SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
*** UPDATED x1 *** More budget deets leak

Tuesday, May 27, 2014

* I told subscribers about this earlier today

Although the so-called “middle of the road” budget plan may be more palatable to election-minded lawmakers, the new approach nearly guarantees Gov. Pat Quinn will have to navigate some serious financial potholes as he runs the state and plots his re-election chances against Republican Bruce Rauner.

The proposal, for example, won’t account for rising wages, higher health insurance bills and other unavoidable cost increases in the fiscal year beginning July 1, meaning even a flat budget in some state agencies could still seem like a significant cut — especially once the temporary tax hike expires at the end of the year.

“It’s still going to feel very draconian,” said Rikeesha Phelon, spokeswoman for Senate President John Cullerton, D-Chicago. “The agencies will have their challenges.”

Without an increase to payroll and health insurance lines, the state may very well be forced to lay off workers.

Earlier this year, the Senate Democrats estimated that total “increased costs from legally binding personnel contracts” for next fiscal year would be $373 million.

*** UPDATE *** So much for that idea

A bid to fight obesity through taxing sweetened drinks lost its fizz Tuesday as a House committee rejected a plan that could have injected $600 million into the state treasury.

The measure, which failed by a 2-7 vote, would have charged a penny more per ounce on sweetened beverages, making a 2-liter bottle of soda cost about 67 cents more than its artificially sweetened, zero-calorie counterpart.

“I think the public policy initiative is good; I just think you’re really hitting the consumer with a substantial tax that, to me, is not consistent,” said Rep. David Harris, R-Arlington Heights, who voted against the legislation.

But state Rep. Robyn Gabel, D-Evanston, the sponsor of the sugar tax, said the difference in cost was necessary because it incentivized choosing the healthier drink.

- Posted by Rich Miller        


24 Comments
  1. - wordslinger - Tuesday, May 27, 14 @ 11:51 am:

    Here come the layoffs. That should be economics everyone can understand. Keep your head down.


  2. - Sir Reel - Tuesday, May 27, 14 @ 12:02 pm:

    I know Illinois has the lowest number of state employees per capita and personnel costs are a fraction of the State budget, but a one third billion dollar increase in personnel costs a year is not sustainable. Unfortunately any layoffs to downsize the State workforce won’t target the patronage positions that are not contributing.


  3. - Ghost - Tuesday, May 27, 14 @ 12:14 pm:

    Keep in mind this includes layoffs at revenue generating agencies, so they will need to reduce the budget more.

    Also since the pension system is kept afloat by using current worker contributions to help offset expenses, reductions in staff increase the burden on the State to cover this expense as well.


  4. - Norseman - Tuesday, May 27, 14 @ 12:22 pm:

    Nothing is sustainable if you act irresponsibly.


  5. - archimedes - Tuesday, May 27, 14 @ 12:22 pm:

    Sir Reel @ 12:02

    So - how is a $373 million increase in total personnel costs not sustainable? What % increase is that of total personnel costs? IS that a one time increase - or do costs increase to that extent each year?

    I get tired of throwing out absolutes like some cost is not sustainable.

    The General Revenue budget goes up about $1 billion a year (barring deliberate actions like not extending the income tax). This $373 million may not be a recurring increase into the future.

    The General Assembly has deliberately created an imbalanced financial system - blaming contractual personnel costs is a red herring.


  6. - Plutocrat03 - Tuesday, May 27, 14 @ 12:35 pm:

    Personel direct and indirect compensation tends to rise each year. e.g. raises and cost of insurance etc.

    It is most likely that the figure quoted is an annual increase.


  7. - Formerly Known As... - Tuesday, May 27, 14 @ 12:36 pm:

    This would be quite a disjointed approach to running things. Mr. Quinn already claims credit for ending the process of fund “sweeps” that Blago started in 2003 http://capitolfax.com/2011/10/28/supremes-to-ga-sweep-away-cogfas-advice-unclear-on-the-concept/ Supporting a funds “sweep” could be risky for him in that regard.

    As that story also notes, however, Mr. Quinn is open to “borrowing” from those funds. Doing so would be consistent with his prior comments and help avoid accusations of flip-flopping.

    Unfortunately, if we borrow money from those funds to cover our expenses now, the problem becomes doubly worse when we have to cover those same expenses next year while also repaying the money “borrowed” from those special funds.


  8. - Union Man - Tuesday, May 27, 14 @ 12:39 pm:

    I think we should pay all the members of the General Assembly, minimum wage as they provide minimal solutions to the states problems. If they were paid based on their merits, they’d be paying us to work there. Most are useless.


  9. - Formerly Known As... - Tuesday, May 27, 14 @ 12:42 pm:

    A shorter way of phrasing things is that I do not envy the Governor’s choice. Neither one is pretty for him should a funds sweep or fund borrowing wind up being “the plan”.

    He might be better off sticking to his guns publicly, advocating for the tax increase and then pleading he has no choice but to sign the bill if this is what the legislature sends him.


  10. - Anon - Tuesday, May 27, 14 @ 12:47 pm:

    == Unfortunately, if we borrow money from those funds to cover our expenses now, the problem becomes doubly worse when we have to cover those same expenses next year while also repaying the money “borrowed” from those special funds.==

    It’s a problem for the winner of the gubernatorial election because he is required to propose a balanced budget for FY 16.


  11. - Ghost - Tuesday, May 27, 14 @ 1:05 pm:

    On the soad thing, we dont need new taxes, we just need to staff up and enforce the taxes and fees we have.

    also we need to stop with the sin taxes! punishing people with taxes for behavior the government does not like is scary stuff. What if we tax all haircuts that are not a certain way, or if your busghes arent trimmed how we like you get a fee….

    this pavlovian use of taxes to direct behaviour is a horrible way to develop a tax code.


  12. - Arizona Bob - Tuesday, May 27, 14 @ 1:08 pm:

    =Earlier this year, the Senate Democrats estimated that total “increased costs from legally binding personnel contracts” for next fiscal year would be $373 million.=

    Seems like SOMEONE in Springfield did a lousy job of negotiating labor contracts if they gave these kinds of raises without funding available to do it.

    How does the GA square negotiating these raises when they didn’t have the money to pay for it?

    What am I saying? When does available funding EVER become a consideration in the GA and Guv appropriating spending? Just look at all the pork bills passed by the Dems a few weeks ago….


  13. - Just Observing - Tuesday, May 27, 14 @ 1:31 pm:

    === But state Rep. Robyn Gabel, D-Evanston, the sponsor of the sugar tax, said the difference in cost was necessary because it incentivized choosing the healthier drink. ===

    I beg differ over what is the “healthier” drink — for health purposes, I would take a naturally sweetened soda over a chemically sweetened soda any day.


  14. - Anon - Tuesday, May 27, 14 @ 1:45 pm:

    Ghost - I think the difference is that many “vices” create negative externalities for society, unlike a haircut or shrubbery. Much like with smoking, drinking soda has demonstrably negative health effects, the costs of which are borne by society in the form of higher health care expenses. A “soda tax” or other such “sin taxes” are attempts to internalize those externalities, so that the person choosing to indulge in the vice is bearing the cost, rather than society at large.


  15. - Jimbo - Tuesday, May 27, 14 @ 1:46 pm:

    AZ Bob, that contract was a major win for the state. The contract provided no raise in the first year, followed by a raise of 2% in July of the next two. Additionally, employees pay a percentage of healthcare cost rather than the fixed amount previously agreed upon. By all means though, Bob, continue to opine on things you know little about from your ivory tower in the desert.


  16. - Formerly Known As... - Tuesday, May 27, 14 @ 1:53 pm:

    == It’s a problem for the winner of the gubernatorial election because he is required to propose a balanced budget for FY 16. ==

    It certainly is.

    “We” is meant in terms of us as a state, rather than any one party.

    Regardless of who the Governor is, fund borrowing would mean that next year Illinois must come up with either more money or even deeper cuts than we already do today. We would still have to address the same shortfalls we face today, plus pay back the “borrowed” money from those funds. It would delay making a decision, but it would also exacerbate the problem for next year.


  17. - Formerly Known As... - Tuesday, May 27, 14 @ 1:56 pm:

    == What % increase is that of total personnel costs? ==

    That’s a good question. I do not recall seeing a specific statewide line item for this in any of the budget docs or anything from CGFA, GOMB, etc.

    You would have to go through every agency and manually tally the numbers, wouldn’t you? Does anyone know a simpler place to find that figure?


  18. - DuPage - Tuesday, May 27, 14 @ 2:09 pm:

    “Borrow from these funds?” The best one I have heard all day. They “borrowed” from the pension funds for many years. The only difference I see is the pensions have constitutional protection, these other funds do not.


  19. - Newbie - Tuesday, May 27, 14 @ 2:11 pm:

    Thank you, Just Observing. Not enough people are pointing out the “health” aspect of this. Diet soda is not the healthier choice. Artificial sweetener is likened to poison and banned in many countries. It causes kidney stones, Parkinsons, cancer, etc. How about taxing the diet soda and hope people learn self control and drink the real stuff in moderation. That would be the “healthier” choice.


  20. - Norseman - Tuesday, May 27, 14 @ 2:26 pm:

    === … demonstrably negative health effects, the costs of which are borne by society in the form of higher health care expenses. ===

    There are very few things in a grocery store where this rationale can’t be used to justify taxes under this criteria. The same can be said of behaviors or lack thereof. Maybe you should be taxed if you fail to exercise for the recommended time.

    If revenue is needed, raise taxes. Just don’t try and convince me this is a more justified tax than any other.


  21. - Both Sides Now - Tuesday, May 27, 14 @ 3:03 pm:

    There has been study after study indicating that artificially sweetened drinks are just as bad or worse for you than those sweetened with real sugar. Therefore the logic of taxing “unhealthy” drinks sweetened with something real rather than artificial is flawed.


  22. - low level - Tuesday, May 27, 14 @ 3:05 pm:

    AZ Bob - you are one of the biggest fools ever to post here.

    State workers have a contract that provided one of the smallest increases in wages of any state in the nation. What’s the average increase each year? $20-50? Big money, for sure.

    Thanks to fanatical opposition to taxes of any sort, now there will be layoffs, which will result in the downward spiral described above (more unemployment claims, less people in revenue collecting agencies, etc).

    This is why I call people like you CONservatives. You are con artists. You want services but don’t want to pay for them.
    When I started out 20 years ago I could have a legitimate discussion with friends in the Edgar Admin over taxes, workforce levels, appropriate role of government.

    Those were conservatives in the truest sense of the word. People like you are radical — so far to the right you think any spending is wasteful, that govt workers should work for free, but God help us if roads have cracks in them. Prisoners excaping because DoC budget was cut?!

    Yes…but at least we got our income taxes to go back to 2011 levels, right? Yay! More of my own money to keep!

    Unbelievable.

    (P.S. Sorry if you need to delete this or if I have violated the guidelines, Rich - but this guy is a perfect example of why a very reasonable solution and compromise cannot be found, IMO).


  23. - Capitol View - Tuesday, May 27, 14 @ 4:39 pm:

    so the state is now doing to itself what it has been dinog to community based providers for years — pretending that a stable budget is not a cut.

    But the state can always have bake sales for itself, which I have believed was the state response to community based human services underfunding — no, wait, Sen Trotter made that unworkable, too.


  24. - steve schnorf - Tuesday, May 27, 14 @ 10:54 pm:

    in the word of a (slightly altered) old country song,
    Here we go down that wrong road again
    Goin’ back where we’ve already been
    Even knowin’ where it will end
    Here we go down that wrong road again

    Read more: Crystal Gayle - Wrong Road Again Lyrics | MetroLyrics


TrackBack URI

Sorry, comments for this post are now closed.


* Another angle on the IHSA lawsuit
* Was Rauner consultant behind anti-Schock ads?
* False equivalence taken too far
* The weekend in Facebook
* Subscribers Only - Events list (use last week's password)
* Question of the day
* Republicans look to the future
* *** UPDATED x1 - Beer tickets? *** OEIG: Rednour solicited a big gift, Bliefnick improperly accepted gifts
* Rauner investing heavily in campaign infrastructure
* Yet another stumble
* Yesterday's blog posts

Support CapitolFax.com
Visit our advertisers...

...............

...............


Search This Blog...

Search the 98th General Assembly By Bill Number
(example: HB0001)

Search the 98th General Assembly By Keyword

          
        * Yelp App Updated With Short Video Reviews
        * The evolution of the smartphone
        * iPhone 6 hardware upgrades, Moto/Google Nexus phablet, HTC One W8 & more – Pocketnow Daily
        * Smartphone giveaway: win a Huawei Ascend Mate2 4G LTE from Huawei and Pocketnow
        * Fitbit: New on Windows Phone 8.1
        * Facebook to Cut Messaging From Main App in Effort to Focus on Facebook Messenger
        * Cortana vs. Siri shown off on latest Microsoft ad

        * Rhapsody hits 2 million paying subscribers, thanks to Europe, LatAm… and Pandora?
        * Autonomous Truck Being Tested Out
        * Foxconn Chairman Hopes For iPhone 6 Production Run Smoothly
        * Bolt Messaging App Faces Name Issues
        * EU Approves Of Beats Acquisition
        * Amazon Fire Phone Touted To Cost 205 To Build
        * More LG G Vista Leaks Arrive

        * Podcast: Big Hurt, HOF
        * Frank Thomas lets it out, lets everybody in during Hall of Fame speech
        * This Week in White Sox Minor League Baseball
        * White Sox Minor League Update: July 27-Aug. 2
        * New draftee Rodon tops White Sox updated Top 20
        * White Sox focused on long-term at Trade Deadline
        * White Sox focused on long term at Trade Deadline


        Main Menu
        Home
        Illinois
        YouTube
        Pundit rankings
        Obama
        Subscriber Content
        Durbin
        Burris
        Blagojevich Trial
        Advertising
        Updated Posts
        Polls

        Archives
        July 2014
        June 2014
        May 2014
        April 2014
        March 2014
        February 2014
        January 2014
        December 2013
        November 2013
        October 2013
        September 2013
        August 2013
        July 2013
        June 2013
        May 2013
        April 2013
        March 2013
        February 2013
        January 2013
        December 2012
        November 2012
        October 2012
        September 2012
        August 2012
        July 2012
        June 2012
        May 2012
        April 2012
        March 2012
        February 2012
        January 2012
        December 2011
        November 2011
        October 2011
        September 2011
        August 2011
        July 2011
        June 2011
        May 2011
        April 2011
        March 2011
        February 2011
        January 2011
        December 2010
        November 2010
        October 2010
        September 2010
        August 2010
        July 2010
        June 2010
        May 2010
        April 2010
        March 2010
        February 2010
        January 2010
        December 2009
        November 2009
        October 2009
        September 2009
        August 2009
        July 2009
        June 2009
        May 2009
        April 2009
        March 2009
        February 2009
        January 2009
        December 2008
        November 2008
        October 2008
        September 2008
        August 2008
        July 2008
        June 2008
        May 2008
        April 2008
        March 2008
        February 2008
        January 2008
        December 2007
        November 2007
        October 2007
        September 2007
        August 2007
        July 2007
        June 2007
        May 2007
        April 2007
        March 2007
        February 2007
        January 2007
        December 2006
        November 2006
        October 2006
        September 2006
        August 2006
        July 2006
        June 2006
        May 2006
        April 2006
        March 2006
        February 2006
        January 2006
        December 2005
        April 2005
        March 2005
        February 2005
        January 2005
        December 2004
        November 2004
        October 2004

        Blog*Spot Archives
        November 2005
        October 2005
        September 2005
        August 2005
        July 2005
        June 2005
        May 2005

        Syndication

        RSS Feed 2.0
        Comments RSS 2.0
        WordPress

        Loading


        * Gov. Quinn says state EPA will block PCBs from .....
        * Sex trafficking survivor challenges hip-hop sta.....
        * Chicago aims to change view on prostitution - M.....
        * St. Clair County Board OKs medical pot farm in .....
        * Great grandmother asks for clemency from Illino.....
        * Alderman knocks Emanuel for not attending Shami.....


        * No bond for 2 Chicago men accused of shooting boy
        * APNewsBreak: Illinois: Doctor faked pot paperwork
        * Quinn says state EPA will block PCBs from landfill
        * Illinois fair managers fined for free beer tickets
        * Cool summer keeping West Nile in check in Illinois
        * Illinois communities scramble to find road salt
        * Illinois coal exports dip in 2013 after sharp rise
        * More Illinois state workers making over $100,000
        * Carpentersville man pleads guilty to bomb threats
        * Suspect killed after scuffle with Chicago officer

        * Illinois State Fair manager fined by ethics commission for accepting free beer tickets
        * Sangamon County on its own for road salt
        * Sangamon County on its own for winter road salt
        * Lawyers will push to speed up pension reform ruling
        * Quinn says state EPA will block PCBs from Clinton landfill
        * State appeals court upholds FutureGen power agreement
        * Concealed carry rules tough on out-of-state residents
        * Regulators say Illinois doctor faked pot paperwork
        * Quinn aide: Court rulings don’t jeopardize federal health-care subsidies
        * Illinois communities scramble to find road salt

        * Illinois regulators say suburban Chicago doctor faked pot paperwork
        * Road salt in July? Illinois towns scrambling now for winter supplies
        * Inspector General: Metra workers falsified time sheets
        * Southwest fined $12 million for flying airliners without making proper repairs
        * FAA proposes $12 million fine against Southwest over repairs


        * Man dead, off-duty police officer wounded in Bucktown shooting
        * A pardon for actual innocence Gov. Quinn should grant
        * Watchdog needs independence
        * Man dead, police officer wounded after shooting in Bucktown
        * A pardon for actual innocent Gov. Quinn should grant
        * 2 charged with attempted murder in shooting of 3-year-old
        * Photographer outraged at social media censoring of photos of moms, kids
        * Man accused of stealing kid’s bike charged with hitting dad


        * State watchdog faults Metra for falsifying work logs
        * State watchdog faults Metra for falsifying work logs
        * Father of boy who drowned at McKinley Park pool sues Chicago Park District
        * FOP seeks to halt release of internal police misconduct files
        * Jury acquits man in fatal shooting of former Simeon, Eastern Michigan football star
        * Motorcyclist, 23, dies during Schaumburg crash
        * Cops: Concealed carry permit holder shoots at armed robbery suspect
        * Man sentenced to 2 life terms for killing pregnant woman
        * Palatine man dies 10 days after altercation outside bar
        * E15 gasoline proposal goes nowhere at City Council hearing


        * Inspector General Finds Old Metra Practice Could Lead To Fatigued Conductors
        * State Fair Officials Fined For Violating Gift Ban...For Beer Tickets
        * Exoneree Diaries: "You've got anger issues, Dad."
        * Clout On The Business Side of Medical Marijuana
        * So, when is it Jane Byrne's turn?
        * State Police Cancels New Trooper Training, Citing Budget
        * Feds' Immigrant Numbers For Illinois May Not Tell Whole Story
        * Listen to State Week - July 25, 2014
        * Inspector General Discloses Political Hiring Investigation
        * Man Robbed By Fake Police On I-55


        * Sangamon County on its own for road salt
        * Illinois State Fair manager fined by ethics commission for accepting free beer tickets
        * Me Inc. offers plenty of dividends
        * Quinn says state EPA will block PCBs from Clinton landfill
        * Regulators say Illinois doctor faked pot paperwork
        * Illinois communities scramble to find road salt
        * New law expands state Holocaust Commission
        * Quinn, Rauner budget plans debatable
        * Angie Muhs: Who will be the next First Citizen?
        * Tony Leone: Put the ALPLM under federal control


        * Loren Tate: Illini need to catch Wildcats now
        * Collinsville Police accept MLK holiday
        * More Illinois state workers making over $100,000
        * Q-C's Johnny Lujack airlifted to Mayo Clinic
        * Residents oppose extending street to Savoy Walmart
        * Gifford OKs bus purchase, plans for bus barn
        * Illinois coal exports dip in 2013 after sharp rise
        * St. Clair County Board OKs medical pot farm in Marissa
        * Illinois communities scramble to find road salt
        * Former Du Quoin State Fair manager fined for violating gift ban provisions


        * Judge: Elgin Mental health escapee to get fitness test
        * Palatine man injured in assault outside bar dies
        * Boomers top Crushers 2-1
        * Rare storm at California beach hard to see coming
        * ‘Sharknado' sequel a must-see treat

        * Was Rauner consultant behind anti-Schock a...
        * A Bipartisan Argument for Full-Service Com...
        * Congressmen Hoyer and Schock introduce Com...
        * Full-service schools could benefit from le...
        * Schock helps introduce 'full-service schoo...
        * Schock and Hoyer Introduce School Bill - C...
        * Bipartisan House Bill Would Boost Communit...
        * House approves measures to reform housing ...
        * Schock sponsors charitable giving bill - P...
        * House Passes Schock Charitable Giving Meas...

        * Senator Durbin: State of Illinois Takes De......
        * Senator Durbin: State of Illinois Takes De......
        * Senator Durbin: State of Illinois Takes De......
        * Senator Durbin: State of Illinois Takes De......
        * Senator Durbin: State of Illinois Takes De......

        * Kirk speaks at rally: ‘In the Senate, we s......

        * New Progressive Political Group To Officially Launch In Chicago
        * Quinn To Participate In Minimum Wage Challenge
        * Poll: Madigan Slightly Ahead Of GOP Opponent In Attorney General Race
        * Meeting On Future Of Chicago's Dyett High School
        * Audience At Chicago Community Meeting On Future Of Dyett High School
        * Chicago Community Meeting On Future Of Dyett High School
        * Workers At Golan's Moving And Storage Company In Skokie Hit The Picket Lines For A New Contract
        * Report Says Surveillance Is Hampering Journalists
        * William McNary, of Citizen Action/Illinois, speaks Friday at a protest against Republican gubernatorial candidate Bruce Rauner
        * Roughly 100 people protested against a Republican gubernatorial candidate Bruce Rauner fundraiser on Friday


        * Hoy Op-Ed on Immigration
        * Governor Quinn Reminds Drivers to Take Caution in Work Zones, Directs State Agencies to Redouble Efforts to Protect Public and Workers - Encourages Public to Increase Vigilance Following I-55 Tragedy
        * Governor Quinn's Statement on the Unpatriotic Corporate Tax Inversion Loophole
        * Governor Quinn Statement on Eid al-Fitr
        * Regulators Charge Chicago Area Doctor with Cannabis Violations




            Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller