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Magic beans for everyone!

Wednesday, May 19, 2010

* A series of press conferences by the Responsible Budget Coalition got quite a bit of media play

Illinois legislators should return to Springfield and not leave again without delivering a “responsible state budget,” according to the Responsible Budget Coalition, a group of teachers, activists, health advocates and civic leaders. The group held news conferences Tuesday in East St. Louis and in seven other cities


But the resounding message delivered by nine people including social services workers from various agencies and retired professionals was emphatic - Illinois lawmakers need to return to Springfield and produce a more responsible state budget to keep social service agencies intact for the clients they serve.

The message was delivered in a mannerly fashion during a news conference by Southern Illinois members of the Responsible Budget Coalition.

* The solution the coalition wants is House Bill 174, the tax increase which passed the Senate last year. But even Senators who voted for that bill will tell you that there are flaws which need to be addressed before it becomes law. Nobody really thought that thing would pass the Senate, so it wasn’t as meticulously vetted as it otherwise would’ve been. Some House Democrats, for instance, derided some of the bill’s new service taxes, including on diaper services.

The coalition also doesn’t want any more big cuts. From an RBC press release…

Coalition members note that, when legislators left Springfield, they were considering slashing more resources from schools, health and human services, public-safety efforts and other critical priorities that already have suffered brutal cuts this year.  These cuts would cost the state tens of thousands of local as well as state jobs – from teachers, police and firefighters to private-sector providers of mental health, care for seniors and the disabled, and other services that contract with the state. 

Trouble is, even if 174 passed the House and was signed into law, it would still not fill that huge budget hole. Big cuts would still be necessary, and big cuts will almost all have to come from “slashing more resources from schools, health and human services, public-safety efforts and other critical priorities.”

The hard truth is that there are just no magic beans for anybody in this mess. Coalition members sometimes get all misty-eyed when talking about 174, as if it will solve everything. But if the coalition wants to avoid deep spending cuts, it’ll need a much bigger tax hike than 174. Much. Some, not all but some, of the coalition’s leaders are not being fully honest with their members about this point. Don’t assume your problems will disappear even if your magic solution somehow becomes a reality.

* In other magic beans news, a group of state Senators has called on the new University of Illinois president to refuse part of his huge salary and freeze tuition instead. From a press release…

Students, faculty, staff and Illinois legislators—Senators Rickey Hendon, Kimberly Lightford and Marty Sandoval—call on incoming University of Illinois President Michael Hogan to freeze tuition and forego his $170,000 salary increase.

With a current Illinois budget deficit of $12.8 billion, the University of Illinois is imposing furlough days and layoffs on employees across the university system. The University Board of Trustees is also contemplating an increase in student tuition that would put the U of I tuition among the highest in the nation.

President Hogan should accept the same $450,000 salary as former Illinois President B. Joseph White; as a gesture of goodwill in this difficult economy. “Our hard-working members are asked to take pay cuts through furlough days and even accept layoffs. Sacrifice should start at the top,” said Christine Boardman, President of SEIU Local 73.

* Meanwhile, I told subscribers about this group last week

A group comprised mostly of suburban Democrats wants the governor to freeze millions worth of state contracts and explore other options rather than unilaterally cut spending if he expects their votes for a state budget plan.

The nearly dozen Democrats involved came together after budget plans pegged on borrowing were rejected by the Illinois House earlier this month. A teleconference Tuesday among the lawmakers was the latest action.

State Rep. Elaine Nekritz, a Northbrook Democrat, said those involved are trying to come up with a “doable” plan that could be unveiled in the coming days. Lawmakers are expected back at the Capitol next week for another run at the state budget. […]

State Rep. Carol Sente, a Vernon Hills Democrat appointed to the House late last year, said the goal is to get enough members on board to block approval of existing budget plans until better alternatives are offered.

“We need to flip our own party,” Sente told the Daily Herald.

They will make some inroads, but don’t expect them to push this thing into overtime.

* Related and a roundup…

* Open season on teachers: You will be used as a cop-out, an excuse to explain how this rudderless state of ours was steered into financial ruin.

* Cabbies urging Gov. Quinn to block a raise in airport taxi tax

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* Well-paid lawmakers not working hard enough

* Quinn reaching out to lawmakers over budget

* Illinois lawmakers think budget is near

* Union, service leaders ask legislators to raise revenue

* Kristina Rasmussen: State can balance budget without tax hike, borrowing

* Tim Davlin: Pension fix idea no help to taxpayers: While your editorial, “Pass a pension fix for police, firefighters,” is accurate in highlighting the urgent need for lawmakers to prioritize this critical issue, it fails to inform your readers of the significant tax burden they would be faced with if the state legislature passes House Bill 5873.

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* Poshard is confident in borrowing bill by July

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- Posted by Rich Miller        

  1. - Michelle Flaherty - Wednesday, May 19, 10 @ 11:50 am:

    The forgotten component of hb174 was $2 billion in cuts to be figured out by the the governor. And that was to balance the slightly smaller deficit last year.

  2. - Rich Miller - Wednesday, May 19, 10 @ 11:52 am:

    MF, yeah, I think we’re looking at another $2 billion or so on top of that now.

  3. - Montrose - Wednesday, May 19, 10 @ 12:05 pm:

    I agree that HB174 has become romanticized. Many people that are pushing it now forget their reservations with when it was still in play.

    Like you said, some coalition leaders are good at reminding people that HB174 is a piece of the fix, not the sole item, but I think that is getting lost a lot. Also, the nuanced message about HB174 being a decent framework to start from that could be adjusted has been lost as well.

  4. - Yellow Dog Democrat - Wednesday, May 19, 10 @ 12:08 pm:

    1. The Responsible Budget Coalition members have always acknowledged that cuts will be part of the solution: how deep is the question.

    2. According to the most recent Paul Simon Public Policy Institute poll, expanding the sales tax to include services is the most popular of all of the new revenue proposals. Does taxing diaper services seem like a political landmine at first glance? Maybe. But regular joes pay sales tax on diapers when they buy them at Target, so what is the real beef?

  5. - Rich Miller - Wednesday, May 19, 10 @ 12:11 pm:

    ===The Responsible Budget Coalition members have always acknowledged that cuts will be part of the solution: how deep is the question.===

    Have you talked to many of their members recently?

  6. - 47th Ward - Wednesday, May 19, 10 @ 12:15 pm:

    It’s easy to point to HB174 as the “cure” because it is the only tax bill that’s remotely viable. Quinn’s last two attempts have gone nowhere. The Senate sits back and points to 174 and says, “we’ve done our part.” So everyone who is pushing for new revenue is aiming their ire at the House for sitting on this.

    Yes, HB174 is flawed and is only part of the solution. But given how hopeless the situation is becoming, it is the only viable revenue generator on the table. Of course it gets held up as the answer. It’s hard to fault the activists for buying into the false hope of HB174. What else is there to rally around?

  7. - Montrose - Wednesday, May 19, 10 @ 12:16 pm:

    ===The Responsible Budget Coalition members have always acknowledged that cuts will be part of the solution: how deep is the question.===

    As the group has grown, message control has become more difficult. My hunch is you have social service agencies, for example, out there that have signed on to the coalition in recent weeks and are calling for no cuts in the name of the responsible budget coalition.

  8. - George - Wednesday, May 19, 10 @ 12:26 pm:

    Rich, you can do HB174 and then borrow for the pension and that avoids “slashing more resources from schools, health and human services, public-safety efforts and other critical priorities.”

    Not that they are arguing for that, but that is a way you can do it.

  9. - Rich Miller - Wednesday, May 19, 10 @ 12:44 pm:

    George, that gets us through one year. You gonna borrow every year?

  10. - unclesam - Wednesday, May 19, 10 @ 1:02 pm:

    Love the article briefly explaining the “what the legislature did and didn’t do” so far this session.

    The best is that the IL legislature DID pass a law stating that you cannot own a monkey, but DID NOT pass a budget.

    Still trying to read that without laughing.

  11. - steve schnorf - Wednesday, May 19, 10 @ 1:05 pm:

    And, Rich, that is a big piece of how we got here. That approach would simply institutionalize the structural imbalance in the budget at a higher level, and after a tax increase. People don’t seem to accept the fact that no matter how much you bring in, you can’t spend more than that on an ongoing basis. So would the solution be another income tax hike in 4 or 5 years? Fat chance!

  12. - cover - Wednesday, May 19, 10 @ 1:39 pm:

    The Illinois Policy Institute is still touting their “alternative”, which is different only in relying on a different variety of magic beans than the Responsible Budget Coalition.

    Since IPI’s website provides a link to their spreadsheet (with no sum formulas at the top - awful!), I went ahead and downloaded it. Their “solution” relies on $1.2 billion in “magic” savings in Medicaid, nearly $1 billion in cuts to Human Services, as well as nearly $300 million in further cuts to higher education (these are the biggest cuts vs. the Governor’s budget).

    As far as I can tell, IPI does not recognize the loss of federal revenue associated with those cuts to Medicaid and Human Services - and in light of federal health care reform, cuts to Medicaid of that magnitude are basically impossible to achieve.

  13. - siriusly - Wednesday, May 19, 10 @ 1:40 pm:

    I seriously think they should pass a resolution asking the Department of Revenue to produce a report about how to create Magic Beans. At least they could go home having done something!

  14. - siriusly - Wednesday, May 19, 10 @ 1:41 pm:

    If DNR needs help with the Magic Beans, they should call the RBC - those people seem to think they are real.

  15. - George - Wednesday, May 19, 10 @ 1:52 pm:

    George, that gets us through one year. You gonna borrow every year?

    You could for a few years, yes.

    Not saying I am advocating that, but it is possible to do without serious cuts to those other areas.

  16. - Easy - Wednesday, May 19, 10 @ 1:56 pm:

    I’m sure Carol Sente is going to “flip” her own party after Madigan dumped over $30k into her primary race a few months ago.

  17. - Rich Miller - Wednesday, May 19, 10 @ 2:08 pm:

    ===You could for a few years, yes.===

    And then you’re paying $4 billion a year in interest. Plus you still owe the $4 billion pension payment, which by then is much higher.

    Look, I understand the need for borrowing during a crisis. I just don’t think it should be a longterm plan, because it’s not a plan.

  18. - VanillaMan - Wednesday, May 19, 10 @ 2:12 pm:

    No one is going to completely agree with the solutions that will eventually pull Illinois out of fiscal calamity, but it is good to hear that this group is actively reminding us of the societal costs that will be exacted upon us with any solutions.

    There are no magic beans, just human beans.

  19. - Robert - Wednesday, May 19, 10 @ 2:24 pm:

    ===Look, I understand the need for borrowing during a crisis. I just don’t think it should be a longterm plan, because it’s not a plan.===
    Rich, who has / what is the best plan you’ve seen?

  20. - Rich Miller - Wednesday, May 19, 10 @ 2:27 pm:

    Robert, I have yet to see any acceptable, realistic do-able plan that fully explains all, or even most aspects. 174 leaves the big cuts unspecified. That’s not news because it’s not an approp bill. But there is not now and never has been a companion approp bill. It’s not a totally bad concept as it goes, but it’s far from complete.

  21. - RJW - Wednesday, May 19, 10 @ 2:44 pm:

    I know I’m veering off what everyone else is talking about but I just have to respond to this idea that the incoming U of I president is getting a $170,000 “raise.” The individual is NOT getting a raise. Yes, the prior incumbent got paid less, but that is not relevant to the incoming president. In fact, he is coming to the U of I at pretty much a flat salary from UConn (I think I saw it was a $5,000 raise). You pay what the market requires. From the stories I have seen the U of I gets off on the cheap for its president compared to other Big 10 and high-par schools. If you want the U of I to remain somewhat prestigious this is the price you pay. If you simply want it to be another quality state school then maybe you can pay less.

  22. - Ghost - Wednesday, May 19, 10 @ 2:57 pm:

    Let’s not forget that 174 implementation delay has cause a huge increase in debt with no corresponding revenue. While this increase reveneu goign forward, it was not enough to get us out of the prior hole, and we have dug that hole many times deeper.

    So any benefit from 174 has been overwhelemed by the delay. We needthe tax increase, but now we need more cutting and revenue beyound 174

  23. - wordslinger - Wednesday, May 19, 10 @ 3:39 pm:

    It seems basic, but like Edgar has said, you have to make some really hard cuts first, then you ask for money. That means cuts in K-12, health, human services, corrections, etc. The infuriating part is, like any unpleasant task, the longer we wait, the more it’s going to hurt.

  24. - Dan Johnson-Weinberger - Wednesday, May 19, 10 @ 4:13 pm:

    The best part of the answer is a progressive income tax. We don’t tax high income enough in Illinois. That’s where the money is.

    I know we’ve missed the deadline to put a constitutional amendment on the 2010 ballot, and maybe 2010 wouldn’t have been a great year to do it, but 2012 with Obama’s re-election is presumably going to be a good year for it. So I really hope in 2011 we put the amendment for a graduated income tax on the ballot.

  25. - Anonymous - Wednesday, May 19, 10 @ 5:29 pm:

    My organization belongs to the RBC, and it’s always been very clear to us - both my individual org, and the coalition as a whole - that you couldn’t raise taxes high enough (politically, anyhow) to avoid any and all cuts.

    We certainly don’t want more cuts, and we want to minimize cuts to the greatest degree possible - especially in programs that needy families depend on most. We know we can do some of that - averting at least some cuts - by doing something this state hasn’t tried in 21 years: raising the income tax.

    That would at least stop some of the bleeding, and help us to pay off some of the giant, 6-billion-dollar pile of bills that have become de facto cuts for most service providers.

    Many of us have already experienced 10%-20% cuts in FY 10, as it is. We don’t want to take on any more of that misery.

    But we’re not completely naive, either. We just wish state leaders would stop treating all of us - and all voters, too - as though we ARE all naive, by continuing to say no, no, no to the one commonsense option we haven’t gone to in a generation.

    HB 174 is no panacea, but it would be a hell of a lot better than what we’ve got now, which is squat.

  26. - Anonymous - Thursday, May 20, 10 @ 7:45 am:

    A correction in my earlier post: RBCers realize
    you couldn’t raise taxes high enough (politically, anyhow) to avoid all cuts. (Not “any and all.”)

  27. - Yellow Dog Democrat - Thursday, May 20, 10 @ 10:32 am:

    === Have you talked to many of their members recently? ===


    Yes, every day.

Sorry, comments for this post are now closed.

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