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A budget-cutting outline

Monday, Mar 3, 2014

* Kurt Erickson follows up on a story I posted for subscribers last week about a memo outlining a budget cutting framework for the spring session

The state’s public universities would see a $248 million reduction while public safety agencies such as the Department of Corrections and the Illinois State Police would see a $303 million cut. […]

State employee health insurance costs, for example, are expected to rise by more than $600 million next year. Medicaid, which provides health insurance for the poor, is expected to jump by about $211 million.

For top agency officials and university presidents, the document, if adopted as a budgeting map by lawmakers, is the exact opposite of what they say they need to operate.

Last month, the Illinois State Board of Education approved a proposed budget calling for a $1 billion increase in spending designed to reverse years of declining dollars from the state. According to the memo, the amount of money being set aside for schools next year will be reduced by $967 million.

* The outline is here [Fixed link]. From my Friday piece

* $2.4 billion will have to be cut from discretionary spending, according to the agreement. That’s lower than Senate President John Cullerton’s original estimate because of higher than expected revenues. However, overall revenues are still expected to drop by $965 million, due to the half-year partial expiration of the income tax hike.

Mandated expenditures (pensions, health insurance, debt service, Medicaid, etc.) will rise by $1.4 billion, so other programs have to be cut.

* That translates into a $719 million cut to Human Services, a $967 million slash of K-12 education spending, a $248 million hit to higher education, a $303 million drop in public safety spending and a $144 million cut to General Services.

Whew.

* Related…

* Civic Federation: Keep most of Illinois’ ‘temporary’ income tax hike: As the candidates for governor dance around Illinois’ shaky finances, the Civic Federation has plunged into the fray, proposing that the state retain most of the “temporary” income tax increase, according to a report issued today by the government budget watchdog.

- Posted by Rich Miller        


43 Comments
  1. - 47th Ward - Monday, Mar 3, 14 @ 12:08 pm:

    ===That translates into a $719 million cut to Human Services, a $967 million slash of K-12 education spending, a $248 million hit to higher education, a $303 million drop in public safety spending and a $144 million cut to General Services.===

    Say what you will about Laurence Msall, but he understands math. Those cuts are unacceptable.

    Anyone who says the temporary tax hike can expire without unthinkable consequences is either stupid or lying.


  2. - Very Old Soil - Monday, Mar 3, 14 @ 12:14 pm:

    Rich,
    Link to outline doesn’t work.


  3. - Rich Miller - Monday, Mar 3, 14 @ 12:20 pm:

    Fixed link.

    I’m having a very difficult late morning/early afternoon. A nap may be in order.


  4. - Dan Johnson - Monday, Mar 3, 14 @ 12:24 pm:

    “State employee health insurance costs, for example, are expected to rise by more than $600 million next year.”

    WOW

    That’s crazy expensive.


  5. - Capitol View - Monday, Mar 3, 14 @ 12:25 pm:

    give back 1/2 of one percent to the voters of Illinois, and make the rest of the tax increase permanent. Any other solution is both governmentaly and politically unacceptable.


  6. - Precinct Captain - Monday, Mar 3, 14 @ 12:52 pm:

    ==give back 1/2 of one percent to the voters of Illinois, and make the rest of the tax increase permanent. Any other solution is both governmentaly and politically unacceptable.==

    Why would it be governmentally unacceptable? It seems there are plenty of places that could use the money, education for one. Why would we want to be Mississippi when we can be Massachusetts?


  7. - Toure's Latte - Monday, Mar 3, 14 @ 1:02 pm:

    It will be fun to watch those who insist the tax be rolled back, a popular election cry of the right, squirm as they try and come up with logical ways to do it.

    Even keeping most, or all, of the income tax rate intact, there will be painful decisions made.


  8. - Union Man - Monday, Mar 3, 14 @ 1:03 pm:

    K-12 education will be devastated if they lose almost a billion dollars!! The General Assembly over the past 30 years has overspent and waste more money and this is costing us dearly!! They have got to go!!


  9. - Anon - Monday, Mar 3, 14 @ 1:22 pm:

    It’s good to see someone being responsible, since most of the pols from both parties aren’t. Even Republicans don’t want to make such savage cuts, while Dems who support them would lose their souls.


  10. - Jimbo - Monday, Mar 3, 14 @ 1:23 pm:

    Those numbers are staggering. Completely unnacceptable. Congrats everyone on keeping their two percent, you get what you pay for. The cuts to LE and DOC are crazy. I personally don’t agree with the Human Services cuts, but I can see how some would think they are appropriate. I cannot fathom how anyone could argue for public safety cuts. I’d rather be safer than two percent richer.


  11. - Gathersno - Monday, Mar 3, 14 @ 1:25 pm:

    There is no way the tax extension can’t be enacted without devastating cuts to the programs that are high priority on everyone’s list.


  12. - Anonymous - Monday, Mar 3, 14 @ 1:27 pm:

    At least the state troopers have the luxury of asset forfitures finders keepers losers weepers. they have never done wrong.


  13. - independent - Monday, Mar 3, 14 @ 1:31 pm:

    Its more evidence why a rational progressive income tax and a service tax is needed. Lets modernize out revenue side.


  14. - Tom Joad - Monday, Mar 3, 14 @ 1:43 pm:

    It looks like there will be no new programs or expansions of existing programs. So much for the pension theft bonanza for the budget.


  15. - Demoralized - Monday, Mar 3, 14 @ 1:49 pm:

    ==So much for the pension theft bonanza for the budget.==

    That hasn’t been going on for a few year now. The “pension theft” of the past was spent long ago. The pension payments have been made over the past several years.


  16. - Anonymous - Monday, Mar 3, 14 @ 2:00 pm:

    Wait and see what happens to state finances, when the pension reduction law is ruled unconstitutional!


  17. - Anon - Monday, Mar 3, 14 @ 2:16 pm:

    People would die from such brutal cuts to public safety & social services. How many deaths would be an acceptable trade-off for the tax cut? Brady, Dillard & Rauner?


  18. - ejhickey - Monday, Mar 3, 14 @ 3:07 pm:

    from the link: “The Civic Federation also recommends that the state start taxing some portion of retirement income, a proposal likely to be opposed by senior citizens.”

    this is a change that is badly needed. whether any politician has the courage to touch this is another question


  19. - zatoichi - Monday, Mar 3, 14 @ 3:09 pm:

    Flip those Appropriations changes from $ to %

    Over all Cut - 17%
    Human Services - 16%
    K-12 Ed - 17%
    Higher ED – 14%
    Public Safety – 22%
    Gen Services - 15%

    Who is going to rationalize whacking these services by these percentages? How many hundreds of thousands of jobs are in those packs? It is easy to throw out a talking point on ‘waste’, ‘realignment of priorities’, and ‘run as a business’. These services are the businesses of the state. Want good employers? Kinda need good trained employees. Erickson talks about 2 state troopers on duty for a 7 county area. Universities need $1B, but would be cut $1B. Human Services - when jobs go away where to you think people in need turn to?

    Pull that Proposed Budget FY 14 vs. FY 15 into the next Republican debate. I want to hear their specific answers, not the usual ‘I have not had time…’, ‘get a blue ribbon panel’, or ‘we need to work together’ stuff. What specific steps would they take. FY 15 is here in 4 months. The screaming starts soon.


  20. - Jack Handy - Monday, Mar 3, 14 @ 3:11 pm:

    Spend until there is a crisis. Raise fees and taxes. Rinse and repeat.


  21. - the Cardinal - Monday, Mar 3, 14 @ 3:15 pm:

    So if these were Real cuts on the table and not the sacred cows, how much and from where is the real question?


  22. - Arizona Bob - Monday, Mar 3, 14 @ 3:15 pm:

    =K-12 education will be devastated if they lose almost a billion dollars!!=

    Actually they wouldn’t if the deduction is made from overfunded suburban school districts. There should be a “litmus test” for state aid based upon average staff salaries. State grants should be eliminated to disticts whose average teacher salary exceeds 20% above state average or that give unfair “end of career” raises meeting near sate limts to boost pensions. If they can afford to overpay that way, they certainly don’t need state help!


  23. - Anon - Monday, Mar 3, 14 @ 3:35 pm:

    AZ Bob’s bold proposal would spare poor districts from more draconian cuts. Alas, IL already has the nation’s widestt spending disparities between rich & poor districts, so savage inequalities don’t bother us.


  24. - Dan Johnson - Monday, Mar 3, 14 @ 3:37 pm:

    I’m still reeling over the cost of employee and retiree health insurance. This system is broken

    I’m glad the Civic Fed has floated ending the $900M exemption of pension income (public and private) from the state income tax. We shouldn’t tax the senior citizen who still needs to work while leaving those who are lucky enough to retire off the hook.


  25. - Demoralized - Monday, Mar 3, 14 @ 3:40 pm:

    ==So if these were Real cuts on the table and not the sacred cows==

    Ummm, these are real cuts. The breakdown is by major category.


  26. - Tom Joad - Monday, Mar 3, 14 @ 3:42 pm:

    Demoralized: I was talking about the current increases in spending proposed by Quinn, which he would pay for with pension savings. I don’t need your patronizing quote about the history of pensions over the last several years. Wake up.


  27. - YO - Monday, Mar 3, 14 @ 3:51 pm:

    Interesting read in the Sun Times today touting Chicago and Illinois as the “country’s leading metro market for new and expanded corporate facilities. Illinois and Chicago are among the top markets for corporations either expanding their offices or opening new ones”. According to the article, the Chicago-Naperville-Elgin area saw 373 new or expanded corporate locations in 2013–more than any other major city in the country. Huh?

    This information is in direct conflict with the outcry that Illinois is BROKE—that we are losing businesses left and right. I thought we were business Un-friendly? We are the up and coming Detroit is the rousing cry! Other than creating new businesses and jobs, which according to this article, we ARE–and better than any other major city in the country—-what else can a state DO to generate revenue for services to it’s citizens? Are all these miraculous business start ups/expansions paying zero taxes? Where is the revenue to the state? Of what benefit is it to a state to have a thriving business community? If businesses prospering in our state aren’t creating revenue for us, where should it come from? Who should it come from?


  28. - Demoralized - Monday, Mar 3, 14 @ 3:58 pm:

    ==I don’t need your patronizing quote about the history of pensions over the last several years. Wake up.==

    What was patronizing about it? I’m sorry if you find the truth patronizing. So bite me.

    And I have no idea what Quinn will be proposing because he hasn’t proposed it yet. I’ll reserve judgement until I see what he proposes.


  29. - Rich Miller - Monday, Mar 3, 14 @ 3:59 pm:

    ===I was talking about the current increases in spending proposed by Quinn, which he would pay for with pension savings.===

    There are no such increases and there will be no such pension savings in FY 15 budget.


  30. - YO - Monday, Mar 3, 14 @ 4:06 pm:

    As far as taxing retirement income, I’d support it if it included every and all retirement income. Social Security, IRA distributions, pensions,both public and private, etc.


  31. - steve schnorf - Monday, Mar 3, 14 @ 4:10 pm:

    no big surprises in any of this for anyone who has been paying attention


  32. - Secret Square - Monday, Mar 3, 14 @ 4:12 pm:

    “Illinois and Chicago are among the top markets for corporations either expanding their offices or opening new ones”

    A new corporate HQ or branch office doesn’t necessarily equal lots of new jobs. A corporate office could, for example, consist of nothing more than a CEO or a few current execs who moved from other cities (so those jobs are already taken) and hired or brought with them a few dozen assistants — again, not necessarily creating a whole bunch of new openings for local residents. Moreover, does the number of other jobs being lost (from small businesses, factories and other facilities that aren’t corporate offices, etc.) equal or exceed the number of these jobs being gained?


  33. - drew - Monday, Mar 3, 14 @ 4:18 pm:

    That does look like a 45% increase in group insurance costs…anyone know what’s driving that? Maybe a reduction in the unpaid claims backlog?


  34. - Anonymous - Monday, Mar 3, 14 @ 4:30 pm:

    Part of the Civic Federation’s proposal is to begin taxing retirement income, including Social Security.

    Heaven forbid we raise taxes on the wealthy. After all, someone with an annual income of $1 million, after paying their Illinois 5% tax will only have $950,000 to live on. Raising their taxes would cause them great hardship.

    The Civic Federation would like to instead tax the elderly on those Social Security and pension incomes of $24,000. After paying their 5% Illinois tax, they can live fine on $22,800.


  35. - Barney Fife - Monday, Mar 3, 14 @ 4:32 pm:

    PQ can’t blame this financial fiasco on prior administrations, a non cooperative general assembly, or the GOP. The downward spiral is all on his regime. The recent scandals of several Agency Director’s are a clear picture of this misguided administration.


  36. - Walker - Monday, Mar 3, 14 @ 4:47 pm:

    At least there are clear options spelled out by Civvies, and the arithmetic is correct. Like it or not, they provided something concrete to debate.

    Without proper arithmetic, you don’t have a plan, so don’t pretend you are proposing one.

    Even the anti-spend, anti-tax Civvies cannot rationally argue for letting the income tax rates sunset immediately, using arithmetic.

    Their “plan” is more than we have seen to date from any republican State Senator (candidates for Gov. included).


  37. - Formerly Known As... - Monday, Mar 3, 14 @ 6:09 pm:

    === It will be fun to watch those who insist the tax be rolled back, a popular election cry of the right, squirm as they try and come up with logical ways to do it. ===

    Don’t forget that also includes Mike Madigan, who proposes rolling back part of the tax hike for corporations but not individuals.


  38. - Anonymous - Monday, Mar 3, 14 @ 7:08 pm:

    STOP all the programs and provide only necessary services. Enough of the nanny state. We can not afford it. It really is that simple. For those who struggle with that. Look at the states that have a surplus and COPY them!
    What will happen? nothing. More new programs like free lip stick for the poor or maybe we can put in more speedcams to really increase the quality of life in our declining neighborhoods. What a joke this state is. It is not fixable and we will fail.


  39. - Anonymous - Monday, Mar 3, 14 @ 8:01 pm:

    ==STOP all the programs and provide only necessary services. Enough of the nanny state. We can not afford it==

    Illinois is already in the bottom three of all 50 states in total state expenditures per capita. The cuts being talked about will hurt necessary services.


  40. - YO - Monday, Mar 3, 14 @ 8:29 pm:

    ==Part of the Civic Committee’s proposal is to start taxing retirement income==

    The Civic Committee will throw everything/anything out there, along with the kitchen sink that will get peoples’ attention and focus AWAY from looking at eliminating corporate tax breaks, or seeking one more penny from business. Anything it takes to shine the light away from them. And, it’s working!


  41. - Anon - Tuesday, Mar 4, 14 @ 4:05 am:

    ==Even the anti-tax, anti-spend Civvies cannot ratiomally argue for repeal of the temp tax hike ==

    That won’t stop Rauner from irrationally arguing for repeal. Actually, the Civvies argument suggests the tax hike wasn’t so unjustified after all. Thanks to Walker
    and company who voted to provide the sorely needed revenue.


  42. - Generation X - Tuesday, Mar 4, 14 @ 8:55 am:

    One easy solution. Legalize Marijuana


  43. - State Retiree - Tuesday, Mar 4, 14 @ 12:35 pm:

    Don’t forget this is an election year. Scare everyone with deep cuts to basic services, PQ introduces budget with cuts restored and uses that to garner votes. It’s all smoke and mirrors budgeting.


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