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Analysis: Budget hole tops $7 billion

Thursday, May 27, 2010

* As I told subscribers this morning, the Center for Tax and Budget Accountability has a new report out analyzing next fiscal year’s state budget. Here’s the meat…

That means the state will have to come up with at least $3.1 billion again next year just to keep the deficit at $7 billion. And that doesn’t include the pension payments. Oy.

More from the CTBA…

After all revenue sources, recurring and non-recurring are included, Illinois’s 2011 budget deficit is 26.7% of its General Revenue Fund. Consider that over 90% of General Funds are spent on four areas: Education; Healthcare; Human Services; and Public Safety.

The General Fund is the area of the budget that elected officials have the ability to manipulate. So, if the budget is to be balanced by cutting 26.7% of spending, these four areas, all of which provide critical services to Illinoisans, will be first on the chopping block.

Under the Emergency Budget Act the Governor has been given the authority to make additional cuts in two areas: “discretionary human services” up to $ 2.2 B, and “discretionary operational and state government” up to $ 1.2 B.

In the [current] FY 2010 budget, human services (including the Departments of Aging, Children and Family Services, and Human Services) were cut by $ 2.1 B (38%) from FY 2009.

* Speaker Madigan says he’s confident that Quinn can manage the budget situation

“We overspent,” Madigan said. “We took on too much and it’s legitimate to say we’ve got to reduce thresholds. Not nickel and dime stuff, but threshold questions: Can we afford this?”

Madigan acknowledged the budget passed by the House Tuesday evening “isn’t pretty” but said borrowing and giving Quinn the responsibility to allocate next year’s funds was the legislature’s best option facing a $13 billion budget deficit.

“There’s a built-in reason why (Quinn) will do a good job managing, because if he doesn’t it will reflect poorly on his performance and he’s a candidate in a few months for election,” Madigan said.

* The AP obtained a House GOP analysis which looks at the upcoming cuts

State support for education would drop about $585 million, or nearly 8 percent, according to a House Republican analysis. Higher education would see a 4.5 percent cut. The agency that provides medical care for the poor would be cut 10.7 percent. The Department of Children and Family Services would see a 28.7 percent reduction.

The education cuts will likely be less, however

Suburban school districts already strapped for cash are bracing for major state funding cuts unless lawmakers raise the cigarette tax or Gov. Pat Quinn can find money elsewhere.

An estimated $327 million would be cut from programs under a budget plan sent to Quinn this week. Special-education funding would be cut by about $246 million and transportation by about $81 million.

Quinn has vowed to use his budget cutting powers to preserve education funding, but that’s a tall order. And the cigarette tax hike is going nowhere fast in the House right now

State Rep. John Bradley, D-Marion, said he doesn’t like the idea of higher cigarette taxes, but remains open to the concept. With the legislative session winding down, however, and a handful of lawmakers already leaving Springfield, a vote doesn’t appear imminent.

“I don’t think there’s sufficient support for that,” Bradley said.

* And Rep. Karen May tried to walk back an inflammatory comment about state retiree health insurance premiums…

Proposing that state retirees not yet old enough for Medicare should pay a portion of their own health-care premiums, May said, “They need to feel the pain.”

“I would have, could have, should have, said, ‘We must all share the pain,’” May clarified Wednesday. “If it came out differently, I apologize.”

- Posted by Rich Miller        

38 Comments
  1. - wordslinger - Thursday, May 27, 10 @ 10:54 am:

    –“There’s a built-in reason why (Quinn) will do a good job managing, because if he doesn’t it will reflect poorly on his performance and he’s a candidate in a few months for election,” Madigan said.–

    Interpret that answer as you wish, lol.


  2. - Steve-O - Thursday, May 27, 10 @ 11:02 am:

    I think the main focus should be on Medicaid. That’s where the most savings can be had.


  3. - Oswego Willy - Thursday, May 27, 10 @ 11:10 am:

    Gov. Quinn, meet bus, bus … meet Gov. Quinn.

    Be careful what you wish for, sometimes, Guv., you want to share some pain …


  4. - MrJM - Thursday, May 27, 10 @ 11:15 am:

    The Leg should just ban red ink and minus signs — problem solved.

    – MrJM


  5. - Pot calling kettle - Thursday, May 27, 10 @ 11:20 am:

    Interesting comment from Rep. May considering her justification for being #3 in use of the state plane (after Madigan and Cullerton). From the Trib on May 25:

    ==May said she takes the state plane because of the toll it takes on her previously injured neck and shoulders to make the 3 1/2-hour drive or train ride to Springfield and then work a full day. “I would love nothing more than to have the trains be more reliable, but to take the train I’ve got to get up at 5 a.m.,” May said.==

    I need to gift my moniker to Rep. May.


  6. - Anonymous - Thursday, May 27, 10 @ 11:33 am:

    Why not competitively bid out every state job every year, instead of just blue collar contractor jobs?

    Why do we need regional superintendents with modern communication technology? Is it more important to educate kids or keep overpaying middle management?

    When are public schools going to do some fundraising/endowment campaigns to earn at least a small fraction of all they money taken? Why not at least ask alumni, parents, and local business for support instead of raising taxes on everyone? Is it really too much to ask schools to raise at least 10% of their own funding?


  7. - train111 - Thursday, May 27, 10 @ 11:40 am:

    Rep May’s retraction of her statement is a summary of the entire issue facing the state right now. Everybody has to share the pain, but nobody wants to–and every interest group in the book will be right there to tell you why somebody else should bear the pain instead of themselves.

    train111


  8. - Rich Miller - Thursday, May 27, 10 @ 11:41 am:

    ===Why not competitively bid out every state job every year===

    Does anyone, anywhere do this? I thought not. You keep mentioning this silly idea. It’s tiring.


  9. - Montrose - Thursday, May 27, 10 @ 11:43 am:

    *When are public schools going to do some fundraising/endowment campaigns to earn at least a small fraction of all they money taken? Why not at least ask alumni, parents, and local business for support instead of raising taxes on everyone? Is it really too much to ask schools to raise at least 10% of their own funding?*

    Do you have any idea what you are talking about? Parents, teachers, principals, etc. spent an inordinate amount of time raising funds to fill the holes in school budgets.

    Moreover, the attitude that the education of our children is only benefiting those with kids in the school, and not the community as a whole, thus the costs should not be spread across the community as a whole, is about as short sighted as they come.


  10. - Small Town Liberal - Thursday, May 27, 10 @ 11:55 am:

    - Why not at least ask alumni, parents, and local business for support instead of raising taxes on everyone? -

    People like you are unbelievable to me. I have no children, yet I don’t whine about my taxes funding children’s educations. You act like its only you paying taxes and these “alumni, parents, and local business” aren’t paying anything. Not to mention that local property taxes are a large part of school funding already. Get a clue, and maybe step down off that cross you’ve nailed yourself to.


  11. - Bobby Hill - Thursday, May 27, 10 @ 11:56 am:

    ===Do you have any idea what you are talking about? Parents, teachers, principals, etc. spent an inordinate amount of time raising funds to fill the holes in school budgets.===

    Mine didn’t. The one next to mine didn’t. The one next to that one didn’t. What did yours do? I will pass the suggestions along.


  12. - cassandra - Thursday, May 27, 10 @ 12:07 pm:

    A year or so ago, under the reign of Blago and the Dems, the union started representing not only frontline state employees but also middle management–most of those in the public service administrator classification. Under the state civil service rules, these employees had considerable job protections, far more than their private sector counterparts. But at least in theory, their (merit comp) raises were connected to their job performance. And it was slightly easier to fire them.

    Under Blagojevich and the Dems these former MC employees are now in the bargaining unit, which means that they get regular raises unconnected to job performance, and it is almost impossible to fire them. Many got huge raises as part of the switchover and they are now participating in the largesse of the current contract, which Blago and the union described, when it was signed, as the best contract in the country. It probably still is. Courtesy of middle class Illinois taxpayers whom Pat Quinn wishes to raid via his income tax increase in order to pay for all this. Whether the bulk of those taxpayers are getting raises or not.

    In 2012 the contract will expire and taxpayers
    will have a chance to decide how lavishly we want to increase the pay of state employees. Unfortunately, given Republican stumbles past and recent, it looks like Pat Quinn will be in charge of those raises, the same Pat Quinn who this year signed an agreement not to lay off any unionized state employees whatsoever, needed or not, until 2011, a year before the contract expires. One would expect him to continue that agreement to 2012 if he wins in the fall.

    So, Anon, the lesson here is that under the Democrats the state is going in the opposite direction from the concept of “bidding out” state jobs. We could probably get better incumbents for a lot less these days given the economic crisis.
    We are going in the direction of lush compensation packages and lifetime sinecures in state employment. An expensive prospect indeed.


  13. - Jeff - Thursday, May 27, 10 @ 12:16 pm:

    “We overspent” Madigan said. Explain to me again that this is a revenue problem and not a spending problem.

    How do we hold Madigan accountable?


  14. - Rich Miller - Thursday, May 27, 10 @ 12:19 pm:

    ===Explain to me again that this is a revenue problem and not a spending problem.===

    You are hearing only what you want to hear. Has anybody ever said there isn’t a spending problem here? But how many times do people like yourself say there is no revenue problem?

    It’s impossible to discuss anything with folks like yourself. Grow up, leave the bumper sticker slogans out of here, or go away.


  15. - Logical Thinker - Thursday, May 27, 10 @ 12:33 pm:

    Vicious cycle:

    -Bigger deficit equals…
    -Politicians freaking out equals….
    -Higher taxes, of course, which equals…
    -Workers and companies fleeing the state equals…
    -Even bigger deficits and more dire problems

    It’s really not hard to understand.


  16. - VanillaMan - Thursday, May 27, 10 @ 12:42 pm:

    “We overspent,” Madigan said. “We took on too much and it’s legitimate to say we’ve got to reduce thresholds. Not nickel and dime stuff, but threshold questions: Can we afford this?”

    This is exactly right, and this has been what critics have been saying for five years. This is what us conservatives have been saying. Now - read that again - this is what The Speaker is saying!

    We overspent over the past decade. We allowed our social programs to expand beyond what was smart. We gave social services to people who wouldn’t normally qualify for social services. We justified expanding social services without considering who was going to pay for those expansions.

    Michael J. Madigan agrees with us, not the hecklers who insist that those of us who want to cut, raise means testing levels, and point to the expansion of our social services as a core problem, are insensitive, shallow, anti-tax, selfish boobs.

    We have a spending problem. “We overspent”, says the Illinois Democratic Leader and Speaker of the Democratically lead Illinois General Assembly.

    Now let’s make the cuts. We have to reduce the size of our social programs. Not every “needy” person is as needy as pro-government supports wish us to believe. This will cause sacrifice - as big as the sacrifices from those not taking social services, yet feeling the pinch of fiscal reality.


  17. - Small Town Liberal - Thursday, May 27, 10 @ 12:52 pm:

    - Now - read that again - this is what The Speaker is saying! -

    You and the right wingers are the only people acting like anyone has been arguing that there wasn’t a spending problem.


  18. - Pot calling kettle - Thursday, May 27, 10 @ 1:25 pm:

    ==We overspent! We took on too much and it’s legitimate to say we’ve got to reduce thresholds. Not nickel and dime stuff, but threshold questions: Can we afford this?==

    This is meaningless pandering. The follow up question should be “Where and by how much?” The Speaker and his people know the budget backward and forward and should have answers at their fingertips. This overspending/underfunding is not news to any of them.


  19. - shore - Thursday, May 27, 10 @ 1:39 pm:

    There’s a story this week in the pioneer press about some funny business with a 3rd party candidate recruited to run against may who just happens to be a “fiscal conservative”. hmm…


  20. - Vole - Thursday, May 27, 10 @ 1:44 pm:

    “There’s a built-in reason why (Quinn) will do a good job managing, because if he doesn’t it will reflect poorly on his performance and he’s a candidate in a few months for election,” Madigan said.

    If this applied to all of our elected officials including Madigan, they would all be out of jobs right now. They threw away their mirrors several years back. They have no concept of reflecting badly because our broken electoral system just does not do what Madigan says it does. Are these guys just delusional or what? Quinn cannot manage this mess the legislature is handing him without it reflecting poorly on him but I predict he will get elected anyway considering the alternative.


  21. - Cincinnatus - Thursday, May 27, 10 @ 1:48 pm:

    Governor Chris Christie has managed to get his state deficit down to under 800 million (over two years, which he claims he knows how to fix) without a revenue (tax) increase. While the budget mess in Illinois is probably worse than that in New Jersey, Christie’s discipline shows that there is significant progress that can be made in the spending area.

    If Illinois politicians made the same good-faith efforts as Christie on the spending side, I am pretty sure that Republicans could entertain some revenue enhancement. If the tax increases were coupled to further spending cuts (done over time) and a HARD date on which the new tax(es) were sunset, there would be a mutually supportable plan to resolve the budget and debt crisis in Illinois. Even I, a strong supply sider, could accept this approach.

    Unfortunately, such a reasonable approach would take strong political leadership. I doubt we will have that in the foreseeable future.


  22. - fed up - Thursday, May 27, 10 @ 1:51 pm:

    Wow six years of complete Dem control have really done the state well. A big thank you to Madigan Cullerton, E Jones, Quinn and Blago. Cant wait to see how the situation improves under your leadership the next few months.


  23. - DuPage Dave - Thursday, May 27, 10 @ 1:51 pm:

    Cassandra- you are right about the PSAs now in the union. Some got a 30 percent raise- all for just showing up! Plus, they no longer are required to take furlough days like us poor, downtrodden SPSAs. So that’s a 4.5 percent cut being restored to the PSAs courtesy of Mr. Quinn.

    Re: bidding out state jobs. The procurement people wouldn’t be able to score the bids in under 9 months. Paying for only one quarter of salary per fiscal year would be a huge money-saver.


  24. - dupage dan - Thursday, May 27, 10 @ 2:14 pm:

    STL,

    You can claim that “right wingers” aren’t the only ones who have complained that spending is out of control. However, once the discussion moves to the specifics - which agencies, programs, entitlements that must be downsized or eliminated althogether that’s when we see the real problem. Across the board cuts are decried but when a single program or entitlement is identified then all the supporters and apologists line up with the arguments against any cuts in their vital program. Folk are brought in front of cameras with their compelling stories of loss and hardship. Hard for liberals to say no to such powerful symbols of people in need. And the spending continues.

    So, make your general statements if you wish. Time for talk is long gone. Time for little gestures (lower the mileage reimbursement from $0.50 to $0.38 - WOW - budget problem solved!) is OVER. At long last the big cheese says what is on the minds of so many in this state. That’s the easy part. Getting those used to being on the receiving end of such largess and those who can’t seem to say, “sorry, we can’t help right now” (and get their hands out of our pockets to pay for it) to realize and accept that things must change substantially before we can put this mess behind us is nigh unto impossible. And that means signficant cuts in programs and entitlements BEFORE there is talk of raising taxes to pay for the balance.

    That seems to be the reasonable thing to do.


  25. - Small Town Liberal - Thursday, May 27, 10 @ 2:48 pm:

    dupage dan - Spare me your long winded diatribes, I’m not defending the spenders, I’m just sick of the straw men.


  26. - dupage dan - Thursday, May 27, 10 @ 2:55 pm:

    STL

    The long winded diatribes seem to be in the majority in this stream. Maybe there is something to ‘em. Just sayin.


  27. - Small Town Liberal - Thursday, May 27, 10 @ 3:19 pm:

    I’ll tell the GA how much you like majorities.


  28. - Will - Thursday, May 27, 10 @ 3:36 pm:

    So all the anger over budget cuts will be directed at Quinn, while Madigan refuses to take the one action that will really solve the problem.

    It looks like Madigan is doing his best to hand Brady the election. It nearly worked in the primary.


  29. - wordslinger - Thursday, May 27, 10 @ 3:43 pm:

    – Why not at least ask alumni, parents, and local business for support instead of raising taxes on everyone? –

    You’re so right. The day you were born, your incandescence transformed the natural world into a wonderland, and it appeared for the first time just like you see it know to serve you.

    You’re like that dude in The Matrix. Or something.

    No one before you built it up. You have no responsibility to maintain anything, much less making it better.

    Why not close the schools as a bad investment? There’s nothing better for a society than a bunch of teenagers and 20 somethings having nothing to do all day long.

    You would probably be the top salesmen in VMan’s business of residential property with lousy schools. That’s thinking outside of the box.


  30. - wordslinger - Thursday, May 27, 10 @ 4:00 pm:

    I think some of you need to lighten up on Govs. Christies and Daniels. They’ve done taken some conservative, common-sense actions (remember when there were common-sense conservatives?

    But don’t ascribe miracles that aren’t happening. Real life doesn’t work that way.

    As Dennis Byrne pointed out the other day, Illinois tax revenue grew by 51% during the Blago Era. Was that because Rod was such a good governor? State government works within the parameters of the global economy.


  31. - wordslinger - Thursday, May 27, 10 @ 4:04 pm:

    –Time for talk is long gone. Time for little gestures –

    DD, you don’t want to go there, brother, unless John Galt has a nice little cabin reserved for you in the Rockies.


  32. - Rich Miller - Thursday, May 27, 10 @ 4:07 pm:

    ===Illinois tax revenue grew by 51% during the Blago Era===

    LOL

    Bunk.


  33. - wordslinger - Thursday, May 27, 10 @ 5:16 pm:

    I’m taking from this recent Dennis Byrne column:

    –According to the non-partisan Civic Federation, total Illinois revenues (inflation adjusted) have increased to $54.7 billion in fiscal year 2010, from $35.3 billion in fiscal 2001. That’s an astonishing 51 percent increase.–

    Pretty close to the Blago Era.


  34. - Rich Miller - Thursday, May 27, 10 @ 5:18 pm:

    Those aren’t all tax revenues. Much of that increase is from special funds. And don’t forget ARRA, Medicaid match, etc.


  35. - wordslinger - Thursday, May 27, 10 @ 5:41 pm:

    That’s cool. There certainly is a downturn revenue situation right now. My ultimate point was that at every level of government, business, and society, people want a lot of stuff but they dont’ want to pay for it.


  36. - steve schnorf - Thursday, May 27, 10 @ 9:55 pm:

    I also suspect Christie’s $800M doesn’t include his pension payment. If it does (remember ours this year would be almost $4B), his problem is not comparable to ours.


  37. - Springfield Watcher - Thursday, May 27, 10 @ 10:24 pm:

    The only problem with State Government is Springfield and I do’t mean the city. November and Term limits are the only real answer to our long term problems.


  38. - Anonymous - Saturday, May 29, 10 @ 3:07 pm:

    Hi Rich,

    Just because nobody else competitively bids tax funded jobs doesn’t make it silly, but perhaps there’s a real reason why competition to improve bang for the tax buck is bad? Obviously, this suggestion will never pass in the near future, but long-term it may become critical for our government to be more efficient and effective than China’s.

    Maybe competitive job bidding (submit salary requirements on resume, with minimum wage bottom) wasn’t needed when times were good, but times change.

    At some point the inventors and entreprenuers who actually improve our quality of life will wonder why they work so hard just to have half taken away, especially if that money is spent very inefficiently and/or for insider friends and family.

    The best way for our nation to compete in the future is to become far more efficient in business, non-profit, and government because the world knows our labor costs are very high, which suggests robots are our best hope for the future. Maybe then we can all retire early and let the robots do the work…if it’s sustainable.


Sorry, comments for this post are now closed.


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