By Jamey Dunn
Gov. Pat Quinn today signed a tax break for low-income workers and said changes to the public employee pension systems are a top priority for him in 2012.
Quinn signed Senate Bill 400, which will increase the Earned Income Tax Credit (EITC) from 5 percent to 10 percent of the federal credit over two years. The increase will start for tax year 2012, moving it up to 7.5 percent of the federal credit, so it will not apply in the coming months as Illinoisans are filing their 2011 income tax returns.
According to Quinn about 935,000 households will benefit from the credit. He said a single mother earning $12,800 a year would save about $150 on her taxes, and a family of five with a household income of $30,000 would save about $199 this year. “It’s very important here in Illinois that we help parents raising children, parents who are working, and they are working hard and they are living from check to check every month. We want to make sure that those paychecks have enough money for the family to pay its bills and raise their children right. So that’s really our mission in Illinois, to help everyday people raising children living form paycheck to paycheck,” Quinn said today at a bill signing event.
Supporters of the increase argue that it will also help to spur local economies. “That family is not going to admire money in a bank vault, especially now. They are going to go out and spend the money in their local economy, creating jobs for local businesses in particular,” Quinn said. “There are some who think that the Earned Income Tax Credit and tax relief for working families is not part of job creation, and they’re just plain wrong.”
Rhonda Jones, a single mother who has three children in college and two more in high school, said she has often spent money from the EITC on necessities, such as car repair, children’s clothes or food. “The Earned Income Tax Credit has helped me out of a lot of jams when I have found it hard to make ends meet,” she said at today’s bill signing.
The new law also increases the $2,000 personal tax exemption by $50 and links it to federal inflation. Sponsor Sen. Toi Hutchinson said if the exemption had been indexed to inflation when the income tax was first created, the exemption would be more than $6,000 today. “That would be $24,000 for a family of four that would be untaxed — $24,000 off the top — had they been a little more progressive when they instituted the income tax in the beginning,” Hutchinson said. “Because we didn’t think that far, we’re doing it today. So, yes, it can seem insignificant right now; the point is indexing so that it keeps up with the times.”
Some Republicans traditionally opposed to new spending supported the EITC increase.
“This is an opportunity to help people grab the bottom lung of the ladder, to start to get away from the dependency of welfare and get to work,” Sen. Matt Murphy of Palatine said during floor debate of the plan This is a reasonable piece of tax relief for most who get that tax credit. It’ something that I’d like to see—on both sided of the aisle—us support because it is the right thing to do.” .
But opponents of the credit, which was part of a package that also offered tax breaks to businesses threatening to leave the state, said Illinois cannot afford to hand out tax cuts. Quinn signed the corporate tax break bill late last year. The overall package is expected to cost about $300 million next fiscal year and $350 million in fiscal year 2014. According to Quinn’s budget office, the bill he signed today will cost $55 million in FY 2013 and $105 million in FY 2014.
“Where will the money come from when we have $8 billion in unpaid bills, we have debt, our credit score is going down the tubes, we’re listed as the 48th worst-run state in the union? Where will the money come from?” asked Sen. Chris Lauzen, an Aurora Republican. Quinn’s own budget analysis shows that the state ending the current fiscal year with a $507 million deficit, and Moody’s Investor Services downgraded the state’s credit rating to the worst in the nation last week. Two other rating agencies did not downgrade Illinois but gave firm warnings about the possibility of future downgrades.
Quinn defended the cost of the credit today. “We can certainly afford this. It think we can’t afford not to do this. … I really think the EITC more than pays for itself in terms of economic growth and jobs.”
However, he added, “It is important that we take this year, 2012, and do some hard things when it comes to the finances for Illinois, and that begins with pension reform.”
Quinn said he is willing to touch the third rail of pension reform, benefits for workers who were hired before benefit changes that went into effect last year. “Now we have to address the issues of our current employees but do it in a way that’s constitutional and fair and definitely something that involves everybody.”
Union officials maintain that changes to employee benefits hired before the pension revamp would be unconstitutional. Senate President John Cullerton has also questioned the constitutionality of such proposals.
Quinn said he wants to address growing pension costs to free up revenue for spending on education, public safety and health care. “This is a major mountain to climb this year, and I’m willing to lead the expedition,” Quinn said. “We’re going to get this done once and for all. ... For 30 years, three decades, governors and legislatures didn’t do enough. They let it go. It’s time now to tighten up and get it done.”
He has formed working groups to take on the issue and wants to hear from all stakeholders involved. Quinn refused to comment on what specific changes he would support. “I think it’s important not to say what we’re going to do until everybody has a chance to speak.”
Showing posts with label budget deficit. Show all posts
Showing posts with label budget deficit. Show all posts
Tuesday, January 10, 2012
Wednesday, January 12, 2011
Legislators pass a tax increase in the final hours of session
By Jamey Dunn with Lauren Johnson contributing
Illinois lawmakers passed an income tax increase before adjourning their two-year legislative session but failed to approve other pieces of a budget plan intended to quickly pay down the state’s backlog of bills and funnel new funding to education.
Chicago Democratic Rep. Barbara Flynn Currie said the time to point fingers about the deficit has passed. “Illinois is in crisis — absolute financial crisis — and there is no way we can dig ourselves out of the crisis without enhanced revenues.”
Currie, sponsor of Senate Bill 2505 added: “This mess is a mess that is the responsibility of all of us. … It’s too late. It’s time for us to be adults, face the crisis and figure out together a solution.”
However, Rep. Roger Eddy, a Hutsonville Republican, said that GOP calls for spending cuts have been ignored for years. “The time to be adults was eight years ago, when we were expanding programs,” he said.
Currie said that without the tax increase, lawmakers would have to make “wholesale” cuts to state government.
Speaker Mike Madigan has vowed on multiple occasions that an income tax increase would not pass in the House without Republican support, but in the end, that is what happened. Senate Bill 2505 passed with the 60 required “yes” votes to 57 opposition votes.
“They're on the sidelines. They don't want to get on the field of play,” Madigan said about Republicans after the vote.
The personal income tax would increase from 3 percent to 5 percent, and the corporate tax would go from 4.8 percent to 7 percent. Under the legislation, both rates would drop after four years, to 3.75 percent for personal income tax and to 5.25 percent for the corporate income tax. The plan is expected to bring in roughly $6.5 billion in its first year.
Currie estimated that a family of four with an income of $40,000 would pay roughly $800 more a year under the initial increase.
The measure also includes spending caps for the next four fiscal years. The limits would be $36.8 billion in Fiscal Year 2012, $37.5 billion in FY 2013, $38.3 billion in FY 2014 and $39.1 billion in FY 2015. If the legislators spend more, the tax increases would be nullified. It would be up to the Illinois auditor general to determine if the state has overspent. House Democrats described that provision as the “hammer” that will keep future budgeting in line. Both legislative chambers changed their rules to require a three-fifths vote on any legislation that increases the spending limits.
Democrats described those spending increases as lower than the rate of inflation. However, Republicans took issue with the Democrats' initial numbers, on which the structure is based.
Sen. Dale Righter, a Mattoon Republican, called the caps an “ill-fitting theater costume” used to dress up a tax increase to make it seem fiscally responsible.
House Minority Leader Tom Cross said he could not support locking in any increase to the future budget. He said Democrats should work with Republicans to find an appropriate spending level and stick to it while the state tries to make its way out of its budget hole. “Whatever that is, you need to stabilize that number — and that’s the point — instead of growing the number.”
Senate President John Cullerton said that without the tax increase, the future of Illinois and those waiting on state payments, such as human service providers, would be dire. “If we don’t do this … the people who would be waiting to be paid would wait for years to be paid, if they even continue to do business with us.”
Republican Sen. Matt Murphy of Palatine said legislators who voted for the tax increase could no longer claim that job creation is their top priority. “Your number one priority is supporting state spending at or above the current level. … because there is no question there will be job loss with this tax increase.”
However, Sen. Dan Kotowski, a Park Ridge Democrat, said failing to approve new revenue to properly fund the state budget would result in the loss of hundreds of thousands of jobs.
The Senate approved nearly $4 billion in borrowing — to be paid off over eight years — to cover the required payment to public employee pension systems for this fiscal year.
Righter questioned why Illinois needed to borrow after raising the income tax. Cullerton said borrowing was necessary so the state could afford to make the pension payment for this fiscal year. “The money that we raised with the income tax is going to start paying the pension payment for the next fiscal year.”
He added that the General Assembly also extended the emergency budget powers given to Gov. Pat Quinn as part of last spring’s budget bill. Those powers — originally granted for six months but now extended through June 30, the end of the current fiscal year — allowed Quinn to make cuts and allocate lump-sum appropriations the General Assembly sent him in lieu of a line-item budget.
“This bill effectively, for budget purposes, crowns the governor king,” Murphy said.
Currie removed from the bill a “property tax relief” provision that would have provided equal annual rebate checks to property tax payers across Illinois. Republicans complained that it was unfair to give someone who pays a higher level of property taxes the same amount of relief as someone who pays less. Cullerton estimated that the checks for next year would have been about $325.
Two other components to the overall proposed plan failed to clear the House.
Lawmakers in that chamber shot down a $1-a-pack cigarette tax that would have brought in an estimated $370 million for education. That caused a temporary hitch for the income tax increase in the Senate, where some Democrats were disappointed with the lack of new education funds.
Maywood Democratic Sen. Kimberly Lightford said those with concerns, including members of the Senate Black Caucus, we’re promised that the $250 million in revenues that will no longer be needed for property tax relief will go toward education.
She said after the potential revenue sources of the cigarette tax increase and a proposed gaming expansion failed to get support, “we felt like the commitment for education funding was not there.” Lightford said members of her caucus called on Democratic leadership and Gov. Pat Quinn to find money for schools. “You didn’t pass a cigarette tax; didn’t call gaming. You need to put that 250 to education,” she said.
Lightford said $250 million a year for the first four years of the tax increase would go into a fund that would specifically target underperforming schools. Quinn later said of the deal: “Many [of the Black Caucus members] are my friends, and we worked together in campaigns. We believe in working together on important things that help children.”
A plan to borrow $8.75 billion to pay down the state’s backlog of unpaid bills for this fiscal year also failed to get the 71 votes it needed to pass. The loan would have been repaid over 14 years. Spring Valley Democratic Rep. Frank Mautino, sponsor of SB 336, said if the measure had passed, the state could have started to send out checks to schools, providers and vendors in March.
Cross said he is still willing to negotiate with Democrats on a borrowing plan to pay off the bills but said it would have to be smaller and come in tandem with cuts and reforms, such as changes to workers’ compensation. The workers compensation efforts in the lame-duck legislative session fell short, but Cullerton called the issue a “top priority” for the new session, which begins later today.
Gaming expansion and medical marijuana measures that came up for votes in the waning days of the two-year session both died upon adjournment, along with the borrowing plan, workers’ compensation reform and the cigarette tax increase.
Illinois lawmakers passed an income tax increase before adjourning their two-year legislative session but failed to approve other pieces of a budget plan intended to quickly pay down the state’s backlog of bills and funnel new funding to education.
Chicago Democratic Rep. Barbara Flynn Currie said the time to point fingers about the deficit has passed. “Illinois is in crisis — absolute financial crisis — and there is no way we can dig ourselves out of the crisis without enhanced revenues.”
Currie, sponsor of Senate Bill 2505 added: “This mess is a mess that is the responsibility of all of us. … It’s too late. It’s time for us to be adults, face the crisis and figure out together a solution.”
However, Rep. Roger Eddy, a Hutsonville Republican, said that GOP calls for spending cuts have been ignored for years. “The time to be adults was eight years ago, when we were expanding programs,” he said.
Currie said that without the tax increase, lawmakers would have to make “wholesale” cuts to state government.
Speaker Mike Madigan has vowed on multiple occasions that an income tax increase would not pass in the House without Republican support, but in the end, that is what happened. Senate Bill 2505 passed with the 60 required “yes” votes to 57 opposition votes.
“They're on the sidelines. They don't want to get on the field of play,” Madigan said about Republicans after the vote.
The personal income tax would increase from 3 percent to 5 percent, and the corporate tax would go from 4.8 percent to 7 percent. Under the legislation, both rates would drop after four years, to 3.75 percent for personal income tax and to 5.25 percent for the corporate income tax. The plan is expected to bring in roughly $6.5 billion in its first year.
Currie estimated that a family of four with an income of $40,000 would pay roughly $800 more a year under the initial increase.
The measure also includes spending caps for the next four fiscal years. The limits would be $36.8 billion in Fiscal Year 2012, $37.5 billion in FY 2013, $38.3 billion in FY 2014 and $39.1 billion in FY 2015. If the legislators spend more, the tax increases would be nullified. It would be up to the Illinois auditor general to determine if the state has overspent. House Democrats described that provision as the “hammer” that will keep future budgeting in line. Both legislative chambers changed their rules to require a three-fifths vote on any legislation that increases the spending limits.
Democrats described those spending increases as lower than the rate of inflation. However, Republicans took issue with the Democrats' initial numbers, on which the structure is based.
Sen. Dale Righter, a Mattoon Republican, called the caps an “ill-fitting theater costume” used to dress up a tax increase to make it seem fiscally responsible.
House Minority Leader Tom Cross said he could not support locking in any increase to the future budget. He said Democrats should work with Republicans to find an appropriate spending level and stick to it while the state tries to make its way out of its budget hole. “Whatever that is, you need to stabilize that number — and that’s the point — instead of growing the number.”
Senate President John Cullerton said that without the tax increase, the future of Illinois and those waiting on state payments, such as human service providers, would be dire. “If we don’t do this … the people who would be waiting to be paid would wait for years to be paid, if they even continue to do business with us.”
Republican Sen. Matt Murphy of Palatine said legislators who voted for the tax increase could no longer claim that job creation is their top priority. “Your number one priority is supporting state spending at or above the current level. … because there is no question there will be job loss with this tax increase.”
However, Sen. Dan Kotowski, a Park Ridge Democrat, said failing to approve new revenue to properly fund the state budget would result in the loss of hundreds of thousands of jobs.
The Senate approved nearly $4 billion in borrowing — to be paid off over eight years — to cover the required payment to public employee pension systems for this fiscal year.
Righter questioned why Illinois needed to borrow after raising the income tax. Cullerton said borrowing was necessary so the state could afford to make the pension payment for this fiscal year. “The money that we raised with the income tax is going to start paying the pension payment for the next fiscal year.”
He added that the General Assembly also extended the emergency budget powers given to Gov. Pat Quinn as part of last spring’s budget bill. Those powers — originally granted for six months but now extended through June 30, the end of the current fiscal year — allowed Quinn to make cuts and allocate lump-sum appropriations the General Assembly sent him in lieu of a line-item budget.
“This bill effectively, for budget purposes, crowns the governor king,” Murphy said.
Currie removed from the bill a “property tax relief” provision that would have provided equal annual rebate checks to property tax payers across Illinois. Republicans complained that it was unfair to give someone who pays a higher level of property taxes the same amount of relief as someone who pays less. Cullerton estimated that the checks for next year would have been about $325.
Two other components to the overall proposed plan failed to clear the House.
Lawmakers in that chamber shot down a $1-a-pack cigarette tax that would have brought in an estimated $370 million for education. That caused a temporary hitch for the income tax increase in the Senate, where some Democrats were disappointed with the lack of new education funds.
Maywood Democratic Sen. Kimberly Lightford said those with concerns, including members of the Senate Black Caucus, we’re promised that the $250 million in revenues that will no longer be needed for property tax relief will go toward education.
She said after the potential revenue sources of the cigarette tax increase and a proposed gaming expansion failed to get support, “we felt like the commitment for education funding was not there.” Lightford said members of her caucus called on Democratic leadership and Gov. Pat Quinn to find money for schools. “You didn’t pass a cigarette tax; didn’t call gaming. You need to put that 250 to education,” she said.
Lightford said $250 million a year for the first four years of the tax increase would go into a fund that would specifically target underperforming schools. Quinn later said of the deal: “Many [of the Black Caucus members] are my friends, and we worked together in campaigns. We believe in working together on important things that help children.”
A plan to borrow $8.75 billion to pay down the state’s backlog of unpaid bills for this fiscal year also failed to get the 71 votes it needed to pass. The loan would have been repaid over 14 years. Spring Valley Democratic Rep. Frank Mautino, sponsor of SB 336, said if the measure had passed, the state could have started to send out checks to schools, providers and vendors in March.
Cross said he is still willing to negotiate with Democrats on a borrowing plan to pay off the bills but said it would have to be smaller and come in tandem with cuts and reforms, such as changes to workers’ compensation. The workers compensation efforts in the lame-duck legislative session fell short, but Cullerton called the issue a “top priority” for the new session, which begins later today.
Gaming expansion and medical marijuana measures that came up for votes in the waning days of the two-year session both died upon adjournment, along with the borrowing plan, workers’ compensation reform and the cigarette tax increase.
Tuesday, January 04, 2011
Death penalty opponents renew push for abolition
By Lauren Johnson
Those in favor of abolishing the death penalty believe they have enough support to make another push during the lame-duck session.
Former Gov. George Ryan declared a moratorium on capital punishment in 2000 after more than a dozen inmates on death row were exonerated. While courts continue to hand out death sentences, Illinois is not currently executing prisoners.
Senate Bill 3539 would permanently abolish the death penalty. It would also require money from the capital litigation fund, which is used to aid defendants in building their cases when prosecutors seek the death penalty, to be spent on support for homicide victim’s families and for additional police training.
A House committee approved the measure in November(scroll down), but supporters said it lacked the votes needed to pass. After having more time to lobby lawmakers, they now think the support exists to pass the bill through both chambers.
Proponents of the bill argue that the cash-strapped state is spending millions of dollars on what have been empty death sentences for the past 10 years. They say as long as the governor has the power to reinstate the death penalty, Illinois runs the risk of executing of the innocent.
“People who are in opposition to the death penalty want [Illinois] to catch us to the civilized world,” said Sen. Kwame Raoul, the bill’s sponsor. He said the debate needs to be confronted head on because the “imperfect” system, which will always be subject to human error, has seen a number of people exonerated from death row because of mistakes.
“The moratorium is just an artificial hold that can be removed with the decision of one individual,” said Raoul. The senator added, “To the extent it could lead to somebody who’s innocent being put to death under state sanction, I don’t think we can continue to support something like that.”
Some states, most recently New Jersey and New Mexico, have already abolished the death penalty. Opponents continue attempts to block the bill from being called for a vote during the lame-duck session. They argue it is being rushed without properly considering the voices of Illinois citizens.
Prosecutors and families of murder victims who oppose abolition of the death penalty say the issue is not a matter of funding but one of county officials and homicide victim’s families seeking justice in Illinois.
Assistant DuPage County State's Attorney Alex McGimpsey said the legislature should consider critical reforms, such as mandatory recording of murder suspects’ confessions, before eliminating the death penalty as an option.
“There are cases, yes, I agree, that people need to spend life in prison. There are other cases that life in prison is not enough punishment. This is one of those cases, and I pray to God that [the legislature] never abolish the death penalty in the state of Illinois,” said Bill Sloop, whose two daughters, Rachel and Lonna, were murdered. The convicted killer, Daniel Ramsey, is on death row.
The measure awaits a floor vote in the House. If it does not pass in the coming days SB 3539, would not be viable in the new legislative session, which begins next Wednesday.
Those in favor of abolishing the death penalty believe they have enough support to make another push during the lame-duck session.
Former Gov. George Ryan declared a moratorium on capital punishment in 2000 after more than a dozen inmates on death row were exonerated. While courts continue to hand out death sentences, Illinois is not currently executing prisoners.
Senate Bill 3539 would permanently abolish the death penalty. It would also require money from the capital litigation fund, which is used to aid defendants in building their cases when prosecutors seek the death penalty, to be spent on support for homicide victim’s families and for additional police training.
A House committee approved the measure in November(scroll down), but supporters said it lacked the votes needed to pass. After having more time to lobby lawmakers, they now think the support exists to pass the bill through both chambers.
Proponents of the bill argue that the cash-strapped state is spending millions of dollars on what have been empty death sentences for the past 10 years. They say as long as the governor has the power to reinstate the death penalty, Illinois runs the risk of executing of the innocent.
“People who are in opposition to the death penalty want [Illinois] to catch us to the civilized world,” said Sen. Kwame Raoul, the bill’s sponsor. He said the debate needs to be confronted head on because the “imperfect” system, which will always be subject to human error, has seen a number of people exonerated from death row because of mistakes.
“The moratorium is just an artificial hold that can be removed with the decision of one individual,” said Raoul. The senator added, “To the extent it could lead to somebody who’s innocent being put to death under state sanction, I don’t think we can continue to support something like that.”
Some states, most recently New Jersey and New Mexico, have already abolished the death penalty. Opponents continue attempts to block the bill from being called for a vote during the lame-duck session. They argue it is being rushed without properly considering the voices of Illinois citizens.
Prosecutors and families of murder victims who oppose abolition of the death penalty say the issue is not a matter of funding but one of county officials and homicide victim’s families seeking justice in Illinois.
Assistant DuPage County State's Attorney Alex McGimpsey said the legislature should consider critical reforms, such as mandatory recording of murder suspects’ confessions, before eliminating the death penalty as an option.
“There are cases, yes, I agree, that people need to spend life in prison. There are other cases that life in prison is not enough punishment. This is one of those cases, and I pray to God that [the legislature] never abolish the death penalty in the state of Illinois,” said Bill Sloop, whose two daughters, Rachel and Lonna, were murdered. The convicted killer, Daniel Ramsey, is on death row.
The measure awaits a floor vote in the House. If it does not pass in the coming days SB 3539, would not be viable in the new legislative session, which begins next Wednesday.
Wednesday, December 08, 2010
State will pay off FY2010 bills by end of December - updated
By Jamey Dunn
UPDATE: Gov Pat Quinn confirmed Thursday that the state will pay off its fiscal year 2010 bills by the end of the month, largely through the sale of bonds against the state's tobacco settlement money.
Quinn said the backlog for FY2010 is about $1.4 billion and that service providers and vendors should expect payments soon. “They’ll get their money by the end of this year. Probably in the next week or so," he told reporters in Chicago.
Quinn also emphasized the importance of working on budget solutions when the legislature returns in January. “We also have to pay [FY2011] and beyond — [FY2012], [FY2013] and you name it. So we have to have a plan in Illinois that gets us back on sure footing when it comes to our finances, and that’s what I’m working on now with legislators of both parties.”
Illinois will make the deadline for paying off its bills by the end of this month. A new survey indicates, however, that the slow payment schedule, coupled with budget cuts, has hurt social service providers.
According to Alan Henry, director of communications for Comptroller Dan Hynes, the state will pay off all of its overdue bills from fiscal year 2010 — which ended June 30 — by the end of this month. Legislators moved the cutoff date for payments from August 31 to December as part of the budget plan passed in May.
The state prioritized paying off last year’s bills before paying for costs incurred in FY 2011. Illinois also sold $1.5 billion in bonds against the state’s money from a court settlement with tobacco companies and brought in $546 million from the tax amnesty period. Hynes warned in his quarterly report released in October that the state would have to get at least $1.2 billion from the tobacco money and $200 million from deadbeat taxpayers to make the end-of-the-year deadline.
But the results of a survey from the Illinois Partners for Human Services, a lobbying coalition that represents social service providers throughout Illinois, show that the state’s financial crisis has already taken a toll.
The group surveyed more than 200 Illinois social service providers. More than 70 percent of respondents said their efforts were affected by the late payments, with more than half cutting hours of operation or levels of services. More than 40 percent saw increased waiting lists, and more than one quarter turned clients away and/or closed programs. More than a quarter saw no changes to their services.
More than half of the organizations upped their fundraising efforts. Nearly half sought credit, and nearly half cut staff.
The report describes the compounded problem of staff cuts and an increased need for remaining staff to try to find money where they can:
Sixty percent of responding organizations sought additional funding sources, often requiring program staff to refocus efforts away from service provision. Combined with the 49% that laid off employees, these organizations are severely hampered by both direct cuts and service reductions, as well as reallocating staff to non-service specific functions.
UPDATE: Gov Pat Quinn confirmed Thursday that the state will pay off its fiscal year 2010 bills by the end of the month, largely through the sale of bonds against the state's tobacco settlement money.
Quinn said the backlog for FY2010 is about $1.4 billion and that service providers and vendors should expect payments soon. “They’ll get their money by the end of this year. Probably in the next week or so," he told reporters in Chicago.
Quinn also emphasized the importance of working on budget solutions when the legislature returns in January. “We also have to pay [FY2011] and beyond — [FY2012], [FY2013] and you name it. So we have to have a plan in Illinois that gets us back on sure footing when it comes to our finances, and that’s what I’m working on now with legislators of both parties.”
Illinois will make the deadline for paying off its bills by the end of this month. A new survey indicates, however, that the slow payment schedule, coupled with budget cuts, has hurt social service providers.
According to Alan Henry, director of communications for Comptroller Dan Hynes, the state will pay off all of its overdue bills from fiscal year 2010 — which ended June 30 — by the end of this month. Legislators moved the cutoff date for payments from August 31 to December as part of the budget plan passed in May.
The state prioritized paying off last year’s bills before paying for costs incurred in FY 2011. Illinois also sold $1.5 billion in bonds against the state’s money from a court settlement with tobacco companies and brought in $546 million from the tax amnesty period. Hynes warned in his quarterly report released in October that the state would have to get at least $1.2 billion from the tobacco money and $200 million from deadbeat taxpayers to make the end-of-the-year deadline.
But the results of a survey from the Illinois Partners for Human Services, a lobbying coalition that represents social service providers throughout Illinois, show that the state’s financial crisis has already taken a toll.
The group surveyed more than 200 Illinois social service providers. More than 70 percent of respondents said their efforts were affected by the late payments, with more than half cutting hours of operation or levels of services. More than 40 percent saw increased waiting lists, and more than one quarter turned clients away and/or closed programs. More than a quarter saw no changes to their services.
More than half of the organizations upped their fundraising efforts. Nearly half sought credit, and nearly half cut staff.
The report describes the compounded problem of staff cuts and an increased need for remaining staff to try to find money where they can:
Sixty percent of responding organizations sought additional funding sources, often requiring program staff to refocus efforts away from service provision. Combined with the 49% that laid off employees, these organizations are severely hampered by both direct cuts and service reductions, as well as reallocating staff to non-service specific functions.
Thursday, November 11, 2010
Substance abuse programs see late payments increase by $12 million
By Jamey Dunn
The amount of overdue payments the state owes to providers of substance abuse prevention and treatment programs increased by $12 million in the span of a month.
According to the Illinois Alcoholism and Drug Dependence Association (IADDA), the state owed $34 million at the beginning of October, and it now owes $46 million — in some cases, on bills that are seven months overdue.
Sarah Howe, spokesperson for the IADDA, said providers throughout the state are in danger of soon being unable to pay employees. “The next payroll out, the one after that, they are potentially going to have to miss it.”
Howe said that many providers have stopped offering essential services, such as detox programs, sending individuals seeking help to local emergency rooms. She said specialized substance abuse treatment providers are more equipped to handle such procedures, and sending those in need to hospitals costs taxpayers more and clogs up emergency medical treatment facilities. “I cannot think of a provider that hasn’t had to do something as far as curtailing services,” Howe said.
She added that residents whose lives are not touched by addiction might not realize how much of an impact the state’s late payments have on treatment providers because treatment centers in their area may still be open.
However, Howe said they have likely cut offerings, such as residential care, and are running long waiting lists for treatment. ‘When someone comes and says they are ready for treatment today, you need to take them today. … When you have those moments, you really want to seize upon them.”
Instead, Howe said, “[getting inpatient treatment] could take six to eight weeks. That’s a whole different ball game.”
Howe added, “You may be driving by a provider that still has the lights on, but what’s behind that front door is less than what was there a year or two years ago.”
The amount of overdue payments the state owes to providers of substance abuse prevention and treatment programs increased by $12 million in the span of a month.
According to the Illinois Alcoholism and Drug Dependence Association (IADDA), the state owed $34 million at the beginning of October, and it now owes $46 million — in some cases, on bills that are seven months overdue.
Sarah Howe, spokesperson for the IADDA, said providers throughout the state are in danger of soon being unable to pay employees. “The next payroll out, the one after that, they are potentially going to have to miss it.”
Howe said that many providers have stopped offering essential services, such as detox programs, sending individuals seeking help to local emergency rooms. She said specialized substance abuse treatment providers are more equipped to handle such procedures, and sending those in need to hospitals costs taxpayers more and clogs up emergency medical treatment facilities. “I cannot think of a provider that hasn’t had to do something as far as curtailing services,” Howe said.
She added that residents whose lives are not touched by addiction might not realize how much of an impact the state’s late payments have on treatment providers because treatment centers in their area may still be open.
However, Howe said they have likely cut offerings, such as residential care, and are running long waiting lists for treatment. ‘When someone comes and says they are ready for treatment today, you need to take them today. … When you have those moments, you really want to seize upon them.”
Instead, Howe said, “[getting inpatient treatment] could take six to eight weeks. That’s a whole different ball game.”
Howe added, “You may be driving by a provider that still has the lights on, but what’s behind that front door is less than what was there a year or two years ago.”
Wednesday, October 06, 2010
Public wants officials to act on budget crises
By Jamey Dunn
A study of five states facing dire budget and economic problems found that most residents would tolerate a tax increase to fund certain services, but in many cases, their expectations and understanding of states' budgets were unrealistic.
The Pew Center on the States and the Public Policy Institute of California asked residents in Arizona, California, Florida, Illinois and New York about their states’ budgets. Each state had at least 1,000 respondents to the survey. The margin of error was plus or minus 4 percent.
The study found some common themes across all states. People are beginning to feel a sense of urgency and would like to see their state governments change they way they craft budgets — Illinois more so than any other state. Eighty-six percent of Illinois respondents felt change is needed immediately.
From the report: “Majorities in all locations believe major changes are needed in their state’s budget process — and they overwhelmingly think their elected leaders should take action now, rather than wait until the economy improves.” Respondents were more concerned with the effectiveness and efficiency of government than its size.
While taxes were not the preferred means to close budget gaps, the majority of those surveyed said they would tolerate a tax increase to protect K-12 education, health care and human services from cuts. However, they would prefer targeted tax increases instead of an across-the-board income tax hike. People favored increased taxes on cigarettes, alcohol, gambling, corporations and the incomes of the wealthy.
Participants in all five states were averse to borrowing, seeing it as pushing problems further into the future. They also expressed distrust in government and a desire to see a better return on their tax dollars.
Some of the results were contradictory: “By hefty margins, respondents across the five states say they are very or somewhat concerned about the effects of state spending reductions on government services. Yet they also name spending cuts as their first choice to balance state budgets. Solid majorities believe that a good portion of their state’s budget squeeze can be solved relatively painlessly by reducing waste and inefficiency in government without affecting services.”
Those who said "relatively painless" cuts could be made believed they could amount to 10 to 20 percent reductions in overall spending.
However the authors of the study said states may not be able to bear such cuts without services taking a hit:
“It is a strikingly consistent view, but experts who work closely with state budgets say it may not be realistic, especially given the steep spending reductions many states already have made since the recession started — both fiscal years 2009 and 2010—the first decline in general fund spending for two consecutive years on record. Forty states decreased their general fund expenditures in fiscal year 2010.” The study sites a 6.8 percent decrease in state spending nationwide during fiscal years 2009 and 2010.
According to the study, such contradictions are evident in Illinois: “One of the difficulties for Illinois lawmakers who want to follow public sentiment — such as avoiding debt — is that the public sends mixed signals.
Almost 90 percent of Illinoisans who participated in the survey are concerned about the effect cuts could have on state services. Yet more than 70 percent said their first choice for balancing the budget would be cuts. Almost 20 percent would raise taxes and fees, while only 6 percent would borrow.
However, 70 percent said they would support a tax increase to avoid cuts in K-12 and higher education. Nearly 60 percent would support a tax increase for health care and human services.
More than 60 percent of Illinoisans would support an increase in alcohol, cigarette taxes and corporate taxes, and more than 50 percent would support gambling expansions. Only 26 percent — the highest numbers out of all five states surveyed — said they would support an income tax increase.
The authors of the study point out that those revenue options may not be enough to maintain the services respondents say they value. “These are not major sources of revenue for the state, so even if they were increased, they would not bridge the gap. And there are other obstacles to these options: For instance, increasing income taxes on businesses is complicated.”
Part of the issue may be that respondents did not fully understand the major sources of revenue and spending in the budget. Nearly one fifth of those surveyed thought that transportation makes up the largest area of spending in the state budget, when in reality the three areas they most want to protect — education, health care and human services — are by far the biggest demands on the general revenue fund.
Transportation was the category respondents were least inclined to protect from cuts, perhaps mistakenly believing cuts to that area could lead to large general revenue fund savings.
Mark Baldassare, president and chief executive officer of the Public Policy Institute of California, said respondents might be too quick to discount borrowing because it is a valuable tool for states when economic conditions take an unexpected turn. “Borrowing is a very common part of the way state and local governments operate,” he said. He added that states need to take care not to rack up so much debt during the current crisis that debt service payments eat up large portions of future budgets. Baldassare cited Illinois’ $9.4 billion in borrowing for fiscal year 2010.
The public opposition to borrowing my be due, in part, to participants from all five states wanting to see their elected officials take action and respond to the economic crisis. “[They are saying:] ‘We shouldn’t be waiting for the economy to get better. We should be taking action now,’” Baldassare said.
He added that respondents seem open to being part of the solution when it comes to budget shortfalls. “I think it also shows that people are willing to do their part. … The public would rather not have tax increases, but for the right thing — in this case, education and human services — they are willing to pay and out of their own pockets.”
A study of five states facing dire budget and economic problems found that most residents would tolerate a tax increase to fund certain services, but in many cases, their expectations and understanding of states' budgets were unrealistic.
The Pew Center on the States and the Public Policy Institute of California asked residents in Arizona, California, Florida, Illinois and New York about their states’ budgets. Each state had at least 1,000 respondents to the survey. The margin of error was plus or minus 4 percent.
The study found some common themes across all states. People are beginning to feel a sense of urgency and would like to see their state governments change they way they craft budgets — Illinois more so than any other state. Eighty-six percent of Illinois respondents felt change is needed immediately.
From the report: “Majorities in all locations believe major changes are needed in their state’s budget process — and they overwhelmingly think their elected leaders should take action now, rather than wait until the economy improves.” Respondents were more concerned with the effectiveness and efficiency of government than its size.
While taxes were not the preferred means to close budget gaps, the majority of those surveyed said they would tolerate a tax increase to protect K-12 education, health care and human services from cuts. However, they would prefer targeted tax increases instead of an across-the-board income tax hike. People favored increased taxes on cigarettes, alcohol, gambling, corporations and the incomes of the wealthy.
Participants in all five states were averse to borrowing, seeing it as pushing problems further into the future. They also expressed distrust in government and a desire to see a better return on their tax dollars.
Some of the results were contradictory: “By hefty margins, respondents across the five states say they are very or somewhat concerned about the effects of state spending reductions on government services. Yet they also name spending cuts as their first choice to balance state budgets. Solid majorities believe that a good portion of their state’s budget squeeze can be solved relatively painlessly by reducing waste and inefficiency in government without affecting services.”
Those who said "relatively painless" cuts could be made believed they could amount to 10 to 20 percent reductions in overall spending.
However the authors of the study said states may not be able to bear such cuts without services taking a hit:
“It is a strikingly consistent view, but experts who work closely with state budgets say it may not be realistic, especially given the steep spending reductions many states already have made since the recession started — both fiscal years 2009 and 2010—the first decline in general fund spending for two consecutive years on record. Forty states decreased their general fund expenditures in fiscal year 2010.” The study sites a 6.8 percent decrease in state spending nationwide during fiscal years 2009 and 2010.
According to the study, such contradictions are evident in Illinois: “One of the difficulties for Illinois lawmakers who want to follow public sentiment — such as avoiding debt — is that the public sends mixed signals.
Almost 90 percent of Illinoisans who participated in the survey are concerned about the effect cuts could have on state services. Yet more than 70 percent said their first choice for balancing the budget would be cuts. Almost 20 percent would raise taxes and fees, while only 6 percent would borrow.
However, 70 percent said they would support a tax increase to avoid cuts in K-12 and higher education. Nearly 60 percent would support a tax increase for health care and human services.
More than 60 percent of Illinoisans would support an increase in alcohol, cigarette taxes and corporate taxes, and more than 50 percent would support gambling expansions. Only 26 percent — the highest numbers out of all five states surveyed — said they would support an income tax increase.
The authors of the study point out that those revenue options may not be enough to maintain the services respondents say they value. “These are not major sources of revenue for the state, so even if they were increased, they would not bridge the gap. And there are other obstacles to these options: For instance, increasing income taxes on businesses is complicated.”
Part of the issue may be that respondents did not fully understand the major sources of revenue and spending in the budget. Nearly one fifth of those surveyed thought that transportation makes up the largest area of spending in the state budget, when in reality the three areas they most want to protect — education, health care and human services — are by far the biggest demands on the general revenue fund.
Transportation was the category respondents were least inclined to protect from cuts, perhaps mistakenly believing cuts to that area could lead to large general revenue fund savings.
Mark Baldassare, president and chief executive officer of the Public Policy Institute of California, said respondents might be too quick to discount borrowing because it is a valuable tool for states when economic conditions take an unexpected turn. “Borrowing is a very common part of the way state and local governments operate,” he said. He added that states need to take care not to rack up so much debt during the current crisis that debt service payments eat up large portions of future budgets. Baldassare cited Illinois’ $9.4 billion in borrowing for fiscal year 2010.
The public opposition to borrowing my be due, in part, to participants from all five states wanting to see their elected officials take action and respond to the economic crisis. “[They are saying:] ‘We shouldn’t be waiting for the economy to get better. We should be taking action now,’” Baldassare said.
He added that respondents seem open to being part of the solution when it comes to budget shortfalls. “I think it also shows that people are willing to do their part. … The public would rather not have tax increases, but for the right thing — in this case, education and human services — they are willing to pay and out of their own pockets.”
Tuesday, February 09, 2010
Public universities looking to borrow
By Jamey Dunn
Some state universities are turning to a plan that would allow them to borrow to fund their operating budgets. The bill was originally written just for Southern Illinois University, and less than a month ago many other public universities said they were not considering the option. But, after trying to budget around millions of dollars in late payments from the state, other universities are looking to jump on to the legislation.
“The members of the Senate from southern Illinois from both parties are in favor of the bill because it provides Southern Illinois University with a mechanism to avoid the damage that closing its doors would cause,” Alton Democrat Sen.William Haine, the sponsor of the bill, said. He said that the plan would not rely on bonding but would instead allow universities to borrow against the money that the state owes them. He likened it to an “emergency” line of credit. The decision to borrow would be left up to each institution’s board of trustees.
Haine pointed out that community colleges already have the power to borrow to fund their budgets. They have property tax revenue to use as collateral for loans.
Haine said that Western Illinois University, Eastern Illinois University and Northern Illinois University have expressed interest in being included in the legislation. “University of Illinois is not on the bill. They’re not against the bill. They’re just ok where they are,” Haine said.
Dave Steelman, director of governmental relations for Western, said the school is considering seeking borrowing power.
“Joining the bill would be done very very reluctantly. We don’t think we should be at this point in the first place,” he said.
Steelman added that universities are concerned that the bill might be seen as a partial solution to the state’s overstretched checkbook, and it could slow down payments to them even more. “We all have horrible mixed feelings about having the bill out there to begin with…There are some legislators that will say, well [universities] can just go and borrow.” However, Steelman said the schools considering the plan are also trying to keep from closing their doors mid-semester.
Calls made to Eastern and Northern to confirm their interest in the plan were not returned. UPDATE: Eastern Illinois University President William Perry confirmed that Eastern is planning to seek borrowing power.
Haine says the bill will be amended to include other schools, and he hopes to get it called for a vote this week.
Meanwhile, university leaders called on the state at a Chicago news conference today to develop a payment schedule for doling out money to higher education—and to stick to it.
“No amount of cutting and sacrifice can make up for the absence of hundreds of millions of dollars in state appropriation payments. Without full funding of our appropriations in a timely manner, we will be forced to take even more drastic actions that will diminish the educational opportunities of our students and our service to the people of Illinois,” a news release from Northern Illinois University and the University of Illinois said. The group sent a letter to Gov. Pat Quinn and Comptroller Dan Hynes asking them to commit to a payment schedule.
“The comptroller’s office would love to pay every bill as it arrives at its door. Unfortunately, revenues are lower than the governor and legislature projected and the state is continuing to spend more money than it takes in…We do our best to balance all the needs with the limited resources that are available. We’ve tried to work with the universities to address payment emergencies as we have with those who provide goods and services across this state who are waiting months and months to be reimbursed,” Hynes spokeswoman Carol Knowles said in an email.
Wednesday, January 13, 2010
State of the state
By Jamey Dunn with Rachel Wells contributing
Governor Pat Quinn gave his State of the State address in front of the General Assembly today. While the speech lasted over an hour and was laced with emotional moments, Quinn did not offer any new ideas or specific policy plans.
Quinn delivered his speech while referring to notes on yellow legal paper, and chose to focus primarily on the positive. He outlined some of what he counted as successes since he became governor, such as the reopening of state historic sites and parks. He also highlighted the passage of a capital construction plan, campaign finance reform, a ban on texting while driving and a recall amendment. Quinn said he would like to see an amendment next to recall on the ballot in November that would allow citizens to petition for ethics reforms through a referendum system. Quinn said that passing the two amendments this year would “complete the job” of ethics reform that was started last session.
Quinn addressed some of the recent controversies that his administrating has faced. He touted the planned sale of Thomson prison to the federal government to house Guantanamo Bay detainees as a patriotic move that would benefit both the state and the feds.
The governor also brought up the “Meritorious Good Time Push” prisoner early release program that landed him in hot water recently. He maintained that he did not know that violent offenders were being included in the plan and that Department of Corrections director Michael Randle made the decisions on whom to let go early. However, Quinn did say that as chief executive officer, the ultimate responsibility was his. He added that the state still needs to consider whether it is cost effective to imprison “low-level nonviolent offenders.”
“The No. 1 issue in Illinois today is getting our economy back on track," Quinn said. However, it was not really the focus of his speech. Quinn did emphasize the need to create jobs, especially in the “green” sector. He once again pledged to build a new veterans home in Chicago, an airport in Peotone and threw his support behind high-speed rail. He also called for a “fair” tax increase that would use exemptions and tax credits to “cut taxes on people who need help the most.”
Quinn ended his speech with a tearful call to action to elected officials, encouraging bipartisan efforts to fix the state’s woes. Quinn said that his late father had told him “to work hard, to treat other people with dignity, don’t call people names, be honest be trustworthy.” He added, “That, to me, is what Illinois is all about. ...We can accomplish great things if we work together.”
The governor’s critics said the speech lacked substance and ignored the state’s dire financial situation. Comptroller Dan Hynes, Quinn’s Democratic opponent for governor, said he thought Quinn’s speech was “heartfelt” but “ a disappointment in a lot of ways because it failed to address the most important issues facing our state — the growing budget crisis, job losses, mounting debt and the fact that our communities are less safe.”
Calling this year’s State of the State address a “feel good … campaign speech,” House Republican Leader Tom Cross said Quinn lacked the specifics on budget cuts and did nothing to assure him that Quinn could actually accomplish his goals.
Cross questioned Quinn’s sincerity when it comes to bipartisanship. He expressed frustration that Quinn failed to meet with the Republican caucus — whose votes are not needed to pass most measures in the House – before his State of the State speech. He likened Quinn to Blagojevich in failing to include the minority party in most discussions.
“(Quinn) is wholly entrenched in the system. The gadfly political outsider has become the ultimate insider working with the speaker of the House and president of the Senate to preserve his power, to preserve his office,” Cross said.
Todd Maisch of the Illinois Chamber of Commerce said the governor needed to be more direct about his plans to help rebuild the state’s economy. “There were no specifics…there was no sense of urgency … what he talked about today sounds fine … but frankly it’s nibbling around the edges of a huge problem,” He said. “When it comes to the central issues that are facing Illinoisans — job losses and a state government that’s bankrupt — there was no take away today.”
State Treasurer Alexi Giannoulias, who is also a Democratic candidate for U.S. Senate, said Quinn is facing some big challenges. “It’s not dissimilar to the situation that President Obama faced when he took office,” said Giannoulias. “I think the one point that (Quinn) did hit on was that the next couple years will be some of the hardest years for state government that we’ve ever seen.”
Governor Pat Quinn gave his State of the State address in front of the General Assembly today. While the speech lasted over an hour and was laced with emotional moments, Quinn did not offer any new ideas or specific policy plans.
Quinn delivered his speech while referring to notes on yellow legal paper, and chose to focus primarily on the positive. He outlined some of what he counted as successes since he became governor, such as the reopening of state historic sites and parks. He also highlighted the passage of a capital construction plan, campaign finance reform, a ban on texting while driving and a recall amendment. Quinn said he would like to see an amendment next to recall on the ballot in November that would allow citizens to petition for ethics reforms through a referendum system. Quinn said that passing the two amendments this year would “complete the job” of ethics reform that was started last session.
Quinn addressed some of the recent controversies that his administrating has faced. He touted the planned sale of Thomson prison to the federal government to house Guantanamo Bay detainees as a patriotic move that would benefit both the state and the feds.
The governor also brought up the “Meritorious Good Time Push” prisoner early release program that landed him in hot water recently. He maintained that he did not know that violent offenders were being included in the plan and that Department of Corrections director Michael Randle made the decisions on whom to let go early. However, Quinn did say that as chief executive officer, the ultimate responsibility was his. He added that the state still needs to consider whether it is cost effective to imprison “low-level nonviolent offenders.”
“The No. 1 issue in Illinois today is getting our economy back on track," Quinn said. However, it was not really the focus of his speech. Quinn did emphasize the need to create jobs, especially in the “green” sector. He once again pledged to build a new veterans home in Chicago, an airport in Peotone and threw his support behind high-speed rail. He also called for a “fair” tax increase that would use exemptions and tax credits to “cut taxes on people who need help the most.”
Quinn ended his speech with a tearful call to action to elected officials, encouraging bipartisan efforts to fix the state’s woes. Quinn said that his late father had told him “to work hard, to treat other people with dignity, don’t call people names, be honest be trustworthy.” He added, “That, to me, is what Illinois is all about. ...We can accomplish great things if we work together.”
The governor’s critics said the speech lacked substance and ignored the state’s dire financial situation. Comptroller Dan Hynes, Quinn’s Democratic opponent for governor, said he thought Quinn’s speech was “heartfelt” but “ a disappointment in a lot of ways because it failed to address the most important issues facing our state — the growing budget crisis, job losses, mounting debt and the fact that our communities are less safe.”
Calling this year’s State of the State address a “feel good … campaign speech,” House Republican Leader Tom Cross said Quinn lacked the specifics on budget cuts and did nothing to assure him that Quinn could actually accomplish his goals.
Cross questioned Quinn’s sincerity when it comes to bipartisanship. He expressed frustration that Quinn failed to meet with the Republican caucus — whose votes are not needed to pass most measures in the House – before his State of the State speech. He likened Quinn to Blagojevich in failing to include the minority party in most discussions.
“(Quinn) is wholly entrenched in the system. The gadfly political outsider has become the ultimate insider working with the speaker of the House and president of the Senate to preserve his power, to preserve his office,” Cross said.
Todd Maisch of the Illinois Chamber of Commerce said the governor needed to be more direct about his plans to help rebuild the state’s economy. “There were no specifics…there was no sense of urgency … what he talked about today sounds fine … but frankly it’s nibbling around the edges of a huge problem,” He said. “When it comes to the central issues that are facing Illinoisans — job losses and a state government that’s bankrupt — there was no take away today.”
State Treasurer Alexi Giannoulias, who is also a Democratic candidate for U.S. Senate, said Quinn is facing some big challenges. “It’s not dissimilar to the situation that President Obama faced when he took office,” said Giannoulias. “I think the one point that (Quinn) did hit on was that the next couple years will be some of the hardest years for state government that we’ve ever seen.”
Tuesday, October 27, 2009
Back to borrowing
By Bethany Jaeger
Gov. Pat Quinn could propose borrowing roughly $1 billion for the third time since May to keep the state operating through the winter. Tax revenues have slowed, while spending pressures have not. Those pressures include unpaid bills, employee health insurance and financial aid grants for low-income college students.
While short-term borrowing is relatively normal to help the state get through the slow revenue season, the state already borrowed $1 billion in May and an additional $1.25 billion in August. That money, as well as any new short-term borrowing, needs to be repaid by the end of the fiscal year, June 30, 2010.
That’s on top of a $3.7 billion backlog of unpaid bills, according to the state comptroller’s office.
The legislative Commission on Government Forecasting and Accountability recently projected that state tax revenues could come in $900 million less than anticipated.
Wojcicki said Republicans have been kept out of the loop since the end of September. “It seems sort of like an oxymoron: Landmark reform and closed-door meetings without us.”
We’ll keep you posted on new versions of campaign finance legislation throughout the week.
Gov. Pat Quinn could propose borrowing roughly $1 billion for the third time since May to keep the state operating through the winter. Tax revenues have slowed, while spending pressures have not. Those pressures include unpaid bills, employee health insurance and financial aid grants for low-income college students.
While short-term borrowing is relatively normal to help the state get through the slow revenue season, the state already borrowed $1 billion in May and an additional $1.25 billion in August. That money, as well as any new short-term borrowing, needs to be repaid by the end of the fiscal year, June 30, 2010.
That’s on top of a $3.7 billion backlog of unpaid bills, according to the state comptroller’s office.
The legislative Commission on Government Forecasting and Accountability recently projected that state tax revenues could come in $900 million less than anticipated.
Although Quinn has had to cut more than $2 billion in spending this fiscal year, he and the legislature recently restored $200 million to fund second semester grants of the Monetary Award Program for low-income college students. But they did not identify a way to pay for the additional spending.
After meeting with legislative leaders behind closed doors in the Capitol Tuesday afternoon, Quinn said he could propose borrowing $900 million to ease the cash-flow problem. “We have to have that just to have liquidity for the months of November and December, January and February,” he said. “That’s historically been a time when state government’s finances — the cash that’s in the till — is the lowest.”
After meeting with legislative leaders behind closed doors in the Capitol Tuesday afternoon, Quinn said he could propose borrowing $900 million to ease the cash-flow problem. “We have to have that just to have liquidity for the months of November and December, January and February,” he said. “That’s historically been a time when state government’s finances — the cash that’s in the till — is the lowest.”
Of the $900 million, some $250 million would potentially be dedicated to pay Medicaid bills and to ensure Illinois continues to qualify for an enhanced federal Medicaid reimbursement rate offered through the federal stimulus program.
The state treasurer and comptroller have to sign off on short-term borrowing plans. It does not need legislative approval. According to Carol Knowles, Comptroller Dan Hynes’ spokeswoman, the comptroller’s office has not received a borrowing proposal from the governor's office.
Hynes, who is running against Quinn in the Democratic primary for governor next February, said in his latest quarterly report that the state carried over a record $3.8 billion in overdue bills from the previous fiscal year at the same time tax revenues took a nosedive. He described the fiscal situation as “grim, and getting worse.”
The state treasurer and comptroller have to sign off on short-term borrowing plans. It does not need legislative approval. According to Carol Knowles, Comptroller Dan Hynes’ spokeswoman, the comptroller’s office has not received a borrowing proposal from the governor's office.
Hynes, who is running against Quinn in the Democratic primary for governor next February, said in his latest quarterly report that the state carried over a record $3.8 billion in overdue bills from the previous fiscal year at the same time tax revenues took a nosedive. He described the fiscal situation as “grim, and getting worse.”
Democrats have proposed various versions of an income tax increase in the past few months, but they have failed to win approval without Republican support. Fewer votes, a simple majority, would be needed once the legislature convenes its spring session in January.
After meeting with other legislative leaders and the governor, Senate President John Cullerton said: “Nobody wants to vote for tax increases. All you can do is borrow.”
House Speaker Michael Madigan also said there’s close to “no other choice” and that it would push the underlying problem down the road. “This has been done year after year after year,” he said of the short-term borrowing, but he added, “This is a higher amount of money.”
House Minority Leader Tom Cross said the problem has evolved for a number of years. "There’s a real strain on our budget that I’m not sure is going to be able to be met next year,” he said. His spokeswoman, Sara Wojcicki, said Cross also sought clarification about the governor’s priorities. “All this borrowing is something that needs to be carefully scrutinized,” she said. “We want to know how exactly it’s going to be spent, what bills are going to be paid down, why, in that order.”
After meeting with other legislative leaders and the governor, Senate President John Cullerton said: “Nobody wants to vote for tax increases. All you can do is borrow.”
House Speaker Michael Madigan also said there’s close to “no other choice” and that it would push the underlying problem down the road. “This has been done year after year after year,” he said of the short-term borrowing, but he added, “This is a higher amount of money.”
House Minority Leader Tom Cross said the problem has evolved for a number of years. "There’s a real strain on our budget that I’m not sure is going to be able to be met next year,” he said. His spokeswoman, Sara Wojcicki, said Cross also sought clarification about the governor’s priorities. “All this borrowing is something that needs to be carefully scrutinized,” she said. “We want to know how exactly it’s going to be spent, what bills are going to be paid down, why, in that order.”
Senate Minority Leader Christine Radogno added, “I do think there’s a good faith effort to manage, but the overall message here is we still need to look at the spending side of things. And it seems to be more focused on the borrowing.”
The leaders’ meeting kicks off the last week of the legislature’s annual fall veto session. While they and the governor previously vowed to work together to propose new campaign finance reforms during this veto session, they said they did not discuss campaign finance during the closed-door meeting. Democratic leaders met separately with reform advocates, again, behind closed doors.Wojcicki said Republicans have been kept out of the loop since the end of September. “It seems sort of like an oxymoron: Landmark reform and closed-door meetings without us.”
We’ll keep you posted on new versions of campaign finance legislation throughout the week.
Friday, July 31, 2009
Governor: Budget plan won't fund the full fiscal year
By Bethany Jaeger
Gov. Pat Quinn started using his unprecedented discretion to spread around about $3.4 billion largely to prevent drastic cuts to human services, followed by health care, education and public safety programs. At the same time, he continued to outline general areas of state operations that will get cut by $1 billion total. However, he said the reductions won’t free up enough money to satisfy such spending needs as financial aid for needy college students and health care liabilities for state employees and retirees.
During a Chicago news conference Friday afternoon, the governor’s office said the revised operating budget also does nothing to address the exceptionally high $3.9 billion backlog in unpaid bills. As a result, Quinn said he will continue to urge lawmakers to consider a temporary income tax increase to get through the rest of this fiscal year when they return to the Capitol in October.
Quinn said the roughly $26.1 billion spending plan would run out of money before the fiscal year ends next June. “We are aware of the fact that we are going to come up short this fiscal year.”
The General Assembly approved the spending plan July 15, giving the governor wide discretion in spending lump sums for each state agency. Legislators also approved a $3.4 billion short-term borrowing plan to make the state’s contribution into the public employee pension system, freeing up that same amount to put towards state operations. Of that, $2.2 billion is dedicated to community-based human services, while another $1.2 billion is up to the governor to divvy out. The plan also charged the governor with cutting an additional $1 billion.
Quinn said on Friday that he decided to spread the cuts out in a way that would maximize federal matching funds, as well as federal stimulus dollars. And he said he chose to fund health-related initiatives that focus on disease prevention and that could reduce demand for more expensive services later, including home health programs that allow senior citizens to remain in their homes rather than be sent to more expensive nursing homes.
The general areas of reductions have not changed since announced last month. The administration still plans to cut $185 million from state operations. The administration already sent out layoff notices earlier this month. Some employees will lose their jobs. Others will fill vacancies. Lawmakers and executive branch workers also will have to take one furlough day a month. The administration wants unionized employees to consider such concessions, but that would require the unions to open their active contracts that provide for annual pay raises.
“Do we really need the pay raise for union employees in the coming fiscal year, given all the things that have happened in this fiscal year?” Quinn said. “That’s $125 million. If the union said, ‘Well, we’ll take a pay freeze. We understand that we don’t want to, but we’re going to do that,’ then they can help save a lot of jobs.”
The idea is strongly opposed by the American Federation of State, County and Municipal Employees Council 31, the largest public employee union. Officials have met with the administration to bargain over the impact of layoffs, but they have not negotiated whether unionized employees will take furlough days, according to Anders Lindall, Council 31 spokesman.
“Should the administration make a proposal, we’re obligated to listen and prepared to do so,” he said in an e-mail. “But the height of this terrible recession is the worst possible time to reduce services to Illinois residents, whether by furlough or layoff of the frontline employees who make those services happen.”
Jerry Stermer, Quinn’s chief of staff, said frontline employees such as Department of Corrections officers will not be subject to furlough days because they would be replaced by fellow workers who would be paid for overtime. Stermer said the administration within the week would release more details about which employees would have to take unpaid days off.
Other general areas of spending reductions include grants to local agencies and governments, which would be reduced by $250 million.
Even after the cuts, the administration contends that Medicaid funding will fall $600 million short of the need, and financial aid for low-income college students will be reduced by $225 million.
“Some legislators screamed to the heavens, ‘Cut, cut, cut,’” Quinn said. “We have cut. We have cut from here to Kingdom Come. I don’t like college scholarships being cut $225 million. That’s our future.”
On the other hand, the administration does plan to put more money toward some education programs, human services and other public health and safety initiatives.
As part of the $3.4 billion borrowing scheme, Quinn must dedicate $2.2 billion to human services. Here’s how he said he would spend it:
- $1.4 billion for grants to programs that serve people with developmental disabilities, drug and alcohol addictions and mental health needs.
- $342 million for Department on Aging community care program, aimed at keeping seniors in their homes.
- $272 million for the Department of Children and Family Services for court-ordered services.
- $27 million for community adult education and GED services.
- $18 million for Chicago-area mass transit subsidies and free rides for seniors and people with disabilities.
The remaining $1.2 billion is slated to be split among programs related to health, education, disease prevention and public transportation. Some examples include:
- $300 million for Medicaid.
- $700 million for group health insurance for state employees and retirees.
- $85 million for early childhood education (brining it up to about 90 percent of last year’s funding levels). See our July 21 blog for background.
- $11 million for bilingual education (bringing it up to about 90 percent of what they were operating at before).
- $17 million for HIV/AIDS community-based programs (“pretty much full strength” funding levels compared with last year).
- $9 million for breast and cervical cancer screening programs.
- $13 million for Amtrak.
Stermer said while the new spending plan authorizes $26 billion in spending from the general revenue fund, it falls $1.4 billion short of funding services at last year’s levels and does nothing to address the $3.9 billion backlog of unpaid bills.
The cuts that are being implemented now may not be the last, he said. “We may have to make additional cuts as time goes on if we cannot make resolution with the General Assembly as to the unmet needs.”
He referred to the administration’s belief that an income tax increase will be necessary to get through the rest of the fiscal year.
Wednesday, July 15, 2009
Budget deal reached but only builds a bridge
By Bethany Jaeger, with Jamey Dunn and Hilary Russell contributing
The state now has an operating budget in place, although the legislature likely will have to address a remaining $4 billion to $5 billion deficit later this year or early next year. Gov. Pat Quinn enacted the 12-month spending plan soon after it won approval by the General Assembly Wednesday night.
Numerous legislators described the package as less than ideal, the least bad option or a bridge to buy time until lawmakers agree on alternative revenue sources and long-term reforms. Instead of generating new revenue through a state income tax, the spending plan relies on various forms of borrowing and debt instruments.
Several lawmakers echoed the sentiments of House Majority Leader Barbara Flynn Currie: “We have run out of options,” just as state workers and agencies have “run out of time.”
The governor signed the spending portion of the bill (Senate Bill 1216) late Wednesday night, which will allow the comptroller’s office to issue hard copies of paychecks to 5,000 to 6,000 state employees Thursday, said Carol Knowles, spokeswoman for the comptroller.
Human service agencies are in a less certain position. While community-based providers received some assurance of state support, the governor will have wide discretion when deciding how to divvy out limited remaining funds and where to further reduce spending.
The budget deal primarily relies on borrowing to pay public employee pensions, borrowing from state agencies and essentially borrowing from Medicaid providers that don’t receive federal stimulus funds because the payment cycle is likely to lengthen.
Sen. Donne Trotter, a Chicago Democrat and budget negotiator for his caucus, said, “It’s not the best deal, but it will keep us going until we can really sit down and get a grasp on how we’re going to change doing business here in the state of Illinois.”
Even Rep. Bill Black, a Danville Republican, who berated the recent budget-making process as primarily behind closed doors and inadequate for essential state services, ended up voting for the bill that he disliked. “Because there is no alternative,” he said afterward.
Spending = SB 1216
Grant-funded services will receive an average of 86 percent of the funding level originally sought by the governor, while much of state government operations will receive about the same level as last fiscal year.
The Illinois Department of Transportation will get some extra money to hire engineers who will handle the increased workload generated by the federal stimulus package and state’s $31 billion capital construction program recently enacted.
Cost-cutting measures (included in the BIMP) = SB 1912
There will be significant cuts, but the legislature left it up to the governor to decide when and where. Quinn also will have authority to take “administrative charge backs,” which basically are loans from state agencies that the state has to repay.
Members of the executive branch and of the General Assembly will have to take 12 unpaid days off, which amounts to about 4.5 percent of legislators’ annual salaries and stipends, according to Rep. Frank Mautino, assistant majority leader from Spring Valley. The governor also said he hopes to negotiate furlough days with unionized employees to avert the need for layoffs as large as 2,600 workers.
The governor now has authority to ask agencies to reserve a percentage of their funding in an attempt to save an additional $1.1 billion (on top of the $1 billion he’s already supposed to cut). He would have a rare range of flexibility in deciding how to cut that $1.1 billion.
“There is a check on it, but it’s a much greater latitude than anyone’s ever had, the first year of [former Gov. Rod] Blagojevich included,” Mautino said. If Quinn if were to lower a service provider’s payment rate or raise co-payment amounts for people enrolled in state-sponsored programs, then he would have to go first get approval from the legislative panel called the Joint Committee on Administrative Rules.
The governor won’t need that committee’s approval to tell state agencies to reserve a percentage of their funds to, say, hold the line on travel costs. To close a prison or other state facility, he would still have to go through a public review process of another legislative panel, the Commission on Government Forecasting and Accountability.
Elementary and secondary schools will receive about $161 more in general state aid per student than they received last year, but that’s less than the governor originally planned. Mautino said the hope among some lawmakers is that he’ll put more of his discretionary spending money into grants for early childhood education and other education-related programs.
Borrowing = SB 1292
One of the main revenue sources that prevented the need for deeper cuts is a short-term borrowing scheme that increased to about $3.5 billion. Of that, $2.2 billion will go to community-based human services. The governor will have wide discretion in spending the remaining $1.2 billion.
Rep. Patricia Bellock, a Hinsdale Republican, said such groups as substance abuse providers fear that their funding will remain cut because their services are not matched by federal Medicaid reimbursements. Currie said during floor debate that the governor would have discretion to shift money to those services.
The borrowing scheme received mixed reactions. “This is one of the only cards we have left on the table,” said Rep. Kevin McCarthy, an Orland Park Democrat.
“We are not acting prudently,” said Rep. Jack Franks, a Marengo Democrat. “This will not balance the budget. Let’s not kid ourselves. This is only smoke and mirrors.”
Rep. Dave Winters, a Shirland Republican, added that borrowing this year would automatically create a budget hole next year because it’s a one-time revenue source that will have to be repaid by about $750 million a year. Sen. Bill Brady, a Republican from Bloomington, said that the budget sets the state up to fall off of a “financial cliff” next year because it relies on short-term borrowing and stimulus funds that will not be available in the future.
What’s not in the budget?
What the budget deal will not do is address the state’s multibillion-dollar backlog of unpaid bills. In fact, the spending plan might even create longer payment delays for providers that don’t receive extra federal stimulus funds for Medicaid reimbursements.
The state will maintain payment cycles for providers such as hospitals that capture extra federal stimulus funds. That does not include pharmacists or some grant-funded human services, however.
Sen. Jeff Schoenberg, an Evanston Democrat, said the longer-term structural deficit will continue to plague state-funded services. “One thing that we’ll know with absolute certainty is that all of the hospitals, nursing homes and community-based health and human service providers will continue to experience severe cash flow problems,” particularly as the economic downturn makes it harder for them to access lines of credit, said Schoenberg, who said he’s working on two backup proposals if the borrowing schemes don’t pan out as hoped.
What’s next?
The legislature adjourned without a date certain to return, although the annual fall “veto session” is scheduled to start October 14.
When the legislature comes back, it’ll have an opportunity to reassess whether the revenue outlook improved from the economic stimulus and state construction programs. And when crafting next year’s budget, they won’t have to tackle as large of a pension payment ($4 billion topped a ramped-up payment schedule this year).
But Senate President John Cullerton said the state won’t be able to borrow its way through another year and that a tax increase is “inevitable.” “Now you see why we need the tax increase, if for no other reason than to pay [bills] instead of borrowing.”
Chicago Democrat Sen. James Meeks, longtime advocate for an income tax increase similar to House Bill 174 that the Senate approved in May, was absent from the floor during the vote. Meeks has campaigned for the income tax increase because he said it would provide property tax relief and create more equitable funding for education. Earlier in the day, Meeks said: “You either borrow or you vote for revenue. So since I voted for revenue, I’m not voting for borrowing.”
The state now has an operating budget in place, although the legislature likely will have to address a remaining $4 billion to $5 billion deficit later this year or early next year. Gov. Pat Quinn enacted the 12-month spending plan soon after it won approval by the General Assembly Wednesday night.
Numerous legislators described the package as less than ideal, the least bad option or a bridge to buy time until lawmakers agree on alternative revenue sources and long-term reforms. Instead of generating new revenue through a state income tax, the spending plan relies on various forms of borrowing and debt instruments.
Several lawmakers echoed the sentiments of House Majority Leader Barbara Flynn Currie: “We have run out of options,” just as state workers and agencies have “run out of time.”
The governor signed the spending portion of the bill (Senate Bill 1216) late Wednesday night, which will allow the comptroller’s office to issue hard copies of paychecks to 5,000 to 6,000 state employees Thursday, said Carol Knowles, spokeswoman for the comptroller.
Human service agencies are in a less certain position. While community-based providers received some assurance of state support, the governor will have wide discretion when deciding how to divvy out limited remaining funds and where to further reduce spending.
The budget deal primarily relies on borrowing to pay public employee pensions, borrowing from state agencies and essentially borrowing from Medicaid providers that don’t receive federal stimulus funds because the payment cycle is likely to lengthen.
Sen. Donne Trotter, a Chicago Democrat and budget negotiator for his caucus, said, “It’s not the best deal, but it will keep us going until we can really sit down and get a grasp on how we’re going to change doing business here in the state of Illinois.”
Even Rep. Bill Black, a Danville Republican, who berated the recent budget-making process as primarily behind closed doors and inadequate for essential state services, ended up voting for the bill that he disliked. “Because there is no alternative,” he said afterward.
Spending = SB 1216
Grant-funded services will receive an average of 86 percent of the funding level originally sought by the governor, while much of state government operations will receive about the same level as last fiscal year.
The Illinois Department of Transportation will get some extra money to hire engineers who will handle the increased workload generated by the federal stimulus package and state’s $31 billion capital construction program recently enacted.
Cost-cutting measures (included in the BIMP) = SB 1912
There will be significant cuts, but the legislature left it up to the governor to decide when and where. Quinn also will have authority to take “administrative charge backs,” which basically are loans from state agencies that the state has to repay.
Members of the executive branch and of the General Assembly will have to take 12 unpaid days off, which amounts to about 4.5 percent of legislators’ annual salaries and stipends, according to Rep. Frank Mautino, assistant majority leader from Spring Valley. The governor also said he hopes to negotiate furlough days with unionized employees to avert the need for layoffs as large as 2,600 workers.
The governor now has authority to ask agencies to reserve a percentage of their funding in an attempt to save an additional $1.1 billion (on top of the $1 billion he’s already supposed to cut). He would have a rare range of flexibility in deciding how to cut that $1.1 billion.
“There is a check on it, but it’s a much greater latitude than anyone’s ever had, the first year of [former Gov. Rod] Blagojevich included,” Mautino said. If Quinn if were to lower a service provider’s payment rate or raise co-payment amounts for people enrolled in state-sponsored programs, then he would have to go first get approval from the legislative panel called the Joint Committee on Administrative Rules.
The governor won’t need that committee’s approval to tell state agencies to reserve a percentage of their funds to, say, hold the line on travel costs. To close a prison or other state facility, he would still have to go through a public review process of another legislative panel, the Commission on Government Forecasting and Accountability.
Elementary and secondary schools will receive about $161 more in general state aid per student than they received last year, but that’s less than the governor originally planned. Mautino said the hope among some lawmakers is that he’ll put more of his discretionary spending money into grants for early childhood education and other education-related programs.
Borrowing = SB 1292
One of the main revenue sources that prevented the need for deeper cuts is a short-term borrowing scheme that increased to about $3.5 billion. Of that, $2.2 billion will go to community-based human services. The governor will have wide discretion in spending the remaining $1.2 billion.
Rep. Patricia Bellock, a Hinsdale Republican, said such groups as substance abuse providers fear that their funding will remain cut because their services are not matched by federal Medicaid reimbursements. Currie said during floor debate that the governor would have discretion to shift money to those services.
The borrowing scheme received mixed reactions. “This is one of the only cards we have left on the table,” said Rep. Kevin McCarthy, an Orland Park Democrat.
“We are not acting prudently,” said Rep. Jack Franks, a Marengo Democrat. “This will not balance the budget. Let’s not kid ourselves. This is only smoke and mirrors.”
Rep. Dave Winters, a Shirland Republican, added that borrowing this year would automatically create a budget hole next year because it’s a one-time revenue source that will have to be repaid by about $750 million a year. Sen. Bill Brady, a Republican from Bloomington, said that the budget sets the state up to fall off of a “financial cliff” next year because it relies on short-term borrowing and stimulus funds that will not be available in the future.
What’s not in the budget?
What the budget deal will not do is address the state’s multibillion-dollar backlog of unpaid bills. In fact, the spending plan might even create longer payment delays for providers that don’t receive extra federal stimulus funds for Medicaid reimbursements.
The state will maintain payment cycles for providers such as hospitals that capture extra federal stimulus funds. That does not include pharmacists or some grant-funded human services, however.
Sen. Jeff Schoenberg, an Evanston Democrat, said the longer-term structural deficit will continue to plague state-funded services. “One thing that we’ll know with absolute certainty is that all of the hospitals, nursing homes and community-based health and human service providers will continue to experience severe cash flow problems,” particularly as the economic downturn makes it harder for them to access lines of credit, said Schoenberg, who said he’s working on two backup proposals if the borrowing schemes don’t pan out as hoped.
What’s next?
The legislature adjourned without a date certain to return, although the annual fall “veto session” is scheduled to start October 14.
When the legislature comes back, it’ll have an opportunity to reassess whether the revenue outlook improved from the economic stimulus and state construction programs. And when crafting next year’s budget, they won’t have to tackle as large of a pension payment ($4 billion topped a ramped-up payment schedule this year).
But Senate President John Cullerton said the state won’t be able to borrow its way through another year and that a tax increase is “inevitable.” “Now you see why we need the tax increase, if for no other reason than to pay [bills] instead of borrowing.”
Chicago Democrat Sen. James Meeks, longtime advocate for an income tax increase similar to House Bill 174 that the Senate approved in May, was absent from the floor during the vote. Meeks has campaigned for the income tax increase because he said it would provide property tax relief and create more equitable funding for education. Earlier in the day, Meeks said: “You either borrow or you vote for revenue. So since I voted for revenue, I’m not voting for borrowing.”
Budget bills
FYI: These are the five bills the governor signed Wednesday night:
Wednesday, June 24, 2009
Everything in limbo
By Bethany Jaeger, with Jamey Dunn and Hilary Russell contributing
Illinois’ human service providers, as well as other state contractors, remain in limbo as to whether they’ll receive state funding after July 1. The General Assembly finished its special legislative session this afternoon without sending a spending plan to the governor. Lawmakers aren’t scheduled to return until Monday afternoon (the Senate won’t be back until Tuesday), which some providers said would be too late. Providers, many of whom rallied at the Capitol yesterday, anticipate having to close their doors or lay off employees without a state operating budget in place by then.
“What’s going on right now is cruel, it’s cynical and it doesn’t need to be happening. And it should have been addressed this week,” Senate Minority Leader Christine Radogno said after the legislature adjourned. She added: “There is a lack of clarity, a lack of leadership, in terms of what is going on. And in the meantime, people are dangling in the wind thinking that their lives are going to be inextricably altered.”
She proposed enacting a temporary budget to keep state services going, uninterrupted, and to give service providers more predictability.
Gov. Pat Quinn continues to publicly reject the idea of a temporary budget and said lawmakers still have time to enact a full-year balanced budget within six days. But he said balancing the budget, which he projects will carry a $9.2 billion deficit, will require a two-year income tax increase to generate $4.2 billion. (Comptroller Dan Hynes calculated the deficit at $7 billion.)
Legislative leaders of both political parties have cast doubt on the governor’s ability to gain enough votes in each chamber to approve a tax increase by July 1, although House Minority Leader Tom Cross said a few of his members are leaning toward a tax increase if they see action on other efficiencies and long-term spending reforms first.
Senate Democrats maintain that they approved a version of a permanent income tax increase in House Bill 174, which never got called for a vote in the House. According to Sen. James Meeks, the caucus doesn’t want to give up on the idea of offering property tax relief and increased education funding. Meeks said a temporary increase would result in a permanent increase in two years. “Temporary should scream out to everybody saying, ‘In two years, they’ll be back.’”
There could be more immediate support for a short-term borrowing scheme. A plan backed by Quinn would issue pension obligation notes rather than bonds, which typically are repaid over longer periods of time with higher interest costs. The House advanced the plan, Senate Bill 415, today. It would allow the state to make its full contribution into the public employee pension systems and free up $2.2 billion to help plug the deficit.
“If we get $2 billion to help close the deficit, that’s a good thing,” Quinn said after finishing a series of meetings with all four legislative caucuses. “We’re making progress, but we still have $7 billion to go.”
The governor and all four caucuses appear to agree one goal: to reduce spending by another $1 billion. But they might disagree on how to do that.
Quinn said his administration could save about $125 million by mandating 12 unpaid days off, or furlough days, for state employees, including unionized workers. Layoffs also could be considered, he said, although he added that he wouldn’t pursue layoffs until after he and the General Assembly settled on whether the state would generate new revenues first. “Under our contract, we can lay off employees if we don’t have the money to pay them,” he said.
Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees Council 31, said union leaders already met with the administration last week and determined that furlough days and layoffs wouldn’t save significant amounts of money. Henry Bayer, Council 31 executive director, said last week that even if every state employee worked the entire year unpaid, the state would only save about $3 billion. Lindall added this afternoon, “Any number of furlough days would be an insignificant savings to the state but a very real reduction in services.”
Cross said his caucus agrees with the need to look for $1 billion in cuts and recommends moratoriums on programs, furlough days and salary freezes, as well as reduced travel budgets.
Capital and recall
Two other items on hold include the $29 billion capital construction program and a provision that would allow voters to decide whether they wanted to change the state Constitution so they could recall the sitting governor.
Quinn said he will not sign the construction program without an operating budget in place. Democratic Sens. Martin Sandoval of Chicago and John Sullivan of Rushville said the capital plan and the operating budget have nothing to do with one another. In a Statehouse news conference, they joined organized labor groups to say Quinn has fallen through on his promise to immediately put people to work. "People are falling off the edge, losing their homes, having a very difficult time making ends meet, and he’s decided to hold the jobs bill as a political football until he gets his tax hike,” Sandoval said, citing the state’s 10.1 percent unemployment rate.
On the other hand, the Senate Democrats have held one of Quinn’s initiatives, House Joint Resolution Constitutional Amendment 31: a recall provision. Senate President John Cullerton said yesterday he would not call the provision for a vote until Quinn signed an ethics package that would limit the amount individuals, businesses and political organizations could donate to candidates. However, the Senate hasn’t even sent the measure, HB 7, to the governor’s desk.
Illinois’ human service providers, as well as other state contractors, remain in limbo as to whether they’ll receive state funding after July 1. The General Assembly finished its special legislative session this afternoon without sending a spending plan to the governor. Lawmakers aren’t scheduled to return until Monday afternoon (the Senate won’t be back until Tuesday), which some providers said would be too late. Providers, many of whom rallied at the Capitol yesterday, anticipate having to close their doors or lay off employees without a state operating budget in place by then.
“What’s going on right now is cruel, it’s cynical and it doesn’t need to be happening. And it should have been addressed this week,” Senate Minority Leader Christine Radogno said after the legislature adjourned. She added: “There is a lack of clarity, a lack of leadership, in terms of what is going on. And in the meantime, people are dangling in the wind thinking that their lives are going to be inextricably altered.”
She proposed enacting a temporary budget to keep state services going, uninterrupted, and to give service providers more predictability.
Gov. Pat Quinn continues to publicly reject the idea of a temporary budget and said lawmakers still have time to enact a full-year balanced budget within six days. But he said balancing the budget, which he projects will carry a $9.2 billion deficit, will require a two-year income tax increase to generate $4.2 billion. (Comptroller Dan Hynes calculated the deficit at $7 billion.)
Legislative leaders of both political parties have cast doubt on the governor’s ability to gain enough votes in each chamber to approve a tax increase by July 1, although House Minority Leader Tom Cross said a few of his members are leaning toward a tax increase if they see action on other efficiencies and long-term spending reforms first.
Senate Democrats maintain that they approved a version of a permanent income tax increase in House Bill 174, which never got called for a vote in the House. According to Sen. James Meeks, the caucus doesn’t want to give up on the idea of offering property tax relief and increased education funding. Meeks said a temporary increase would result in a permanent increase in two years. “Temporary should scream out to everybody saying, ‘In two years, they’ll be back.’”
There could be more immediate support for a short-term borrowing scheme. A plan backed by Quinn would issue pension obligation notes rather than bonds, which typically are repaid over longer periods of time with higher interest costs. The House advanced the plan, Senate Bill 415, today. It would allow the state to make its full contribution into the public employee pension systems and free up $2.2 billion to help plug the deficit.
“If we get $2 billion to help close the deficit, that’s a good thing,” Quinn said after finishing a series of meetings with all four legislative caucuses. “We’re making progress, but we still have $7 billion to go.”
The governor and all four caucuses appear to agree one goal: to reduce spending by another $1 billion. But they might disagree on how to do that.
Quinn said his administration could save about $125 million by mandating 12 unpaid days off, or furlough days, for state employees, including unionized workers. Layoffs also could be considered, he said, although he added that he wouldn’t pursue layoffs until after he and the General Assembly settled on whether the state would generate new revenues first. “Under our contract, we can lay off employees if we don’t have the money to pay them,” he said.
Anders Lindall, spokesman for the American Federation of State, County and Municipal Employees Council 31, said union leaders already met with the administration last week and determined that furlough days and layoffs wouldn’t save significant amounts of money. Henry Bayer, Council 31 executive director, said last week that even if every state employee worked the entire year unpaid, the state would only save about $3 billion. Lindall added this afternoon, “Any number of furlough days would be an insignificant savings to the state but a very real reduction in services.”
Cross said his caucus agrees with the need to look for $1 billion in cuts and recommends moratoriums on programs, furlough days and salary freezes, as well as reduced travel budgets.
Capital and recall
Two other items on hold include the $29 billion capital construction program and a provision that would allow voters to decide whether they wanted to change the state Constitution so they could recall the sitting governor.
Quinn said he will not sign the construction program without an operating budget in place. Democratic Sens. Martin Sandoval of Chicago and John Sullivan of Rushville said the capital plan and the operating budget have nothing to do with one another. In a Statehouse news conference, they joined organized labor groups to say Quinn has fallen through on his promise to immediately put people to work. "People are falling off the edge, losing their homes, having a very difficult time making ends meet, and he’s decided to hold the jobs bill as a political football until he gets his tax hike,” Sandoval said, citing the state’s 10.1 percent unemployment rate.
On the other hand, the Senate Democrats have held one of Quinn’s initiatives, House Joint Resolution Constitutional Amendment 31: a recall provision. Senate President John Cullerton said yesterday he would not call the provision for a vote until Quinn signed an ethics package that would limit the amount individuals, businesses and political organizations could donate to candidates. However, the Senate hasn’t even sent the measure, HB 7, to the governor’s desk.
Tuesday, June 09, 2009
First cuts, then taxes
by Jamey Dunn
The top four legislative leaders and Gov. Pat Quinn agreed that they will have to cut spending from a budget that is severely out of whack before resorting to tax hikes to plug the deficit. But how soon those cuts could be made and when lawmakers will agree on a budget is far from clear.
Leaders of both political parties met again with Quinn in his Chicago office today to continue budget talks after failing to agree on a bare bones budget approved along party lines May 31.
Quinn is not backing off of the need to approve a state income tax increase. He said after the meeting that his office would send out notices this week to human service providers letting them know that their funding could be slashed in half if the budget that legislators passed were enacted.
The governor said he and leaders discussed about $1 billion in cuts and cost-saving ideas in today’s meeting. However, he said that even if those cuts were achieved, an income tax increase would still be necessary. “We have to do this. Otherwise, … we won’t recognize our state,” he said.
Republicans continued to demand cuts and reform before considering tax increases, and they said they now sense some cooperation from Democrats. “I am encouraged that there does seem a willingness to consider some real changes to the way we do business in Illinois,” Senate Minority Leader Christine Radogno said.
Quinn said he could support pension reform, including a two-tiered system that would offer lesser benefits to newly hired state employees and teachers, as well as switching to a managed-care style for Medicaid programs. (His proposal for a two-tiered pension system stalled in the legislature last month.)
House Speaker Michael Madigan said he agrees that pension and Medicaid reforms are necessary and that they should be addressed regardless of the need to approve a budget. But he would not indicate whether making budget cuts and cost-saving reforms this summer would improve the chances of his chamber approving a tax increase. He said he thought that voter opinion, especially opposition from unemployed or under-employed constituents, played a large hand in legislators' rejection of a temporary income tax increase at the end of May.
“I think that lawmakers that do not wish to vote for the income tax increase are reflecting people in their districts,” Madigan said. “Seldom do Americans welcome tax increases.”
While Quinn emphasized the need to produce a “balanced budget” before the new fiscal year starts July 1, House Minority Leader Tom Cross said he doesn't think there's enough time to make the level of changes he thinks are necessary before his caucus would consider a tax increase.
“I think the worst thing we do as a state is to just come along and say that we’re going to raise taxes in this economy,” Cross said, “ and hand it over to a system that’s going to put us in the same situation in another two or three or four or five years without fundamentally changing how we handle things.”
Cross said that Quinn’s staff will sit down with Democrats and Republicans of both chambers to go through the budget line by line to look for places to cut. In addition, Quinn said he will issue executive orders to create a Taxpayer Action Commission to implement the Tax Payer Action Board’s cost-cutting recommendations as quickly as possible, and he said he'd form an Economic Recovery Commission intended to stimulate job growth and economic development.
Senate President John Cullerton said that he thinks a tax increase ultimately will be needed but that cutting the budget is the first priority. “It’s inevitable, I believe, after we do this cutting, …eventually we’re going to have to have some new revenues to help avoid the draconian cuts that the governor was talking about. So, hopefully, we’ll do that. But, first, we have to focus on those cuts.”
The next leaders’ meeting is tentatively scheduled for next Tuesday.
The top four legislative leaders and Gov. Pat Quinn agreed that they will have to cut spending from a budget that is severely out of whack before resorting to tax hikes to plug the deficit. But how soon those cuts could be made and when lawmakers will agree on a budget is far from clear.
Leaders of both political parties met again with Quinn in his Chicago office today to continue budget talks after failing to agree on a bare bones budget approved along party lines May 31.
Quinn is not backing off of the need to approve a state income tax increase. He said after the meeting that his office would send out notices this week to human service providers letting them know that their funding could be slashed in half if the budget that legislators passed were enacted.
The governor said he and leaders discussed about $1 billion in cuts and cost-saving ideas in today’s meeting. However, he said that even if those cuts were achieved, an income tax increase would still be necessary. “We have to do this. Otherwise, … we won’t recognize our state,” he said.
Republicans continued to demand cuts and reform before considering tax increases, and they said they now sense some cooperation from Democrats. “I am encouraged that there does seem a willingness to consider some real changes to the way we do business in Illinois,” Senate Minority Leader Christine Radogno said.
Quinn said he could support pension reform, including a two-tiered system that would offer lesser benefits to newly hired state employees and teachers, as well as switching to a managed-care style for Medicaid programs. (His proposal for a two-tiered pension system stalled in the legislature last month.)
House Speaker Michael Madigan said he agrees that pension and Medicaid reforms are necessary and that they should be addressed regardless of the need to approve a budget. But he would not indicate whether making budget cuts and cost-saving reforms this summer would improve the chances of his chamber approving a tax increase. He said he thought that voter opinion, especially opposition from unemployed or under-employed constituents, played a large hand in legislators' rejection of a temporary income tax increase at the end of May.
“I think that lawmakers that do not wish to vote for the income tax increase are reflecting people in their districts,” Madigan said. “Seldom do Americans welcome tax increases.”
While Quinn emphasized the need to produce a “balanced budget” before the new fiscal year starts July 1, House Minority Leader Tom Cross said he doesn't think there's enough time to make the level of changes he thinks are necessary before his caucus would consider a tax increase.
“I think the worst thing we do as a state is to just come along and say that we’re going to raise taxes in this economy,” Cross said, “ and hand it over to a system that’s going to put us in the same situation in another two or three or four or five years without fundamentally changing how we handle things.”
Cross said that Quinn’s staff will sit down with Democrats and Republicans of both chambers to go through the budget line by line to look for places to cut. In addition, Quinn said he will issue executive orders to create a Taxpayer Action Commission to implement the Tax Payer Action Board’s cost-cutting recommendations as quickly as possible, and he said he'd form an Economic Recovery Commission intended to stimulate job growth and economic development.
Senate President John Cullerton said that he thinks a tax increase ultimately will be needed but that cutting the budget is the first priority. “It’s inevitable, I believe, after we do this cutting, …eventually we’re going to have to have some new revenues to help avoid the draconian cuts that the governor was talking about. So, hopefully, we’ll do that. But, first, we have to focus on those cuts.”
The next leaders’ meeting is tentatively scheduled for next Tuesday.
Wednesday, May 27, 2009
Don’t expect GOP support
By Hilary Russell, with Bethany Jaeger contributing
Democrats had the past six years to prevent the deficit facing the state, according to Senate Republicans. And the GOP Caucus says it’s unwilling to concede on raising income taxes to fix the problem.
“We offered suggestions year after year after year about how to deal with it, and we were rebuffed at every turn,” said Senate Minority Leader Christine Radogno, adding that raising the income tax would create rather than solve problems. “It would put us in a very non-competitive situation with other states, and we would be one of the highest flat rate taxes. If the corporate rate were to go up by a similar amount, then we would be the highest in the world.”
She said the feeling among Senate Republicans is that the Democrats created the mess and, therefore, need to do their own housecleaning. And they can do it without Republicans because the majority party has 37 members, seven more than needed to approve an income tax increase.
Senate President John Cullerton, however, said yesterday, “I don’t think we have 30 Democrats.” The Senate Republicans also do not support shorting the state’s payment into the public employee pension system. Doing so, Radogno said, contributed to the ongoing budget problem and would worsen it.
Reforming state government also is running into a few hurdles. Last week, Radogno sponsored SB 350 on behalf of Gov. Pat Quinn’s Illinois Reform Commission. It would limit campaign contributions to $2,400 for individuals and $5,000 for corporations. It also would limit the amount statewide political parties could donate to their targeted candidates to $30,000.
While Radogno said Republicans are willing to compromise on the number of the campaign contributions limit, the cap on transfers from statewide political parties is a different story. “The fundamental reform has to include leadership committees, and that’s where we can’t compromise. Either they’re in or they’re or out, and, in our view, they must be in.”
The General Assembly is scheduled to adjourn its spring session on May 31, although the unresolved issues surrounding an operating budget and a reform package could toss the session into “overtime.” That would mean that all legislation approved after May 31 would need an extra majority of votes, giving Republicans a seat at the table — and a part of the blame — whether they wanted it or not.
Overtime or not, Radogno said her caucus remains calm. “It’s always an interesting last week. My guess is if there’s a sense of panic of might be on the other side of the aisle.”
Democrats had the past six years to prevent the deficit facing the state, according to Senate Republicans. And the GOP Caucus says it’s unwilling to concede on raising income taxes to fix the problem.
“We offered suggestions year after year after year about how to deal with it, and we were rebuffed at every turn,” said Senate Minority Leader Christine Radogno, adding that raising the income tax would create rather than solve problems. “It would put us in a very non-competitive situation with other states, and we would be one of the highest flat rate taxes. If the corporate rate were to go up by a similar amount, then we would be the highest in the world.”
She said the feeling among Senate Republicans is that the Democrats created the mess and, therefore, need to do their own housecleaning. And they can do it without Republicans because the majority party has 37 members, seven more than needed to approve an income tax increase.
Senate President John Cullerton, however, said yesterday, “I don’t think we have 30 Democrats.” The Senate Republicans also do not support shorting the state’s payment into the public employee pension system. Doing so, Radogno said, contributed to the ongoing budget problem and would worsen it.
Reforming state government also is running into a few hurdles. Last week, Radogno sponsored SB 350 on behalf of Gov. Pat Quinn’s Illinois Reform Commission. It would limit campaign contributions to $2,400 for individuals and $5,000 for corporations. It also would limit the amount statewide political parties could donate to their targeted candidates to $30,000.
While Radogno said Republicans are willing to compromise on the number of the campaign contributions limit, the cap on transfers from statewide political parties is a different story. “The fundamental reform has to include leadership committees, and that’s where we can’t compromise. Either they’re in or they’re or out, and, in our view, they must be in.”
The General Assembly is scheduled to adjourn its spring session on May 31, although the unresolved issues surrounding an operating budget and a reform package could toss the session into “overtime.” That would mean that all legislation approved after May 31 would need an extra majority of votes, giving Republicans a seat at the table — and a part of the blame — whether they wanted it or not.
Overtime or not, Radogno said her caucus remains calm. “It’s always an interesting last week. My guess is if there’s a sense of panic of might be on the other side of the aisle.”
Monday, May 18, 2009
"Doomsday" projected without tax hike
By Bethany Jaeger and Jamey Dunn
Gov. Pat Quinn tried to bolster his case for the need to raise state income taxes by describing drastic cuts — including laying off thousands of teachers and state police troopers and discontinuing health care for hundreds of thousands of people — if the legislature failed to approve an income tax increase within the next two weeks.
Public employee unions and human service providers immediately warned that a “doomsday budget” would threaten their members and the general public, especially when education and social services are most needed during an economic recession. State legislators, meanwhile, remain split on the need to raise taxes, cut spending or both to balance next year’s operating budget. Quinn estimates that the state faces at least an $11.6 billion deficit when combining this fiscal year and next.
While speaking at a City Club of Chicago luncheon today, the governor said he is telling people what they need to know, not what they want to hear. “Right now, it’s a very hard time, and people don’t like to pay taxes to begin with, and especially in hard times. But if we don’t use the public revenue of Illinois to help rescue our state economy, we’re going to continue in hard times.”
He projected a “slash and burn” budget that would cut $7.5 billion from state spending and rely on $4.1 billion from the federal stimulus funds. The cuts would include:
“I would say to those legislators who think the only way to get to a balanced budget is to cut everywhere we can, maybe they could take some of those prisoners home to their own house when they get out of jail,” Quinn said, drawing laughs and applause from the audience.
However, opponents to Quinn’s proposed income tax increase said the plan is a ploy to scare people into accepting higher taxes. Sen. Matt Murphy, a Palatine Republican, said he thinks Quinn’s proposal is a “gimmick.”
“I think his doomsday budget was the one he put out on March 18 with the biggest tax hike in state history,” he said. “That would cost people their jobs in a recession, and I think that’s the real doomsday.”
Murphy, co-chair of the Senate Deficit Reduction Committee, issued a report along with the other Republicans suggesting cuts that could help balance the budget, highlighting changes in the Medicaid system. “We can balance this budget without raising taxes and without having the draconian cuts that [Quinn] put out today,” he said. “It’s not going to be pain-free. It’s not going to be easy. If it were easy, we wouldn’t be in this situation.” Murphy added that he is disappointed the potential budget cuts that the committee considered have not been a major part of the discussion.
Sen. John Sullivan, a Rushville Democrat and member of the same committee, added that he is concerned cuts to health care and education, two of the largest parts of the budget, would jeopardize the state’s access to federal stimulus dollars. “Because of federal stimulus money that the state of Illinois will be receiving, we cannot reduce eligibility for Medicaid or health care services. And also, with regard to education, we cannot lower our appropriations,” he said.
Others say it’ll take both: cuts and tax increases. Rep. Linda Chapa LaVia, an Aurora Democrat who chairs the appropriations committee for elementary and secondary education, said taxpayers will need to see that the state is cutting as much as it can before they’ll accept paying increased taxes.
Sen. Donne Trotter, chief budget negotiator for the Senate Democrats, said he thinks approving a tax increase would be easier for legislators than approving drastic cuts outlined by Quinn’s office. He said: “Our problem is not finding a revenue source. It’s agreeing on one. There’s so many options out here, and we’ll just have to wait and see, as we progress, which one it is going to be.”
Trotter said he didn’t think a tradition such as the Illinois State Fair would really be cut. But, he said, people should take Quinn’s so-called doomsday budget seriously because cuts will be necessary to balance the budget. “There’s going to have to be some reductions. We can’t tax our way out of this,” he said.
Quinn stuck to his message that Illinois needs a permanent income tax increase, as opposed to a temporary increase, to manage the structural deficit and to “deal with reality in the 21st century.”
“Very few governors say, ‘Let’s raise taxes.’ But if you have to do it in order to make the people stronger today and in the long run, so be it.”
Meanwhile, legislative leaders met again behind closed doors this evening to talk about a major construction program funded by various tax and fee increases. Expect movement on that plan as soon as tomorrow.
Gov. Pat Quinn tried to bolster his case for the need to raise state income taxes by describing drastic cuts — including laying off thousands of teachers and state police troopers and discontinuing health care for hundreds of thousands of people — if the legislature failed to approve an income tax increase within the next two weeks.
Public employee unions and human service providers immediately warned that a “doomsday budget” would threaten their members and the general public, especially when education and social services are most needed during an economic recession. State legislators, meanwhile, remain split on the need to raise taxes, cut spending or both to balance next year’s operating budget. Quinn estimates that the state faces at least an $11.6 billion deficit when combining this fiscal year and next.
While speaking at a City Club of Chicago luncheon today, the governor said he is telling people what they need to know, not what they want to hear. “Right now, it’s a very hard time, and people don’t like to pay taxes to begin with, and especially in hard times. But if we don’t use the public revenue of Illinois to help rescue our state economy, we’re going to continue in hard times.”
He projected a “slash and burn” budget that would cut $7.5 billion from state spending and rely on $4.1 billion from the federal stimulus funds. The cuts would include:
- $1.5 billion from education, resulting in the loss of 14,300 teachers and eliminating preschool for 100,000 children.
- $554 million from higher education, affecting 400,000 college students who would lose their state financial aid grants.
- $1.2 billion from health care, leading 650,000 people of all ages to lose state-sponsored programs for prescription drugs and retirement health care.
- $368 million from senior services, ending services for 271,000 seniors who currently use programs for community care, elder abuse and neglect and Circuit Breaker property tax relief.
- $27 million from veterans’ care, closing four veterans’ homes and eliminating a program to treat traumatic brain injuries and post traumatic stress disorders.
- $769 million from human services, eliminating home care for 5,000 people with disabilities and addiction treatment and prevention for another 45,000 people, as well as child care for 1,000 children.
- $549 million from economic development, eliminating all state funding for public transit and AMTRAK.
- $98 million from agriculture and natural resources, erasing funding for state fairs and closing 60 parks and every museum in the state.
- $1 billion from local governments, which would affect their ability to fund public safety and other local services.
- $294 million from public safety, laying off nearly 1,000 state troopers and releasing about 6,000 prisoners early from their detentions.
“I would say to those legislators who think the only way to get to a balanced budget is to cut everywhere we can, maybe they could take some of those prisoners home to their own house when they get out of jail,” Quinn said, drawing laughs and applause from the audience.
However, opponents to Quinn’s proposed income tax increase said the plan is a ploy to scare people into accepting higher taxes. Sen. Matt Murphy, a Palatine Republican, said he thinks Quinn’s proposal is a “gimmick.”
“I think his doomsday budget was the one he put out on March 18 with the biggest tax hike in state history,” he said. “That would cost people their jobs in a recession, and I think that’s the real doomsday.”
Murphy, co-chair of the Senate Deficit Reduction Committee, issued a report along with the other Republicans suggesting cuts that could help balance the budget, highlighting changes in the Medicaid system. “We can balance this budget without raising taxes and without having the draconian cuts that [Quinn] put out today,” he said. “It’s not going to be pain-free. It’s not going to be easy. If it were easy, we wouldn’t be in this situation.” Murphy added that he is disappointed the potential budget cuts that the committee considered have not been a major part of the discussion.
Sen. John Sullivan, a Rushville Democrat and member of the same committee, added that he is concerned cuts to health care and education, two of the largest parts of the budget, would jeopardize the state’s access to federal stimulus dollars. “Because of federal stimulus money that the state of Illinois will be receiving, we cannot reduce eligibility for Medicaid or health care services. And also, with regard to education, we cannot lower our appropriations,” he said.
Others say it’ll take both: cuts and tax increases. Rep. Linda Chapa LaVia, an Aurora Democrat who chairs the appropriations committee for elementary and secondary education, said taxpayers will need to see that the state is cutting as much as it can before they’ll accept paying increased taxes.
Sen. Donne Trotter, chief budget negotiator for the Senate Democrats, said he thinks approving a tax increase would be easier for legislators than approving drastic cuts outlined by Quinn’s office. He said: “Our problem is not finding a revenue source. It’s agreeing on one. There’s so many options out here, and we’ll just have to wait and see, as we progress, which one it is going to be.”
Trotter said he didn’t think a tradition such as the Illinois State Fair would really be cut. But, he said, people should take Quinn’s so-called doomsday budget seriously because cuts will be necessary to balance the budget. “There’s going to have to be some reductions. We can’t tax our way out of this,” he said.
Quinn stuck to his message that Illinois needs a permanent income tax increase, as opposed to a temporary increase, to manage the structural deficit and to “deal with reality in the 21st century.”
“Very few governors say, ‘Let’s raise taxes.’ But if you have to do it in order to make the people stronger today and in the long run, so be it.”
Meanwhile, legislative leaders met again behind closed doors this evening to talk about a major construction program funded by various tax and fee increases. Expect movement on that plan as soon as tomorrow.
Wednesday, April 01, 2009
GOP ideas to trim budget
By Hilary Russell
Republican lawmakers still believe there’s more than one way to skin a deficit, and it’s not by raising taxes.
Read more about the Deficit Reduction Committee here. The GOP committee members, including Sens. Matt Murphy and Carole Pankau, released a report today that offered ways to save money, saving the most cutting and consolidating various programs within Medicaid. (Full report here; summary here.)
“There’s a public expectation out there that we get serious about tightening government’s belt — like they’re having to do it at home — and to do it without raising their taxes,” Murphy said in a Statehouse news conference. “And we’re here to say we heard the public in that regard.”
According to the report, the most significant Medicaid cut could come from applying for a federal waiver for Medicaid-eligible programs to capture as much as $435 million more in federal matching funds. Another suggestion is the creation of a private-public partnership, which would transfer decisions regarding benefit eligibility to private partners. That, in turn, would help to decrease the opportunity for fraudulent claims. And, while all of the savings weren’t specified, the report suggests that a new way to manage pharmaceutical benefits and higher co-pays could save $110 million in one year and $730 million over five years.
Murphy said the Republican committee members found areas in the state’s finances that could be reduced or eliminated, saving a total of more than $3 billion annually and more than $20 billion throughout the next five years.
“This is a meaningful deficit reduction without raising taxes, and it’s a serious answer to those who are asking for alternatives to the governor’s record-setting tax hike,” Murphy added.
Last week ended the series of four bipartisan Deficit Reduction Committee meetings in which members heard from various budget experts about ways to fix the state’s deficit. Despite hours of testimony, members were no closer to solving the state’s financial crisis than when they started.
Without assigning a dollar amount to the savings, the report also listed trimming pension benefits for new state employees, requiring more managed care health benefits for existing and new employees and allowing more charter schools to open as additional cost-cutting measures.
Republican lawmakers still believe there’s more than one way to skin a deficit, and it’s not by raising taxes.
Read more about the Deficit Reduction Committee here. The GOP committee members, including Sens. Matt Murphy and Carole Pankau, released a report today that offered ways to save money, saving the most cutting and consolidating various programs within Medicaid. (Full report here; summary here.)
“There’s a public expectation out there that we get serious about tightening government’s belt — like they’re having to do it at home — and to do it without raising their taxes,” Murphy said in a Statehouse news conference. “And we’re here to say we heard the public in that regard.”
According to the report, the most significant Medicaid cut could come from applying for a federal waiver for Medicaid-eligible programs to capture as much as $435 million more in federal matching funds. Another suggestion is the creation of a private-public partnership, which would transfer decisions regarding benefit eligibility to private partners. That, in turn, would help to decrease the opportunity for fraudulent claims. And, while all of the savings weren’t specified, the report suggests that a new way to manage pharmaceutical benefits and higher co-pays could save $110 million in one year and $730 million over five years.
Murphy said the Republican committee members found areas in the state’s finances that could be reduced or eliminated, saving a total of more than $3 billion annually and more than $20 billion throughout the next five years.
“This is a meaningful deficit reduction without raising taxes, and it’s a serious answer to those who are asking for alternatives to the governor’s record-setting tax hike,” Murphy added.
Last week ended the series of four bipartisan Deficit Reduction Committee meetings in which members heard from various budget experts about ways to fix the state’s deficit. Despite hours of testimony, members were no closer to solving the state’s financial crisis than when they started.
Without assigning a dollar amount to the savings, the report also listed trimming pension benefits for new state employees, requiring more managed care health benefits for existing and new employees and allowing more charter schools to open as additional cost-cutting measures.
Wednesday, March 04, 2009
Deficits and guns
Deficit redux
By Hilary Russell
Members of the bipartisan Senate Committee on Deficit Reduction held the first of four hearings today to determine how to pare down the state deficit. Education advocates and officials testified for three hours about how budget cuts to education would have lasting consequences.
Sen. Matt Murphy, a Palatine Republican, chairs the committee with Sen. Donne Trotter, a Chicago Democrat. Murphy said today’s hearing detracts from the committee’s initial intention. “We want to know where you’re willing to cut and where we think we can cut. I mean, it’s not supposed to be a parade of people explaining how they’re indispensable,” he said.
Glenn Poshard, president of Southern Illinois University, said the school received $ 9 million less this year than it did eight years ago, and that loss resulted in tuition hikes that nearly doubled the cost of an education since 2004.
Trotter said he viewed the committee hearing as a positive work-in-progress. “We asked the individuals, the stakeholders, to talk about how we could find money. And there were some ideas that weren’t considered before. I think we are getting the feel of what we can seriously be looking at that individuals are willing to stomach,” he said.
The hearings will span through March 24, covering topics such as health and human services, pensions and state government operations and revenues and reductions. The next committee meets Tuesday, March 10, and will discuss the Healthcare and Family Service budget deficit and revenue shortfall. Senate President John Cullerton, a Chicago Democrat, and Senator Minority Leader Christine Radogno, a Lemont Republican, each appointed five party members to the committee.
Gun bill advances
By Jamey Dunn
Gun owners may have to report any loss or theft of a handgun to local police within three days or they could lose the right to own a firearm.
House Bill 845, sponsored by Chicago Democrat Sen. Edward Acevedo, passed out of a House committee today with a 6 to 4 vote. Cook County State’s Attorney Anita Alvarez testified in favor of the measure, which she called “common sense gun legislation.” She said it would help law enforcement track guns that are used in crimes because the owners often supply the guns to people who commit the crimes, and then the owners claim they lost the gun.
Todd Vandermyde, spokesman for the Illinois Rifle Association, said the bill is unconstitutional because it could take away the right to own a firearm for a “failure to report a property crime.” He said that current laws should be properly enforced to keep guns out of the hands of criminals.
Failing to report a lost or stolen handgun the first time would be a petty offense. A second offense could carry the weight of a felony, possible jail time and loss of the Firearm Owner’s Identification Card, which is required for gun ownership in Illinois.
By Hilary Russell
Members of the bipartisan Senate Committee on Deficit Reduction held the first of four hearings today to determine how to pare down the state deficit. Education advocates and officials testified for three hours about how budget cuts to education would have lasting consequences.
Sen. Matt Murphy, a Palatine Republican, chairs the committee with Sen. Donne Trotter, a Chicago Democrat. Murphy said today’s hearing detracts from the committee’s initial intention. “We want to know where you’re willing to cut and where we think we can cut. I mean, it’s not supposed to be a parade of people explaining how they’re indispensable,” he said.
Glenn Poshard, president of Southern Illinois University, said the school received $ 9 million less this year than it did eight years ago, and that loss resulted in tuition hikes that nearly doubled the cost of an education since 2004.
Trotter said he viewed the committee hearing as a positive work-in-progress. “We asked the individuals, the stakeholders, to talk about how we could find money. And there were some ideas that weren’t considered before. I think we are getting the feel of what we can seriously be looking at that individuals are willing to stomach,” he said.
The hearings will span through March 24, covering topics such as health and human services, pensions and state government operations and revenues and reductions. The next committee meets Tuesday, March 10, and will discuss the Healthcare and Family Service budget deficit and revenue shortfall. Senate President John Cullerton, a Chicago Democrat, and Senator Minority Leader Christine Radogno, a Lemont Republican, each appointed five party members to the committee.
Gun bill advances
By Jamey Dunn
Gun owners may have to report any loss or theft of a handgun to local police within three days or they could lose the right to own a firearm.
House Bill 845, sponsored by Chicago Democrat Sen. Edward Acevedo, passed out of a House committee today with a 6 to 4 vote. Cook County State’s Attorney Anita Alvarez testified in favor of the measure, which she called “common sense gun legislation.” She said it would help law enforcement track guns that are used in crimes because the owners often supply the guns to people who commit the crimes, and then the owners claim they lost the gun.
Todd Vandermyde, spokesman for the Illinois Rifle Association, said the bill is unconstitutional because it could take away the right to own a firearm for a “failure to report a property crime.” He said that current laws should be properly enforced to keep guns out of the hands of criminals.
Failing to report a lost or stolen handgun the first time would be a petty offense. A second offense could carry the weight of a felony, possible jail time and loss of the Firearm Owner’s Identification Card, which is required for gun ownership in Illinois.
Wednesday, February 04, 2009
$5 billion worse off and U-N-I-T-Y
By Hilary Russell
Just days after the conviction and removal of former Gov. Rod Blagojevich, members of the 96th General Assembly wasted no time Tuesday learning how dire the financial straits of Lincoln’s land really are. The state is on track to begin fiscal year 2010 saddled with a $9 billion deficit. That far exceeds the $4 billion estimate released during Blagojevich’s last few months in office. Comptroller Dan Hynes said the state’s financial security isn’t going to improve in the near future.
“It dwarfs any previous budget faced by a governor and essentially shows just how bad things have gotten,” Hynes said from his Statehouse office.
Several factors are to blame for the state’s fiscal crisis. The first is attributed to two former governors, Blagojevich and former Gov. George Ryan, both of whom Hynes said “neglected and ignored” budget issues year after year.
The second factor that leads Hynes to use the words “disturbing” and “unprecedented” is the discovery that the fiscal year ’09 budget brought in far less money than projected. “(It) was imbalanced from the beginning by several billion dollars,” Hynes added. “So we started our year in a hole.”
He said a third factor is the worldwide economic crisis that hurts the state’s investments.
Even with a federal stimulus package in the works and the possibility that Illinois could receive $3 billion, it would only offer a one- to two-year reprieve, leaving the state with at least a $6 billion deficit.
One of Blagojevich’s accusations was that the legislature wanted to get rid of him to raise taxes. Now, the question of a state income tax hike comes to mind, and Hynes, rather than directly address the possibility of an increase, said the government would have to make the first sacrifice before asking taxpayers for more money.
Hynes added that the backlog of Medicaid bills is one of the largest problems, causing health care providers to struggle as they try to maintain services in the absence of state reimbursements.
Gov. Pat Quinn has requested a one-month extension to examine the budget before he presents his annual budget address March 18.
New laws
By Jamey Dunn
The legislature sent SB 1132 to Quinn's desk Monday. He plans to sign the bill into law tomorrow afternoon in the state Capitol. The measure would restore funding to the secretary of state, the attorney general, the treasurer, the Department of Healthcare and Family Services, the Department of Commerce and Economic Opportunity and several conservation projects geared toward Illinois habitats, fish and birds. The measure was approved last month, when Blagojevich was still in office, but it was held until a new governor was in place.
Quinn also signed his first bill, SB 2757, into law today. The bill addresses recent court cases by making a change to the Illinois smoking ban. Now, violations of the ban will be civil rather than criminal offenses and will be handled by the Illinois Department of Public Health. The bill also includes certain exemptions to the ban and describes the processes for issuing and appealing tickets.
"Unity and harmony"
By Jamey Dunn
In a public gesture of bipartisanship, all four legislative leaders met with Gov. Pat Quinn in his office Wednesday to discuss the problems facing the state.
The meeting itself was brief, under half an hour. Afterward, Quinn addressed reporters with House Speaker Michael Madigan, Senate President John Cullerton, Senate Minority Leader Christine Radogno and House Minority Leader Tom Cross. Before taking questions from the press, Quinn said that “we are going to be focusing on unity and harmony today.”
Quinn did not give specifics on how Illinois would address its budget deficit. He said a gasoline tax increase, which already has been proposed in HB 1, was not going to be ruled out. He also said it is very important that Illinois gets its “fair share” of the federal economic stimulus plan, which is why he made a trip to Washington, D.C., Tuesday.
Senate leaders made another gesture of unity when they approved the resolution, SJR 1, to create a joint bipartisan committee on ethics reform. The resolution went forward with the understanding that the House would amend it to allow Radogno to appoint more members. As written, Cullerton would be allowed to appoint six members and Radogno four. She argued that ethics reform will require true bipartisanship, and Cullerton said he was open to having more Republicans on the committee.
Just days after the conviction and removal of former Gov. Rod Blagojevich, members of the 96th General Assembly wasted no time Tuesday learning how dire the financial straits of Lincoln’s land really are. The state is on track to begin fiscal year 2010 saddled with a $9 billion deficit. That far exceeds the $4 billion estimate released during Blagojevich’s last few months in office. Comptroller Dan Hynes said the state’s financial security isn’t going to improve in the near future.
“It dwarfs any previous budget faced by a governor and essentially shows just how bad things have gotten,” Hynes said from his Statehouse office.
Several factors are to blame for the state’s fiscal crisis. The first is attributed to two former governors, Blagojevich and former Gov. George Ryan, both of whom Hynes said “neglected and ignored” budget issues year after year.
The second factor that leads Hynes to use the words “disturbing” and “unprecedented” is the discovery that the fiscal year ’09 budget brought in far less money than projected. “(It) was imbalanced from the beginning by several billion dollars,” Hynes added. “So we started our year in a hole.”
He said a third factor is the worldwide economic crisis that hurts the state’s investments.
Even with a federal stimulus package in the works and the possibility that Illinois could receive $3 billion, it would only offer a one- to two-year reprieve, leaving the state with at least a $6 billion deficit.
One of Blagojevich’s accusations was that the legislature wanted to get rid of him to raise taxes. Now, the question of a state income tax hike comes to mind, and Hynes, rather than directly address the possibility of an increase, said the government would have to make the first sacrifice before asking taxpayers for more money.
Hynes added that the backlog of Medicaid bills is one of the largest problems, causing health care providers to struggle as they try to maintain services in the absence of state reimbursements.
Gov. Pat Quinn has requested a one-month extension to examine the budget before he presents his annual budget address March 18.
New laws
By Jamey Dunn
The legislature sent SB 1132 to Quinn's desk Monday. He plans to sign the bill into law tomorrow afternoon in the state Capitol. The measure would restore funding to the secretary of state, the attorney general, the treasurer, the Department of Healthcare and Family Services, the Department of Commerce and Economic Opportunity and several conservation projects geared toward Illinois habitats, fish and birds. The measure was approved last month, when Blagojevich was still in office, but it was held until a new governor was in place.
Quinn also signed his first bill, SB 2757, into law today. The bill addresses recent court cases by making a change to the Illinois smoking ban. Now, violations of the ban will be civil rather than criminal offenses and will be handled by the Illinois Department of Public Health. The bill also includes certain exemptions to the ban and describes the processes for issuing and appealing tickets.
"Unity and harmony"
By Jamey Dunn
In a public gesture of bipartisanship, all four legislative leaders met with Gov. Pat Quinn in his office Wednesday to discuss the problems facing the state.
The meeting itself was brief, under half an hour. Afterward, Quinn addressed reporters with House Speaker Michael Madigan, Senate President John Cullerton, Senate Minority Leader Christine Radogno and House Minority Leader Tom Cross. Before taking questions from the press, Quinn said that “we are going to be focusing on unity and harmony today.”
Quinn did not give specifics on how Illinois would address its budget deficit. He said a gasoline tax increase, which already has been proposed in HB 1, was not going to be ruled out. He also said it is very important that Illinois gets its “fair share” of the federal economic stimulus plan, which is why he made a trip to Washington, D.C., Tuesday.
Senate leaders made another gesture of unity when they approved the resolution, SJR 1, to create a joint bipartisan committee on ethics reform. The resolution went forward with the understanding that the House would amend it to allow Radogno to appoint more members. As written, Cullerton would be allowed to appoint six members and Radogno four. She argued that ethics reform will require true bipartisanship, and Cullerton said he was open to having more Republicans on the committee.
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