* I, for one, believe that we should take the Illinois Policy Institute’s budget plan seriously. For too long, way too many Illinoisans have believed that the undefined “they” could simply cut governmental waste to balance the state’s budget. So, the “Institute,” in some ways, is doing us all a service by showing what will really happen if the budget is balanced without a tax hike, like tossing 600,000 people off Medicaid, or whacking university funding by a billion dollars and forcing school districts to pay a billion dollars a year in higher pension costs, etc.

Amanda Vinicky pursued another angle…

A [property tax] freeze, coupled with stripping municipalities of the 9-cents per dollar they’ve received since Illinois first implemented an income tax, would further strip localities of another key funding source. The IPI says it’s taking away a “subsidy,” but head of the Illinois Municipal League Brad Cole says that’s a misnomer.

“For many small communities, it’s the only source of income they have, so it provides for the health, safety and welfare of their residents,” Cole said. “It’s not as simple as saying ‘let’s cut the LGDF (Local Government Distributive Fund).’ I mean, that would abandon the entire state, whether it’s Cairo or Chicago.”

Additionally, the IPI wants to make it harder for units of local government to look to raise taxes in the future, by requiring referenda pass with a two-thirds majority before any hikes. […]

That would be a “heavy burden” and is “overly restrictive,” Cole said.

“What if a water treatment facility doesn’t get expanded, then the community can’t grow, or keep up to date with EPA (Environmental Protection Agency) regulation,” he said, as a hypothetical.

Cole needs to up his game, but at least it’s a start. Local reporters ought to call their mayors, school board chairs and university/college presidents to hear what they have to say, as well. And, you know, maybe talk to some people who got into Medicaid because of Obamacare and who would be facing a life without affordable or any health insurance.

People have seen what the impasse has done. But they have to understand that solving this problem is no easy or painless matter.

…Adding… The Center for Tax and Budget Accountability has a new report called “The all-cuts balanced budget for Illinois: 1/6 of K-12 funding gone, and billions in delayed pension costs”…

research suggests that these cuts would also have a devastating effect on the state’s economy. Partly, that’s because they would directly lead to thousands of lost jobs, as schools and colleges laid off teachers, janitors, counselors, and other employees. (To get a sense of the magnitude, $200 million in cuts led to 1,400 layoffs in the Chicago Public Schools in 2015; Chicago State University laid off 300 employees to save $24 million in 2016. Scaled up to the full statewide cuts, that would total nearly 20,000 lost jobs as a direct results of cuts in the education sector alone).

But education, in particular, drives Illinois’ economy in ways beyond the people that schools directly employ. In fact, economists have estimated that for each dollar invested in an institute of higher education, $2.286 is generated in the state economy, as students, professors, and other employees patronize local businesses, support families, and contribute to a vital local economy. That means that IPI’s proposed $950 million cut to higher education could result in over $2.17 billion in losses to the state economy.

More broadly, CTBA’s recent report on higher education funding highlighted research showing that over the last generation, investing in residents’ educational attainment has been crucial to robust state economies.

Additionally, copious independent studies have found that the Medicaid expansion under Obamacare has been a net positive for state economies. A study in Kentucky found that Medicaid expansion in that state generated 40,000 jobs; another study found that Medicaid expansion created 31,000 jobs in Colorado. Blending these estimates and adjusting for Illinois’ population, that suggests that IPI’s proposal on Medicaid alone could eliminate more than 95,000 jobs.

* The CTBA also looked at the “Institute’s” pension plan and discovered this…

While IPI’s plan costs less in the first few years — in part thanks to artificially lowered state payments from delaying the full implementation of changes to actuarial assumptions — within a decade or so, it actually becomes a net drag on the state budget, and continues to add billions of dollars in additional payments through the 2040s.

Chart…

       

29 Comments - PublicServant - Wednesday, Feb 1, 17 @ 10:59 am: Kinda like Brown did in California. - RNUG - Wednesday, Feb 1, 17 @ 11:03 am: Like I said yesterday, the pension plan is just Edgar Ramp v2. - PublicServant - Wednesday, Feb 1, 17 @ 11:06 am: So the IPI is “Kicking the Can down the road” just like conservatives are always saying about the Democrats. Their motivation, besides allowing them to “balance” their plan is that it gives the state more time to let the feds change the bankruptcy provisions for states. Lastly, IPI is Libertarian as well as being extreme ideologues, although Conservatism and Libertarians have a lot of overlap, ideologues apparently don’t subscribe to that anti-kick the can dogma. - Shemp - Wednesday, Feb 1, 17 @ 11:07 am: The problem is, we refuse to look at both sides. It’s either cuts and freezes to taxes, or reforms. No one seems to really advocate for both. Half the people dismiss the notion that prevailing wage changes or collective bargaining or further pension changes could save local governments money, so forget about it and let’s raise income tax and expand sales tax. The other half say any tax increase is crippling, so cut waste (which really means at the municipal level, cut back on police and fire at these dollar amounts). So disheartening knowing (first hand at local level) a fair bit of both is probably needed, but there is no substantive talk of a middle ground that is actually good for the long-term health, only middle ground that serves political interests. - Been There - Wednesday, Feb 1, 17 @ 11:07 am: ===More broadly, CTBA’s recent report on higher education funding highlighted research showing that over the last generation, investing in residents’ educational attainment has been crucial to robust state economies.==== And throw in scaling down our universities make them less desirable which in turn sends the students elsewhere. That is a lot of money being spent out of state that should be spent here. - Sue - Wednesday, Feb 1, 17 @ 11:08 am: The proposal is totally unrealistic, ignores the S Ct pension rulings and seriously is just a distraction. Illinois needs reform AND new revenue. - jerry 101 - Wednesday, Feb 1, 17 @ 11:10 am: All those cuts mean people lose jobs. Can Illinois afford to lose thousands of jobs? - Oswego Willy - Wednesday, Feb 1, 17 @ 11:12 am: To the Post, I was one among the voices that said “show the budget, Governor Rauner, with the tax rate as it stands, and balance that budget with the constrains of what is mandated already with the budgetary constrains”. I’ll I kept reading, be it from “ck” or quotes from Rauner himself was… “I’m willing to raise taxes…” Why is this so critical to this Post? 1) it’s a back-handed admission that Rauner knew he couldn’t balance the budget without it looking like this IPI wasteland. 2) Rauner knew putting his name to slashing, for example Higher Ed, by hundreds of millions isn’t something Rauner wants to own. 3) letting the state crumble upon its leg by the phoniness of “willing” to raise taxes, which realistically isn’t optional without a budget looking like the IPI proposal, helps in salvaging what “is left” by passively letting the IPI budget happen by doing nothing. So, Rauner refused to show a budget like IPI has so Rauner won’t own the weighing and measuring. Rauner purposely misled everyone (ha!) that revenue is always an option by embracing the IPI thinking, just never implementing it budgetarily. And, let’s be frank, doing the doable in the IPI manner here isn’t getting 60 and 30, so what IPI did do is force everyone, including Rauner, to look themselves in the mirror and ask honestly… “Is this the best we can do? We can’t serve this state better than this? Is this the budget the weighs, measures, reflects the priorities of the people of Illinois?” I thank IPI too. There can be things here for very serious discussion to get to the doable, but are those pieces together coining to be part of making this state and budget whole? Do the doable. Find where we as a state want to say are our priorities and weigh those with the dollars of commitment. That’s doing a service, that’s getting a budget, that’s having an honest argument to a budget. - OkComputer - Wednesday, Feb 1, 17 @ 11:16 am: This one has Century Club written all over it… - Mall - Wednesday, Feb 1, 17 @ 11:20 am: Small communities would not be affected by LGDF change: The state should end the state-local funding shell game that occurs through the LGDF. All LGDF distributions to counties and municipalities with populations above 5,000 should be ended. - CTBA - Wednesday, Feb 1, 17 @ 11:27 am: Isn’t Ralph all about re-amortization? Beyond the standard 30 years? - Anon221 - Wednesday, Feb 1, 17 @ 11:35 am: Mall- “All LGDF distributions to counties and municipalities with populations above 5,000 should be ended.” OK then… here’s are your cutoffs on Page 1 and the middle of Page 2. Think they will all agree to your proposal? http://www.togetherweteach.com/TWTIC/uscityinfo/13il/ilpopr/13ilpr.htm - siriusly - Wednesday, Feb 1, 17 @ 11:38 am: Brad Cole’s response is weak. If he doesn’t want his members to get cut he needs to do better: How about Police & Fire Brad? How about Roads and Bridges? How about life safety ? All the state highway maintenance that the state has delegated to the towns ? - Anonymous Lee - Wednesday, Feb 1, 17 @ 11:47 am: Let’s not give the IPI too many pats on the back. Kickin’ the can down the road on pensions isn’t exactly Truth in Accounting. - EVanstonian - Wednesday, Feb 1, 17 @ 12:16 pm: With this, did the IPI give an opening to a Democratic gubernatorial primary candidate the ability to tie the Speaker and Rauner up with one string? “Look, they’re both can-kickers. Vote for me, I am not.” Just saying, trying to find a way to bring together the large majorities of people who dislike both personalities might be a winning strategy. - Shemp - Wednesday, Feb 1, 17 @ 12:24 pm: === Mall - Wednesday, Feb 1, 17 @ 11:20 am: Small communities would not be affected by LGDF change: The state should end the state-local funding shell game that occurs through the LGDF. All LGDF distributions to counties and municipalities with populations above 5,000 should be ended.=== Do you just make stuff up as you type? Would love to know how many municipal budgets some of you have really examined to see how and where savings could be had to offset the loss of the LGDF. - City Zen - Wednesday, Feb 1, 17 @ 12:28 pm: ==for each dollar invested in an institute of higher education, $2.286 is generated in the state economy, as students, professors, and other employees patronize local businesses, support families, and contribute to a vital local economy.== No doubt that an extra dollar in a professor’s or employee’s pocket contributes to a vital economy. But if portions of that dollar is coming from every single taxpayer, the net effect is just the same. Funny how when a state employee spends a dollar, it creates a wonderful economy. However when I spend that same dollar, it apparently falls into the abyss. - Shemp - Wednesday, Feb 1, 17 @ 12:29 pm: ===- siriusly - Wednesday, Feb 1, 17 @ 11:38 am: Brad Cole’s response is weak. If he doesn’t want his members to get cut he needs to do better: How about Police & Fire Brad? How about Roads and Bridges? How about life safety ? All the state highway maintenance that the state has delegated to the towns ?=== Really, Cole gets some quotes excerpted in an article and he has a weak response? He didn’t write the article. Yeesh. Unfortunately, IML and its constituency doesn’t make campaign contributions, so there’s that when it comes to influence…. - NorthsideNoMore - Wednesday, Feb 1, 17 @ 1:14 pm: Cole needs draw battle lines. They need a war time consigliore this ain’t a game of appeasement. The 9 cents local gov gets from income tax is paltry to the scads of dollars they pay for the unfunded mandates forced down their throats by the state and the reduction in various other revenues. It in no way offsets those cash drains. - Blue dog dem - Wednesday, Feb 1, 17 @ 1:16 pm: Like this state, the city and county I live in can find some decent cost savings. Brad knows this. - Anon - Wednesday, Feb 1, 17 @ 1:46 pm: === tossing 600,000 people off of Medicaid === Let’s call a spade a spade: That’s class warfare. Our friends on the right are quick to label as class warfare any proposal to raise taxes on those who can most afford it. The term applies even moreso to those who would take away medical care from those who can least afford it. - Illannoyed - Wednesday, Feb 1, 17 @ 1:49 pm: - siriusly - Wednesday, Feb 1, 17 @ 11:38 am: Brad Cole’s response is weak. If he doesn’t want his members to get cut he needs to do better: How about Police & Fire Brad? How about Roads and Bridges? How about life safety ? All the state highway maintenance that the state has delegated to the towns? – Easy there big fella. This is an IPI proposal, not legislation teed up for passage through both chambers. No need for anyone to hyperventilate and go nuclear simply because an interest group publishes a report. If the legislative leaders announced a proposal to abolish LGDF, that’s another story. That’s not what this is. - Demoralized - Wednesday, Feb 1, 17 @ 2:01 pm: ==Like this state, the city and county I live in can find some decent cost savings.== He never said they couldn’t. Pointing out that the proposal isn’t reasonable isn’t saying you can’t do any cuts. - Anonymous - Wednesday, Feb 1, 17 @ 2:47 pm: ===Isn’t Ralph all about re-amortization? Beyond the standard 30 years?=== Ralph recommends a combination of reasoned, common sense approaches that utilize real numbers in pursuit of a real solution. Or as our Governor would say - No help at all. - Anonymous - Wednesday, Feb 1, 17 @ 3:26 pm: A plan that actually comes close to balancing the budget. Why not give it serious consideration. - CapnCrunch - Wednesday, Feb 1, 17 @ 3:41 pm: “…….economists have estimated that for each dollar invested in an institute of higher education, $2.286 is generated in the state economy……” That is true regardless of the source of the dollar. “That means that IPI’s proposed $950 million cut to higher education could result in over $2.17 billion in losses to the state economy.” Only to the extent that the institution cannot replace those $ with other funding sources. The UI has operated for years with declining State funding. It may be time to become a private school. - Shemp - Wednesday, Feb 1, 17 @ 4:26 pm: ===- Anonymous - Wednesday, Feb 1, 17 @ 3:26 pm: A plan that actually comes close to balancing the budget. Why not give it serious consideration.=== Um, shifting the deficit from the State to your city/school/county isn’t really a plan. That’s rearranging deck chairs…. - MyTwoCents - Wednesday, Feb 1, 17 @ 5:09 pm: Am I the only one who finds it interesting that IPI’s pension funding stays below COFGA’s line until 2022/2023 when Rauner would be finishing a potential second term? - Rayne of Terror - Thursday, Feb 2, 17 @ 8:18 am: Not just Obamacare, KidCare -> All Kids too. Before I worked for SenDems I was temping in 99 & 2000 at intake for KidCare when it was brand new. My job was transferring families who were on KidCare but qualified for Medicaid over to Medicaid. Those babies are adults now. Illinois has had expanded Medicaid for a generation. Sorry, comments for this post are now closed.