cigarette tax increase after January 12.
House Speaker Michael Madigan is the sponsor of a constitutional amendment that would set limits on state spending by linking it to changes in average income.
If the budget restraints are too cumbersome during a given fiscal year, the governor could declare a “fiscal emergency.” The General Assembly, with approval from the comptroller and treasurer, would then be able to vote to increase spending levels above the limits set by the amendment.
While Illinois legislators are considering substantial legislation during the final days of their lame-duck session, they are still hammering out the details.
A large gaming expansion that passed in the Senate in November is undergoing some changes in the House. When the Senate passed Senate Bill 737, there was some disagreement between Senate sponsor Terry Link, a Waukegan Democrat, and House sponsor Rep. Lou Lang, a Democrat from Skokie. Link said he expected the bill to pass in the House, while Lang said it needed some tweaks.
Casino owners oppose the measure, which would allow five new casinos in the state and slot machines at horse racing tracks, saying the expansion would cut down on their already shrinking profits. A recent report from the Commission on Government Forecasting and Accountability found that Illinois gambling revenues are at a 10-year low.
The measure, as passed in the Senate, would allow operating casinos to increase the number of gaming positions to 1,600 each immediately and 2,000 each in 2013.
Instead of presenting the bill to a House committee today, Lang called on stakeholders to come to his office and discuss changes. He told members of the casino industry to come forward with suggestions over the next 24 hours.
“This bill was not designed to hurt [casino owners,] but because the original drafting of the bill in the Senate does provide a certain competitive disadvantage … the amendments we are going to propose will provide certain relief to [casino owners] in some areas.”
Lang said he planned to offer casinos tax credits and the chance for expansion, among other perks. For this bill to succeed, Lang will have to get his new version of the measure passed in the House and the changes approved by the Senate before January 12, when the new legislative session begins and the bill — if not approved by both chambers — would die.
In other legislative action today, the chairwoman of a special Senate committee to reform education said she plans to put the brakes on proposed changes, that would give less credence to teacher seniority and make it more difficult for teacher's unions to strike. During House committee hearings, union officials have complained that legislators were railroading through drastic changes and cutting teachers out of negotiations.
“Give the people who will have to implement these reforms time to figure them out. Not months. Not years. But not days either. That’s not right. But it does make everyone watching this today wonder what the motivation is -- real change that improves education for kids, or something else,” Audry Soglin, executive director of the Illinois Education Association, said in November at a House committee hearing on the proposed reforms.
Illinois teacher’s unions are working on their own legislative package, which overlaps some proposals from reform groups. It also calls for expanded teacher mentoring programs, training for school board members and a “student bill of rights.” Maywood Democratic Sen. Kimberly Lightford, who was a key negotiator in new education laws passed as part of the state’s bid for funds from Race to the Top federal grant program, said she said she hopes to merge both plans.
Democratic leaders from both chambers are backing budget-related issues. Senate President John Cullerton is renewing a push to pass a dollar-a-pack cigarette tax increase through the House. The Senate already approved SB 44. If the House does not take up in the last days of the current session, Cullerton plans to introduce another cigarette tax increase after January 12.
House Speaker Michael Madigan is the sponsor of a constitutional amendment that would set limits on state spending by linking it to changes in average income.
If the budget restraints are too cumbersome during a given fiscal year, the governor could declare a “fiscal emergency.” The General Assembly, with approval from the comptroller and treasurer, would then be able to vote to increase spending levels above the limits set by the amendment.
Wednesday, October 20, 2010
Quinn and Brady touch on budget ideas: Part 2
By Jamey Dunn
During recent debates, Gov. Pat Quinn has mentioned the “Budgeting for Results” provision — a plan to reform the state budgeting process — included in a budget bill approved last spring. (Scroll almost to the end of the bill. Section 50-25 is the bulk of it.)
However, Quinn has done little to describe the new law that seeks to make drastic changes in the way money is doled out to agencies and programs by next fiscal year.
The changes require the governor to work with legislative budgeteers and lay out priorities and goals for each agency in the budget. Executive officers will be required to set goals for their offices, as well. Budgeting for the next fiscal year will be based in part on the agencies’ abilities to meet their goals, and the governor’s office is required to report to the public on the results, compared with the original goals.
Democratic Sen. Dan Kotowski , who sponsored the bill that originally contained the reforms, said the measures represent a “paradigm change in Springfield.”
Kotowski said measuring effectiveness would give lawmakers the ability to “make decisions to cut, fund, eliminate and reform programs” based on data. He added that funding choices are now often made based on how much money a program got in the previous year and which programs have the most vocal backers. He said there is a mentality of “You have to support this because we’ve always supported it.”
Kotowski, who is from Park Ridge, said having measurable outcomes could make difficult cuts more tolerable for politicians and constituents, but they will also make it easier to justify funding for programs that work. “Here’s our budget, and it’s not just numbers, and it’s not just dollars being spent. It’s outcomes.”
In the end, he thinks such reforms could make voters more open to a possible tax increase. “When people see that government is making a difference in their lives, they are more likely to support revenue for those programs.” Kotowski made a down-to-the-wire decision to back the income tax increase approved by the Senate last year.
This new process would, in theory, mean no more budgeting in the way the legislature has for the last two fiscal years — approving lump sums and letting the governor make the cuts. “We wanted to turn a bad situation into a good one,” Kotowski said. He added that the reforms are intended to “make sure that we never, never do budgets like this again in the state of Illinois.”
Kotowski said he has been working with Quinn on the plan for the last year. If Brady wins the governor’s race, the senator said he could work with him on the reforms. However, he is worried about Brady’s proposal to cut the budget by 10 percent. “My concern is that he doesn’t understand the concept of funding: what works and cutting what doesn’t.”
Calls to Brady’s campaign on the subject were not returned. Brady voted against the bill, but since the reforms were contained in the “Emergency Budget Act,” which broadly expanded Quinn’s budgeting powers, little can be determined from the vote in relation to these measures. A section of Brady’s recovery plan does sound similar to some aspects of the new law:
No new spending initiative or program expansion will be allowed without a linked
funding source and measurable outcomes. … Further, when an agency seeks budget authority, it makes a contract with the people that it will meet its performance expectations, or it will be discontinued.
However, Brady’s plan puts more emphasis on balancing the budget and programs being linked to specific funding sources.
Kotowski admitted that the changes he sought have been met with some skepticism but added that he has been working with stakeholders on the plan for some time. He also pointed out that the requirements have been signed into law and will apply to the budget for fiscal year 2012. “If they don’t follow the law, we’ll file an injunction with the attorney general.”
Calls to Quinn’s budget office to inquire about the “Budgeting for Results” plan were not returned.
During recent debates, Gov. Pat Quinn has mentioned the “Budgeting for Results” provision — a plan to reform the state budgeting process — included in a budget bill approved last spring. (Scroll almost to the end of the bill. Section 50-25 is the bulk of it.)
However, Quinn has done little to describe the new law that seeks to make drastic changes in the way money is doled out to agencies and programs by next fiscal year.
The changes require the governor to work with legislative budgeteers and lay out priorities and goals for each agency in the budget. Executive officers will be required to set goals for their offices, as well. Budgeting for the next fiscal year will be based in part on the agencies’ abilities to meet their goals, and the governor’s office is required to report to the public on the results, compared with the original goals.
Democratic Sen. Dan Kotowski , who sponsored the bill that originally contained the reforms, said the measures represent a “paradigm change in Springfield.”
Kotowski said measuring effectiveness would give lawmakers the ability to “make decisions to cut, fund, eliminate and reform programs” based on data. He added that funding choices are now often made based on how much money a program got in the previous year and which programs have the most vocal backers. He said there is a mentality of “You have to support this because we’ve always supported it.”
Kotowski, who is from Park Ridge, said having measurable outcomes could make difficult cuts more tolerable for politicians and constituents, but they will also make it easier to justify funding for programs that work. “Here’s our budget, and it’s not just numbers, and it’s not just dollars being spent. It’s outcomes.”
In the end, he thinks such reforms could make voters more open to a possible tax increase. “When people see that government is making a difference in their lives, they are more likely to support revenue for those programs.” Kotowski made a down-to-the-wire decision to back the income tax increase approved by the Senate last year.
This new process would, in theory, mean no more budgeting in the way the legislature has for the last two fiscal years — approving lump sums and letting the governor make the cuts. “We wanted to turn a bad situation into a good one,” Kotowski said. He added that the reforms are intended to “make sure that we never, never do budgets like this again in the state of Illinois.”
Kotowski said he has been working with Quinn on the plan for the last year. If Brady wins the governor’s race, the senator said he could work with him on the reforms. However, he is worried about Brady’s proposal to cut the budget by 10 percent. “My concern is that he doesn’t understand the concept of funding: what works and cutting what doesn’t.”
Calls to Brady’s campaign on the subject were not returned. Brady voted against the bill, but since the reforms were contained in the “Emergency Budget Act,” which broadly expanded Quinn’s budgeting powers, little can be determined from the vote in relation to these measures. A section of Brady’s recovery plan does sound similar to some aspects of the new law:
No new spending initiative or program expansion will be allowed without a linked
funding source and measurable outcomes. … Further, when an agency seeks budget authority, it makes a contract with the people that it will meet its performance expectations, or it will be discontinued.
However, Brady’s plan puts more emphasis on balancing the budget and programs being linked to specific funding sources.
Kotowski admitted that the changes he sought have been met with some skepticism but added that he has been working with stakeholders on the plan for some time. He also pointed out that the requirements have been signed into law and will apply to the budget for fiscal year 2012. “If they don’t follow the law, we’ll file an injunction with the attorney general.”
Calls to Quinn’s budget office to inquire about the “Budgeting for Results” plan were not returned.
Tuesday, October 19, 2010
Brady and Quinn touch on budget ideas during debates
By Jamey Dunn
Both Gov. Pat Quinn and his Republican opponent for governor, Sen. Bill Brady, have avoided sharing many specific details of their budget plans during the recent debates. However, they each briefly mentioned some compelling ideas for tackling the state’s broken finances.
When asked about the possibility of borrowing up to $50 billion to help pay down the state’s unfunded pension liability, Brady touched on a borrowing plan to pay off Illinois’ growing stack of past due bills.
“Once we solve the pension crisis, there are some who have suggested that the marketplace may make it more affordable to pay back the backlog of unpaid bills that Gov. Quinn and Gov. Blagojevich have racked up,” Brady said at the recent debate in Elmhurst. “The crisis is so bad we have to consider all options.”
Brady has not ruled out the $50 billion in pension borrowing, which he has said would go toward the unfunded liability not the annual payments. Brady has also characterized the idea as one of many possible plans floating in the ether.
Patty Schuh, a Brady spokeswoman, said borrowing to pay down the deficit or fund the operating budget is out of the question. She said Brady “will not borrow to fill the structural debt.”
However, she added that Brady would not rule out borrowing against a “dedicated revenue stream” as part of a payment plan to address the backlog of unpaid bills.
Brady does not support $4 billion in borrowing, which the Senate plans to take up shortly after the election, to make this fiscal year’s pension payment “I’m opposed to that. Because [Quinn] does not have a plan to pay it back. You cannot borrow for structural operating deficits,” he said.
Quinn — who at the Elmhurst debate referred to his role in the budget crisis as the “cleanup man” — scoffed at Brady’s take on borrowing. “The state of Illinois is not going to borrow $50 billion. That is the most ridiculous thing you could possibly do.”
A statement Brady made to reporters after the debate implied solving the state’s deficit would take priority over the backlog. “We have to eliminate the structural deficit year one and then pay back the backlog of unpaid bills.”
However, Schuh said today that Brady plans to tackle both issues “in tandem” adding “those unpaid bills are out there” and cannot be ignored.
Meanwhile, Quinn has been touting the “Budgeting for Results” provision, which was rolled into the approved budget bill last spring, in recent debates. Check out tomorrow’s blog for a closer look at what it is and what role it could play in the budgeting process for next fiscal year.
Both Gov. Pat Quinn and his Republican opponent for governor, Sen. Bill Brady, have avoided sharing many specific details of their budget plans during the recent debates. However, they each briefly mentioned some compelling ideas for tackling the state’s broken finances.
When asked about the possibility of borrowing up to $50 billion to help pay down the state’s unfunded pension liability, Brady touched on a borrowing plan to pay off Illinois’ growing stack of past due bills.
“Once we solve the pension crisis, there are some who have suggested that the marketplace may make it more affordable to pay back the backlog of unpaid bills that Gov. Quinn and Gov. Blagojevich have racked up,” Brady said at the recent debate in Elmhurst. “The crisis is so bad we have to consider all options.”
Brady has not ruled out the $50 billion in pension borrowing, which he has said would go toward the unfunded liability not the annual payments. Brady has also characterized the idea as one of many possible plans floating in the ether.
Patty Schuh, a Brady spokeswoman, said borrowing to pay down the deficit or fund the operating budget is out of the question. She said Brady “will not borrow to fill the structural debt.”
However, she added that Brady would not rule out borrowing against a “dedicated revenue stream” as part of a payment plan to address the backlog of unpaid bills.
Brady does not support $4 billion in borrowing, which the Senate plans to take up shortly after the election, to make this fiscal year’s pension payment “I’m opposed to that. Because [Quinn] does not have a plan to pay it back. You cannot borrow for structural operating deficits,” he said.
Quinn — who at the Elmhurst debate referred to his role in the budget crisis as the “cleanup man” — scoffed at Brady’s take on borrowing. “The state of Illinois is not going to borrow $50 billion. That is the most ridiculous thing you could possibly do.”
A statement Brady made to reporters after the debate implied solving the state’s deficit would take priority over the backlog. “We have to eliminate the structural deficit year one and then pay back the backlog of unpaid bills.”
However, Schuh said today that Brady plans to tackle both issues “in tandem” adding “those unpaid bills are out there” and cannot be ignored.
Meanwhile, Quinn has been touting the “Budgeting for Results” provision, which was rolled into the approved budget bill last spring, in recent debates. Check out tomorrow’s blog for a closer look at what it is and what role it could play in the budgeting process for next fiscal year.
Wednesday, August 18, 2010
Quinn and Brady vague on the budget
By Jamey Dunn
Both Gov. Pat Quinn and his Republican opponent, state Sen. Bill Brady, have yet to publicly spell out all the details of their plans for the state budget.
Quinn claims he has made about $3 billion in cuts during his time in office, and Brady said he plans to cut a “dime on every dollar of government spending.
“We’ve cut the budget this fiscal year by $1.4 billion. We have laid out the exact blueprint,” Quinn said.
Republicans have called on Quinn in the past to produce a list of his cuts, but he has not obliged. When Quinn laid out agency cuts at the beginning of the 2011 fiscal year, he said the budget was a moving target. He issued new budget numbers for agencies this month.
David Comerford, a spokesman for the Illinois Federation of Teachers, describes Quinn’s plan as “built on quicksand.” He says Quinn must do more to reassure school superintendents that the $415 million that Illinois is set to receive from the federal government to help save education jobs will be spent to bring back teachers who got pink slips in the spring.
Quinn said of the federal funding: “Primarily it is for our K-12. However our education budget in Illinois, it’s somewhat seamless. … In a lot of ways, when we get help from Washington [D.C.] for our grammar schools and high schools, that does help us in other parts of our education budget.”
Comerford said there is still uncertainty surrounding the governor’s budget, and administrators will not know what their budgets will look like until Quinn makes his intentions clear. “We’d like to see people hired back. That’s why this was passed. Certainly a comment like that doesn’t help that situation,” he said in response to Quinn’s statement.
State Superintendent Christopher Koch says a special legislative session will be needed to dole out the money, but Quinn disagrees.
“I think people have a choice. They have a governor who tells the truth before the election. ... The other guy just wants to tell a bunch of fairy tales and raise your taxes, especially your property taxes after the election.”
Meanwhile, Brady has done next to nothing to inform voters of his specific intentions for the budget. He said he can’t build his plan unless he is in the governor’s office with the access to fiscal information and staff that the position entails. “I know we’re going to cut a dime on every dollar. … I don’t have the professionals in place to fully analyze the highest priorities.”
Brady said Quinn has limited access to budget information. “The lack of transparency from this insider government is creating an environment that — you can’t give specifics to those details.”
He has claimed to be able to balance the budget in a year without a tax increase while avoiding massive layoffs in education. That task could prove difficult, since education costs make up about a quarter of all state spending. He said he would consider cutting entire programs and that every state program is on the table for such cuts. “I will demand of every agency to come back with a budget of 90 percent. Show us what your priorities are within that 90 percent,” he said.
While neither candidate has presented a specific plan, that doesn’t stop them from taking jabs at each other's stance on the budget.
Brady said Quinn’s proposal to increase the state income tax from 3 percent to 4 percent would seriously damage the state’s economy and that the governor’s policies have chased jobs and tax revenues out of the state. “The Quinn government has been spending money we don’t have. We need a fiscal conservative to step into state government and live within our means.”
Quinn said failing to pass an income tax increase and making the kind of cuts to education that he says would be necessary under Brady’s plan would result in increased property taxes on the local level. “He doesn’t want to tell people what his budget plan is. We know what it is. It’s to wreck education, wreck health care, wreck public safety and harm the people of Illinois.”
Both Gov. Pat Quinn and his Republican opponent, state Sen. Bill Brady, have yet to publicly spell out all the details of their plans for the state budget.
Quinn claims he has made about $3 billion in cuts during his time in office, and Brady said he plans to cut a “dime on every dollar of government spending.
“We’ve cut the budget this fiscal year by $1.4 billion. We have laid out the exact blueprint,” Quinn said.
Republicans have called on Quinn in the past to produce a list of his cuts, but he has not obliged. When Quinn laid out agency cuts at the beginning of the 2011 fiscal year, he said the budget was a moving target. He issued new budget numbers for agencies this month.
David Comerford, a spokesman for the Illinois Federation of Teachers, describes Quinn’s plan as “built on quicksand.” He says Quinn must do more to reassure school superintendents that the $415 million that Illinois is set to receive from the federal government to help save education jobs will be spent to bring back teachers who got pink slips in the spring.
Quinn said of the federal funding: “Primarily it is for our K-12. However our education budget in Illinois, it’s somewhat seamless. … In a lot of ways, when we get help from Washington [D.C.] for our grammar schools and high schools, that does help us in other parts of our education budget.”
Comerford said there is still uncertainty surrounding the governor’s budget, and administrators will not know what their budgets will look like until Quinn makes his intentions clear. “We’d like to see people hired back. That’s why this was passed. Certainly a comment like that doesn’t help that situation,” he said in response to Quinn’s statement.
State Superintendent Christopher Koch says a special legislative session will be needed to dole out the money, but Quinn disagrees.
“I think people have a choice. They have a governor who tells the truth before the election. ... The other guy just wants to tell a bunch of fairy tales and raise your taxes, especially your property taxes after the election.”
Meanwhile, Brady has done next to nothing to inform voters of his specific intentions for the budget. He said he can’t build his plan unless he is in the governor’s office with the access to fiscal information and staff that the position entails. “I know we’re going to cut a dime on every dollar. … I don’t have the professionals in place to fully analyze the highest priorities.”
Brady said Quinn has limited access to budget information. “The lack of transparency from this insider government is creating an environment that — you can’t give specifics to those details.”
He has claimed to be able to balance the budget in a year without a tax increase while avoiding massive layoffs in education. That task could prove difficult, since education costs make up about a quarter of all state spending. He said he would consider cutting entire programs and that every state program is on the table for such cuts. “I will demand of every agency to come back with a budget of 90 percent. Show us what your priorities are within that 90 percent,” he said.
While neither candidate has presented a specific plan, that doesn’t stop them from taking jabs at each other's stance on the budget.
Brady said Quinn’s proposal to increase the state income tax from 3 percent to 4 percent would seriously damage the state’s economy and that the governor’s policies have chased jobs and tax revenues out of the state. “The Quinn government has been spending money we don’t have. We need a fiscal conservative to step into state government and live within our means.”
Quinn said failing to pass an income tax increase and making the kind of cuts to education that he says would be necessary under Brady’s plan would result in increased property taxes on the local level. “He doesn’t want to tell people what his budget plan is. We know what it is. It’s to wreck education, wreck health care, wreck public safety and harm the people of Illinois.”
Monday, August 16, 2010
"MGT Push" report may spur legislation
By Jamey Dunn
After a scathing report from a panel he appointed to look into the controversial “Meritorious Good Time Push (MGT Push) program,” Gov. Pat Quinn faces renewed prompting to clean up early prison release initiatives.
The Associated Press reported in December that the Illinois Department of Corrections (DoC) was applying “good time” credit to prisoners’ sentences as soon as they began serving them, allowing some to walk free after as few as 11 days. The department previously had a longstanding policy that required prisoners to serve at least 61 days before they could receive discretionary early release credit.
Once the escalated version of the program made news, Quinn put an end to it and asked Judge David Erickson to work with his staff to present recommendations for reform. Quinn said he would not reinstate the longstanding Meritorious Good Time program, with its 61-day waiting period, until changes are put in place. “I have suspended all of the meritorious good time until everything is corrected along the lines of what the judge has recommended,” Quinn said at a Chicago news conference.
The panel’s report, which charges the DoC with taking a flawed program and making it worse, will likely affect the governor’s race, as well as spur legislation during the General Assembly's November veto session. “These problems at the Department of Corrections are systemic, they’re longstanding, there’s lots of flaws, they need to be corrected. And I’m going to do that,” Quinn said.
The report first lays out all the factors that should be considered in an early release program:
Statutory early-release programs — such as the Illinois program that awards good conduct
credit for meritorious service — represent an effort on the part of the legislative and executive branches to balance a multitude of objectives, including: (1) ensuring that offenders are adequately punished for their offenses; (2) effectively deterring offenders and would-be offenders from committing offenses; (3) respecting the rights of crime victims; (4) incentivizing incarcerated offenders toward good conduct in prison and rehabilitation; and (5) enabling prison officials to manage inmate populations by addressing legal, operational, and financial concerns associated with prison overcrowding.
It then goes on to describe how the “MGT Push” plan was only geared toward saving money and failed to address some of the most important considerations associated with early release. “The MGT Push program was a mistake. Although focused on reducing costs during a fiscal crisis, it failed to accomplish the overriding goals of the State’s Code of Corrections: protecting the public’s safety and restoring inmates to useful citizenship.”
“MGT Push” resulted in 1,745 inmates being released before the usual 61 days. On average, they served 36 fewer days than they would have under 61-day policy. The DoC estimated that “MGT Push” could save $3.4 million annually.
The report made several recommendations:
Quinn said he wants to direct capital funding to a new DoC computer system and accuses Brady of blocking such efforts. Quinn blamed the aging computer system when the Associated Press uncovered documents showing the state had lost track of more than 50 parolees who were let out of prison early under “MGT Push.”
Brady spokesperson Patty Schuh said Quinn has the power to fund such a project without legislative approval. “He has more money in discretionary (capital) funding than any governor in the history of the state of Illinois and has more (budgeting) power than any governor in the history of Illinois.” Schuh said it was irresponsible of Quinn to release inmates early if he knew the computer system was out of date.
Senate Minority Leader Christine Radogno, a Lemont Republican, released a statement saying that Quinn never proposed upgrades to the DoC computers during negotiations with legislative leaders over a capital spending bill. "To suggest that legislators of either party have somehow prevented him from upgrading the prisoner tracking system at the Department of Corrections is just not true.”
Brady has also renewed calls for Quinn to fire Randle, who Quinn said released violent offenders early without his knowledge.
Quinn acknowledged that he considered letting Randle go but has decided that he is the best choice to spearhead the new reforms. “The man made a mistake. He is a nationally recognized expert, and he’s done a number of good things with respect to running our prisons. This is not any easy job.”
After a scathing report from a panel he appointed to look into the controversial “Meritorious Good Time Push (MGT Push) program,” Gov. Pat Quinn faces renewed prompting to clean up early prison release initiatives.
The Associated Press reported in December that the Illinois Department of Corrections (DoC) was applying “good time” credit to prisoners’ sentences as soon as they began serving them, allowing some to walk free after as few as 11 days. The department previously had a longstanding policy that required prisoners to serve at least 61 days before they could receive discretionary early release credit.
Once the escalated version of the program made news, Quinn put an end to it and asked Judge David Erickson to work with his staff to present recommendations for reform. Quinn said he would not reinstate the longstanding Meritorious Good Time program, with its 61-day waiting period, until changes are put in place. “I have suspended all of the meritorious good time until everything is corrected along the lines of what the judge has recommended,” Quinn said at a Chicago news conference.
The panel’s report, which charges the DoC with taking a flawed program and making it worse, will likely affect the governor’s race, as well as spur legislation during the General Assembly's November veto session. “These problems at the Department of Corrections are systemic, they’re longstanding, there’s lots of flaws, they need to be corrected. And I’m going to do that,” Quinn said.
The report first lays out all the factors that should be considered in an early release program:
Statutory early-release programs — such as the Illinois program that awards good conduct
credit for meritorious service — represent an effort on the part of the legislative and executive branches to balance a multitude of objectives, including: (1) ensuring that offenders are adequately punished for their offenses; (2) effectively deterring offenders and would-be offenders from committing offenses; (3) respecting the rights of crime victims; (4) incentivizing incarcerated offenders toward good conduct in prison and rehabilitation; and (5) enabling prison officials to manage inmate populations by addressing legal, operational, and financial concerns associated with prison overcrowding.
It then goes on to describe how the “MGT Push” plan was only geared toward saving money and failed to address some of the most important considerations associated with early release. “The MGT Push program was a mistake. Although focused on reducing costs during a fiscal crisis, it failed to accomplish the overriding goals of the State’s Code of Corrections: protecting the public’s safety and restoring inmates to useful citizenship.”
“MGT Push” resulted in 1,745 inmates being released before the usual 61 days. On average, they served 36 fewer days than they would have under 61-day policy. The DoC estimated that “MGT Push” could save $3.4 million annually.
The report made several recommendations:
- The legislature should give the DoC the power to revoke “Meritorious Good Time” credit, so it would become a stronger incentive for good behavior. If a prisoner caused problems, the DoC could reduce or take away his or her early release time.
- The legislature should further restrict which offenses make a prisoner ineligible for good time credit.
- Prisoners should have more access to education and rehabilitation programs that “facilitate their reentry into society and restore them to useful citizenship.”
- The DoC should create a consistent method to award good prisoners credit for their sentences and determine what education and reentry help they need.
- The DoC should release an annual report on the program and streamline communication with local law enforcement jurisdictions to more easily notify them of early releases and get information about prisoners.
- The DoC should update its computer and database system.
Quinn said he wants to direct capital funding to a new DoC computer system and accuses Brady of blocking such efforts. Quinn blamed the aging computer system when the Associated Press uncovered documents showing the state had lost track of more than 50 parolees who were let out of prison early under “MGT Push.”
Brady spokesperson Patty Schuh said Quinn has the power to fund such a project without legislative approval. “He has more money in discretionary (capital) funding than any governor in the history of the state of Illinois and has more (budgeting) power than any governor in the history of Illinois.” Schuh said it was irresponsible of Quinn to release inmates early if he knew the computer system was out of date.
Senate Minority Leader Christine Radogno, a Lemont Republican, released a statement saying that Quinn never proposed upgrades to the DoC computers during negotiations with legislative leaders over a capital spending bill. "To suggest that legislators of either party have somehow prevented him from upgrading the prisoner tracking system at the Department of Corrections is just not true.”
Brady has also renewed calls for Quinn to fire Randle, who Quinn said released violent offenders early without his knowledge.
Quinn acknowledged that he considered letting Randle go but has decided that he is the best choice to spearhead the new reforms. “The man made a mistake. He is a nationally recognized expert, and he’s done a number of good things with respect to running our prisons. This is not any easy job.”
Subscribe to:
Posts (Atom)
Posts
