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Quinn wants to borrow $2 billion to snag increased Medicaid match

Wednesday, Mar 23, 2011

* He didn’t completely back off his $8.7 billion borrowing plan to pay off old bills, but Gov. Pat Quinn is now emphasizing a different proposal

Quinn said he is now focused on an “emergency” borrowing of “about $2 billion” to pay off health care debts.

The idea is to pay those who provide health care for the poor before July 1, when the reimbursement rate from the federal government drops and Illinois would lose out on millions of dollars. The short-term loan would be repaid using money from the recent income tax increase.

“We’re talking about roughly $175 million that we would leave on the table,” Quinn said.

State law requires that three-fifths of lawmakers vote in favor of borrowing proposals, which means that some Republican support is a must.

Quinn said he has approached Republican leaders with the idea, but said so far he has been “disappointed in them,” saying they are too busy playing political games.

The Medicaid borrowing idea isn’t exactly new, but you’d have to be a subscriber to know that.

* Despite his statements yesterday, Quinn clearly still supports the larger borrowing plan. Watch

* Meanwhile

The Teachers’ Retirement System, the largest and costliest of Illinois’ pension programs, is now almost $40 billion short of what’s needed to cover future benefits — the deepest financial hole in 20 years of state records.

Context

As it stands now, Illinois teachers get higher benefits, on average, than government retirees in most pension plans around the country, according to an analysis by the National Association of State Retirement Administrators. Illinois’ average teacher pension for retirees covered by TRS — about $41,000 — ranks seventh highest of the 101 major pension plans tracked by the association. Illinois pensions are not taxed by the state. […]

At the same time, TRS educators contribute 9.4 percent of pay for their pensions, which Illinois Education Association president Ken Swanson pointed out is high compared with contributions required around the country.

“We understand that, in these times, IEA members generally have good jobs with good benefits. We believe preserving these benefits is essential to attracting and retaining a high-quality workforce in every public school,” Swanson said in a statement provided to the Tribune.

TRS is now 48.4 percent funded, compared to 67.1 percent for the Chicago teachers pension fund. The difference? TRS relies almost solely on the state and teachers for its money, while Chicago’s system receives relatively few state dollars. Senate President John Cullerton wants Downstate and suburban districts to start kicking in a lot more cash, like Chicago’s district does, and his spokesman John Patterson makes a good point

“Suburban and downstate districts effectively set pensions by their salary decisions, but the state isn’t part of those decisions,” Patterson said, even though the subsequent pension costs are pushed off to state taxpayers.

* Related…

* VIDEO: Gov. Quinn on tuition increase and revenue projections

* Chicago-St. Louis fast-train project moves along: The governor milked the ‘fast train’ project for good news again Tuesday afternoon, announcing phase two of the $1 billion dollar effort to lessen the time it takes to travel by train between Chicago and St. Louis. And the supporters of the project, originally part of the Obama administration’s stimulus program, say it will create over 6,000 new jobs in Illinois.

* Illinois governor backs unions at UAW convention

* State legislators urge Quinn to look at Rockford to ease O’Hare congestion

* Study shows bridges in Illinois are deteriorating

* Pat Brady: State Dems must address spending

* Tax credit bill heads to Senate

- Posted by Rich Miller        

65 Comments
  1. - Cassiopeia - Wednesday, Mar 23, 11 @ 8:06 am:

    So bridges in Illinois are deteriorating and Quinn wants to spend transportation funds on high speed rail. Unusual priorities.

    Plus the Budget Office reportedly wants to sweep the road fund to pay operational expenses which will further disable IDOT from its core mission. Hannig was able to resist this but the new Secretary is unlikely to be able to resist the Governor’s office entreaties.


  2. - Sue - Wednesday, Mar 23, 11 @ 8:09 am:

    Way to Go Cullerton- first raise income taxes by 66 percent and then propose changes to pension funding to force a real estate tax increase on the School Districts- Why not find a way to save some money John?


  3. - Justice - Wednesday, Mar 23, 11 @ 8:16 am:

    I suppose Quinn had no idea this deadline was looming? Last minute planning, reactionary? Not a way to run any business in which you want to succeed.

    Sounds like the plan was to suggest where the tax increase was going at the time they were selling it, then switch after it was passed. The grand ole bait and switch.

    Poor or no planning, bait and switch…getting pretty close to gross incompetence and his elected term just started.


  4. - Excessively Rabid - Wednesday, Mar 23, 11 @ 8:26 am:

    Illinois average teacher’s pension seems kind of high. I wonder if the average is skewed by the amounts paid to those at the upper end. I would like to see the Bell curve for Illinois compared to those for other states. Like all else in Illinois, a large part of the problem may arise from those in a position of control milking the system.


  5. - dave - Wednesday, Mar 23, 11 @ 8:30 am:

    @ yvonnewells - that is some odd spam.


  6. - doubled - Wednesday, Mar 23, 11 @ 8:41 am:

    Agree Excessively. As a member of TRS my concern is the government is setting us up for a pension grab (aka sound like business). So I guess I now have to work until I die…glad to see that the government and business do not value my input into our state. Actions speak louder than words, so please save the hollow statements about how important education is to society. We are now a society of every man, woman, and child for themselves.


  7. - wordslinger - Wednesday, Mar 23, 11 @ 8:55 am:

    –bridges in Illinois are deteriorating and Quinn wants to spend transportation funds on high speed rail. Unusual priorities.–

    $42 million in state money leverages $1.2 billion in dedicated federal funds for rail upgrades. Only the most obtuse ideologues don’t jump at that deal. My guess is there are some bridges along the route, too.


  8. - Sue - Wednesday, Mar 23, 11 @ 9:21 am:

    One Constructive thing Quinn/Cullerton/Madigan could do immediately without implicating constitutional issues is to take a page from Cuomo’s book and legislate top salaries payable to school administrators- Superintendants and their staff wouldn’t get much public sympathy if their salaries were capped at a reasonable number($200K) which would favorably impact TRS and save school districts a lot of money statewide


  9. - Fed up - Wednesday, Mar 23, 11 @ 9:24 am:

    After Quinns childish behavior when the republicans proposed some budget cuts and Quinns track record of outright lies I would be surprised if the GOP answered the phone when he calls


  10. - Cincinnatus - Wednesday, Mar 23, 11 @ 9:27 am:

    “Quinn said he has approached Republican leaders with the idea, but said so far he has been “disappointed in them,” saying they are too busy playing political games.”

    Uhh, governing is like, umm, hard, huh Pat?

    During the lame duck session, Pat Quinn and the Democrats rammed through a series of measures without any input or concern for Republicans.

    After the election, Pat Quinn and the Democrats want to renege on previously made deals.

    After saying Republicans are devoid if ideas for months, Pat Quinn and the Democrats have not taken the Senate Republican proposals for spending cuts seriously, and are ignoring them (both the proposal and the Republicans) even as we speak.

    Pat Quinn and the Democrats, being in control for a number of years have yet to provide any proposal the balances the budget, even while enacting an enormous tax increase and borrowing scheme.

    While the Illinois electorate put Democrats back in charge of Springfield, they did not make that same choice in Washington. The people understand that unrestrained spending cannot continue, and the freshmen Congressweasels were able to start serious spending reductions, going as far as to buck their own leadership.

    With every day, we see another have baked scheme from Pat Quinn. After all the abuse heaped on the Republicans the lies and reneging, and given that Illinois citizens may understand budgeting to a greater degree than the elites believe, our boy Pat complains that he is receiving little support for his shotgun proposals. The only time Pat Quinn even considers Republicans is when he attempts to use them as cover for his failed policies and leadership.

    Pat Quinn has no plan. As the face of the Illinois Democratic Party, I pity other Democrats who must be sitting by and shaking their heads in wonderment as ole Pat brainstorms in public, whines, complains and negotiates in bad faith.


  11. - Fed up - Wednesday, Mar 23, 11 @ 9:28 am:

    As far as the teachers those are some nice pensions for working the shortest school day and school year in the country. Maybe the pensions would be understandable if they put in as much classroom time as other states not to mention European or othe developed countries. As it is now Illinois teachers get higher pensions for less work and poor results.


  12. - Ray del Camino - Wednesday, Mar 23, 11 @ 9:33 am:

    Don’t forget that Illinois teachers don’t get Social Security on top of their retirement benefits like those in many other states do.

    Btw, nice teacher-bashing there, Fed Up. I know teachers who work their butts off and get great results.


  13. - Demoralized - Wednesday, Mar 23, 11 @ 9:35 am:

    First of all, I’m not a teacher so I don’t have a particular personal financial stake in this. But, for those of you that believe $41,000 is a lavish pension I would like for you to tell me what you believe is a reasonable pension? $41,000 sounds like chump change to me - it probably should be more.


  14. - Sue - Wednesday, Mar 23, 11 @ 9:38 am:

    Fed-Up- classroom teachers did not cause this mess- it was the legislature in cahoots with the IEA and IFT along with a string of Governors who would never say no to benefit enhancements and early retirement programs which were never paid for/


  15. - Plutocrat03 - Wednesday, Mar 23, 11 @ 9:40 am:

    The rail upgrades will simply consume precious resources for a service generally rejected by Americans.

    Please point out a single passenger rail system of any kind that pays for its operational and cap costs out of the farebox. If there are none, then what will be the source of the new permanent revenue stream to support the system.

    The race for a fast choo-choo is a boondoggle of biblical proportions. It is a bridge to nowhere.


  16. - Cincinnatus - Wednesday, Mar 23, 11 @ 9:43 am:

    Fed up,

    Sit down a moment, you may not believe what i am about to say.

    I have little animosity toward teachers for their benefits. Teachers, like any other rational group, will almost always act in their own best interests.

    But let’s talk about their union a minute. Because of the monopoly of unions in the Illinois public sector in general, and teachers specifically we see these benefits. The inherent conflict of interest that a union has during its negotiation (using taxpayer funds to lobby elected officials who control the school boards) ensures that sweetheart deals will occur.

    A union member, while forced to joins a union, can opt out of paying for the political activities of the union. Ask a teacher how much that represents as a portion of their total dues, about $2 on $80 a month. And since money is fungible, there is no doubt in my mind that even if a member opts out, some portion of his remaining dues is programmed into politics, say by paying salaries of union officials, or for signs and such protecting “workers rights.”

    The only way to break this cycle is to decertify the teachers union and to open up the profession to non-union certified teachers.

    And let’s not even get started on the politically-correct education curriculum being foisted on our children by politicians and special interests groups. The programs “for the children” have diluted the time needed to teach our kids the skills they all need to succeed in a modern economy.

    One anecdote, in Wisconsin, the Teacher of the Year was recently laid off since she was a new teacher. Union rules, you know, last in-first out. Instead of being compensated for her efforts, and in spite of the example she sets for her peers, she was rewarded with a pink slip.

    I do not blame teachers as a group. They are greedy, but so is every other group one considers. It is human nature. But education is a topsy-turvy system that needs to change. NOW.


  17. - Fed up - Wednesday, Mar 23, 11 @ 9:46 am:

    Ray all I’m saying is that why are teachers in Illinois opposed to working as many classroom hours as say Houston or new York. Illinois teachers make well over the national avg. In pay but work well under the national avg in classroom hours. The kids are being cheated. This is not bashing this is a legitimate question. The children who attend the Chicago public schools k-12 will receive over 1 school year less classroom time than a child in Houston or New York and several years less classroom time than a child in Europe. Teachers love to claim how hard they work and I’m sure many do but they don’t work as hard as the rest of the countries teachers and they get better pay and pensions.


  18. - Secret Square - Wednesday, Mar 23, 11 @ 9:48 am:

    “a service generally rejected by Americans”

    Until gas hits $5 a gallon or higher, that is. At that point, long-distance expressways may become the “service generally rejected by Americans”.


  19. - Robert - Wednesday, Mar 23, 11 @ 9:52 am:

    @Cincinnatus 9:27am - I agree with most of your points regarding Quinn - his working title of his autobiography is “How to Lose Friends and Influence No One” - but on this particular issue, the financial payback of borrowing money in order to get higher fed funds is a no-brainer for the state; business owners big and small, who generally support republicans, would understand this, and I think you do too.

    Republicans refusing to engage is childish and bad for the state. I wouldn’t blame them for saying “we agree to the medicaid borrowing to get higher federal funds and will do so if we get a couple hours with Gov Quinn to go through our proposed spending cuts.”


  20. - Cincinnatus - Wednesday, Mar 23, 11 @ 9:57 am:

    SS,

    Realistically, it will be decades if not a century before the US transitions to a non-oil based transportation economy. I can envision a thriving local transportation system, but long distance consumer rail is a pipe dream. Unlike the tiny countries where rail works, the US just covers too much space. In addition, highways will always be needed to provide goods to where they are needed from where they are made.

    There is not a single example of a rail line in the US that can sustain itself without government subsidy. Even the Boston-DC corridor needs federal funds, and it is the area that most approximates places like Europe and Japan.

    Mass transportation is a laudable goal. It just doesn’t make any economic sense, now and for the foreseeable future. Until then, rail fits into my definition of a trait of a liberal:

    “No good intention goes unfunded.”


  21. - Fed up - Wednesday, Mar 23, 11 @ 9:59 am:

    Robert,

    I agree also the GOP should look into the borrowing as far as Medicare paybacks and the rest of the borrowing if it is cheaper than paying interest on the outstanding debt. That being said the GOP needs to get a binding agreement that Quinn has no control over the money he has proven time and time again his word means nothing. Any borrowed money should go right to those owed money no wiggle room for Quinn to” reconsider ” how he wants to spend the funds.


  22. - wordslinger - Wednesday, Mar 23, 11 @ 10:00 am:

    –Please point out a single passenger rail system of any kind that pays for its operational and cap costs out of the farebox.–

    I doubt if there is one in the world or ever has been. Yet they keep building them all over the world, for some wacky reasons, I guess. Must have something to do with facilitating commerce. I doubt if it’s charity.

    I’m pretty sure that I-57 from Cairo to Kankakee doesn’t pay for itself through gas tax revenues generated. There are thousands of miles in similar operating deficits on the Interstate Highway System.

    Since those stretches can’t support themselves operationally, perhaps we should let this biblical boondoggle revert to the tumbling tumbleweeds.


  23. - RetiredStateEmployee - Wednesday, Mar 23, 11 @ 10:02 am:

    Plutocrat03 - “Please point out a single passenger rail system of any kind that pays for its operational and cap costs out of the farebox”

    Please name a highway that pays for its operation. Transportation is more complicated than just highways. Many highways are already overcrowded. Imagine the congestion if it weren’t for the freight and passenger rail systems already in place. With more demand, rail is one of the most efficient systems. I don’t believe passenger trains will ever pay for themselves but the roads don’t either.


  24. - Cincinnatus - Wednesday, Mar 23, 11 @ 10:04 am:

    Robert,

    The leveraged federal aid is a long-term financial trap. Eventually, the federal aid runs out or is no longer authorized, at which time the State is on the hook for the whole nut.

    As far as Republicans refusing to engage, I sure wouldn’t (This stand explains a lot about why I can never run for office. as an Italian, I remind you that vendetta is an Italian word.) Behind the scenes is where all the action should take place for no. I would not recommend any public support for Quinn until he starts negotiating in good faith and earns my trust. Until then, I do think Republicans can help their cause by more proposals like the Senate Republican budget. Eventually, a critical mass of proposals can be seen by the public. Election season is less than a year away.


  25. - Cincinnatus - Wednesday, Mar 23, 11 @ 10:08 am:

    wordslinger

    “Since those stretches can’t support themselves operationally, perhaps we should let this biblical boondoggle revert to the tumbling tumbleweeds”

    Or turn them into tollways with a suitably adjusted fare.

    RetiredStateEmployee,

    Cargo rail is great. Most of the shippers make money and can contribute to the cost of right-of-way maintenance, and their burden should be scrutinized and adjusted as necessary.

    But you will not that we are never talking about cargo, we are always talking about high speed passenger rail which is the boondoggle that sticks in many conservatives’ craw.


  26. - Wondering - Wednesday, Mar 23, 11 @ 10:11 am:

    I’ve never understood how TRS became an Illinois pension system in the first place. We are not talking URS here but private teachers. I know the IEA and IFT give big donations every election maybe the answer is that simple but does anyone know how private employees got a state pension. I am not bashing teachers I just never understood this.


  27. - Sue - Wednesday, Mar 23, 11 @ 10:23 am:

    Wondering_ What are you talking about- teachers are public employees- A better question though is why employees of the IFT are in TRS- They are definitely private employees


  28. - Responsa - Wednesday, Mar 23, 11 @ 10:25 am:

    ==the financial payback of borrowing money in order to get higher fed funds is a no brainer==

    Maybe to you it is a no brainer. But the state borrowing billions so it can supposedly reap more billions from the federal government which would also have to borrow billions to finance the billions of “funding” it “gives” back to the state does not look all that smart to many people–and that does not make them all obtuse ideologues. (Word’s term.)


  29. - Six Degrees of Separation - Wednesday, Mar 23, 11 @ 10:28 am:

    Sue-

    Wondering’s question is not a bad one. City and county employees are public employees too, but they are IMRF members, not part of the state retirement system.


  30. - wordslinger - Wednesday, Mar 23, 11 @ 10:29 am:

    –Or turn them into tollways with a suitably adjusted fare.–

    That would certainly help accelerate the economic collapse of rural America. I think I’ll stick with Ike’s vision of the interstate highway system, based on it’s extraordinary contributions to economic growth through efficiency and mobility.


  31. - ZC - Wednesday, Mar 23, 11 @ 10:32 am:

    Cincinnatus,

    You propose that at least some of the interstates be turned “into tollways with a suitably adjusted fare.”

    However, if you did that, I’m pretty sure that consumer interest in high speed rail would pick up.


  32. - piling on - Wednesday, Mar 23, 11 @ 10:33 am:

    Sue,
    Wondering has a good question. Missouri teachers are public employess but not state employees. Their pensions are funded same as CPS — locals and employees.
    Exactly how did local school employees become a state pension responsibility?


  33. - wordslinger - Wednesday, Mar 23, 11 @ 10:43 am:

    Responsa, as I wrote, I was referring specifically to $42 million in state trans funds to leverage $1.2 billion in dedicated federal rail funds. Nothing at all to do with any borrowing plan.


  34. - Six Degrees of Separation - Wednesday, Mar 23, 11 @ 10:48 am:

    As in most things, the high speed rail issue has no simple answers. When gas hits $5 a gallon, it’s not like there will magically be a network of high speed trains that pops up and takes you wherever you want to go. To replicate the US interstate system with a network of high speed passenger trains would probably take a few trillion $ and 50 years of environmental studies and construction, so be patient. I am a supporter, BTW.

    In the meantime, if every new car buyer in the US bought a Chevy Volt or Nissan Leaf over the next ten years, it would probably do 10x (or 100x) more for reducing oil consumption than all the potential high speed trains, combined.

    Toll roads generally pay for themselves. The IL tollway system receives no outside federal support or direct state support, and many cars and trucks use them with fuel taxed for other uses that doesn’t get recaptured by the toll system. Other roads need subsidies; state roads don’t get much funding from sources outside gas taxes and license fees, but local roads are often heavily funded by property taxes and some motor fuel tax distributions. Then there’s the “externalities” argument…military protection of oil resources, yadda yadda. Although I often wonder what would happen if we were like China and just bought the oil at market price instead of trying to “protect” it.

    And if America followed the suggestion in efficient vehicle purchses, we’d have to find a way to replace the lost tax income. Public transit is dependent on federal fuel taxes and some state and local taxes ofn fuel, too.


  35. - These Foolish Games - Wednesday, Mar 23, 11 @ 10:56 am:

    Does anyone else believe the Republicans want the borrowing to pay their hospitals and universities in their districts? If this is the case then the 2 Billion plan is an interesting chance to call the bluff of no restructing–Because I believe the Republican districts want the restructing (at some amount large amount above 2 billion) as much as anyone who gives or recieves services on behalf of the state. It is an interesting dance: to want something but at the same time wanting to blame the other party for pushing for it, until the R’s are satisfied with the political points they may have scored and then they can go home to their districts and no their hospitals, universities and other local employers are still functioning.


  36. - Anonymous - Wednesday, Mar 23, 11 @ 11:07 am:

    ==The leveraged federal aid is a long-term financial trap. Eventually, the federal aid runs out or is no longer authorized, at which time the State is on the hook for the whole nut.==

    You don’t understand the way Medicaid works. In many federal programs you would be right. Eventually a federal grant would come to an end. But, with Medicaid we are talking about federal matching funds. The federal matching funds are available at a HIGHER rate now (until June). If we don’t get the federal dollars now we will never get them. There is no “trap” in this instance because the bills they want to pay already exist. Nothing new is being started here.


  37. - Demoralized - Wednesday, Mar 23, 11 @ 11:07 am:

    That was me above . . .


  38. - Cincinnatus - Wednesday, Mar 23, 11 @ 11:19 am:

    Demoralized,

    By taking that money, the state of Illinois commits to not reducing the number of Medicaid recipients thereby taking state Medicaid funding off the table in any attempt to balance the state budget.

    The strings attached to this funding preclude any meaningful state Medicaid reform.


  39. - Springfield Alum - Wednesday, Mar 23, 11 @ 11:54 am:

    Wondering, Sue, Piling On:
    There’s a simple explanation for why the various pension systems are considered state systems. Pension benefits for all public employees in Illinois have always been legislated by the General Assembly. Benefit increases have primarily been treated as the quid pro quo legislators and governors have given to unions in exchange for their support at election time. For the most part, little if any consideration has been given to how the state or local governments would pay for the increases.


  40. - Cincinnatus - Wednesday, Mar 23, 11 @ 12:00 pm:

    No doubt the Unions have had a great deal of influence in making the pension programs a state responsibility since if the pension remained a municipal obligation, the pensions would be subject to bankruptcy proceedings.

    Right now, the pensions are set a the only level of government that can neither declare bankruptcy nor print money.


  41. - wordslinger - Wednesday, Mar 23, 11 @ 12:07 pm:

    Cincy, you’ve finally revealed a program worthy of public spending — private schools.


  42. - Truth Seeker - Wednesday, Mar 23, 11 @ 12:08 pm:

    I still have to question whether teachers pay the 9.4%. The collective bargaining agreement in my district, and some others, say the “board” makes this contribution.

    Also, it is fairly easy for a teacher with 30 years to have an average salary, in four of their last ten years of employmen, that can be in the $80,000 to $100,000 range, providing a $60,000 to $75,000 annual retirement. For a private sector employee they would have to have a nest egg of $1.5 or $1.875 million, respectively, at a 4% annual return to equal the teachers pension. And, as we learned a few weeks ago, there is a teacher in the Springfield School District earning $142,000 annually.


  43. - cassandra - Wednesday, Mar 23, 11 @ 12:35 pm:

    Governor Pat still plans to borrow his way out of the state’s budget deficit, no doubt, but he has apparently decided he can’t do it in one fell swoop the way he and Vaught wanted to because the Republicans won’t let them. So the new plan will be do do it in stages. First, the Medicaid bills. If enough Republicans go along to pass that, then he and Vaught will create another fiscal “emergency” to get another 2 or 3 billion, and so on, up to 8, 9, or 10 billion, at high interest rates too.

    The Republicans should say no, not without verified cuts at each stage. This is the Governor Pat who claimed throughout his election campaign that he had made $3 billion int cuts. Turned out when the paperwork came in that it was only $1 billion-the rest were fund shifts and the usual smoke and mirrors accounting. This time the Repubs should insist on seeing the evidence before approving the cuts. Because this is not an honest administration.


  44. - 47th Ward - Wednesday, Mar 23, 11 @ 12:41 pm:

    ===at high interest rates too===

    But not as high as the interest we’re currently paying, right Cassandra? So isn’t this a bargain in comparison? What would a rational consumer do if given the choice between paying 24% per year v. 5-6% to consolidate our state’s credit card debt?

    I know which rate I’d choose.


  45. - Sue - Wednesday, Mar 23, 11 @ 12:42 pm:

    Truthseeker- forget about teachers making 100K- there are hunderds of administrators making multiples of that including suburban superintenants making 300k plus all of whom retire with pension costs exceeding what the highest paid teachers make in salaries- Governor Cuomo is tackling this with proposed legislation capping administative salaries while our Governor goes around with his thumb up you know where doing nothing to address the pension crisis- capping administrative salaries would be not only constitutional but would immediately help out with pension funding issues


  46. - titan - Wednesday, Mar 23, 11 @ 1:41 pm:

    “if every new car buyer in the US bought a Chevy Volt or Nissan Leaf over the next ten years, it would probably do 10x (or 100x) more for reducing oil consumption than all the potential high speed trains, combined”

    It would do wonders for all the source fuels that our power plants use (coal in Illinois, isn’t it - when it isn’t nuclear?).


  47. - Cincinnatus - Wednesday, Mar 23, 11 @ 2:15 pm:

    Just to add a bit to a point titan brings up, not only would additional electric cars further strain an already overloaded electrical generation system, electric car batteries need nickel, cobalt and manganese which are already strategic materials. We are trading “peak oil” (if you believe in the concept) for “peak lithium”, which using the same type of methodologies as peak oil have reserves that last until 2050.

    Lithium production is primarily in centered in Bolivia, Chile and China, so we will be trading one imported item (oil) for another. We are also just changing middle east dictators for left wing socialist or communist regimes.

    A robust recycling industry will need to be immediately developed (recycling is currently lacking in production capability, by years) or else lithium in landfills will potentially pollute area groundwater.

    Nothing is a panacea, I guess.


  48. - Six Degrees of Separation - Wednesday, Mar 23, 11 @ 2:17 pm:

    It would do wonders for all the source fuels that our power plants use (coal in Illinois, isn’t it - when it isn’t nuclear?).

    I usually see a lot of windmills on my journey to work, in addition to a nuke plant, a coal plant, and a NG-fired plant. Ah, the diversity.


  49. - Anonymous - Wednesday, Mar 23, 11 @ 2:21 pm:

    “- Cincinnatus - Wednesday, Mar 23, 11 @ 11:19 am:

    Demoralized,

    By taking that money, the state of Illinois commits to not reducing the number of Medicaid recipients thereby taking state Medicaid funding off the table in any attempt to balance the state budget.

    The strings attached to this funding preclude any meaningful state Medicaid reform.”
    Rich, is Cincinnatus correct in the above? If so, this seems a critical piece of information missing from both the Sun-Times and your own reporting.


  50. - cassandra - Wednesday, Mar 23, 11 @ 2:26 pm:

    It’s not a bargain if Governor Pat continues to spend lavishly, adds new programs and patronage jobs, and signs and rewards AFSCME with an expensive new labor contract, all paid for with billions in additional loans. The addtional monies the state is getting from our large income tax increase, which Governor Pat will try to make permanent, will all go to pay for the pensions.
    Take away the cuts he is so reluctant to make and you get massive loans we’ll be paying off for decades. That’s not a better deal.


  51. - Fed up - Wednesday, Mar 23, 11 @ 2:26 pm:

    I agree that teachers aren’t the cause of the pension problems. Teachers in Illinois get a very good pension although the avg pension is inflated by administrators being lumped in with them. No matter what though the school day and school year are to short and Illinois children are being cheated. Quinn has shown he is a pawn of the unions and the teachers union has shown it cares more about keeping Illinois with the shortest school day and school year than educating kids. Right now is the time to get the teachers to agree to do something crazy ( for them) work at least the national avg is classroom hours. If the teachers don’t want to do that then I can live with reworking their pensions. Illinois taxpayers are paying higher salaries for less work then most of the nation and the kids are getting shortchanged.


  52. - Demoralized - Wednesday, Mar 23, 11 @ 2:44 pm:

    ==The strings attached to this funding preclude any meaningful state Medicaid reform.==

    You can reform Medicaid all you want but it will not eliminate the billions of dollars in bills that are waiting to be paid. That is all the federal money they would be getting will be used for - to pay existing bills.

    Besides, no matter what people say there is no such thing as “meaningful” Medicaid reform unless you decide you are going to kick people off of Medicaid. This idea of managed care is a red herring. I’m not saying you can’t reform eligibility, but people should realize that the only real cost savings measure of any significance will involve less people getting healthcare.


  53. - Cincinnatus - Wednesday, Mar 23, 11 @ 3:13 pm:

    - Anonymous - Wednesday, Mar 23, 11 @ 2:21 pm:

    “As a condition of receiving the increase, states cannot reduce their Medicaid eligibility levels or use more restrictive methods in determining eligibility.”

    http://www.kff.org/medicaid/upload/7235-04.pdf


  54. - 47th Ward - Wednesday, Mar 23, 11 @ 3:25 pm:

    ===It’s not a bargain if Governor Pat continues to spend lavishly, adds new programs and patronage jobs, and signs and rewards AFSCME with an expensive new labor contract, all paid for with billions in additional loans.===

    Yes, and blah blah blah. You’re a broken record crying about bloated public union payrolls Cassandra. For once, please just try to stick to the topic at hand.

    How do you propose we pay for the medicaid debt we’ve racked up these past several years? Should we stiff the providers? Should we continue to pay 2% per month?

    Currently those unpaid bills are costing us 24% per year. I’ll make the math simple for you: assume it’s $1 billion owed for more than a year. The interest we’re paying is $240 million under your “don’t borrow - cut” approach.

    Under Quinn’s proposal, borrowing the same $1 billion at 6% costs us $60 million, an outrageous sum to be sure, but $180 million less than doing nothing, which is what you’re calling for.

    I don’t know about you and the Republicans in the General Assembly, but anytime you can find a way to save $180 million in a fiscal year, I’d take that approach in a New York minute. I still can’t believe Republicans are standing in the way of saving the state hundreds of millions of dollars. Whatever happened to fiscal responsibility?

    Now carry on with your never-ending tirade against public employees. I’m sure you won’t be persuaded by silly things like facts and logic.


  55. - cassandra - Wednesday, Mar 23, 11 @ 3:53 pm:

    I’d say public employees have done pretty well so far, especially the unionized ones, who make up the great majority in Illinois state govt. A no layoff agreement, substantive raises, and a governor who owes them his election. What’s not to like.

    I didn’t say Quinn shouldn’t borrow anything. I said he wants to borrow too much, borrowing is his budget plan, plus hoping the economy improves. He doesn’t want to make any cuts at all, and I believe he has acknowledged that some of the almost $9 billion he wants to borrow will go for operational expenses, not to pay down debt. Not only does he want to avoid any cuts and increase spending, he wants us to believe that borrowing and waiting for the good times is a viable fiscal plan. It isn’t.


  56. - Team Sleep - Wednesday, Mar 23, 11 @ 4:17 pm:

    Two points:

    1. High-speed rail would be awesome, but like everything else in Illinois and America, the cost overruns and graft - yes, let’s face it, that will always be prevalent in our state - would severely weaken the impact of the project. High-speed rail is turnign into a pipe dream and we are risking the loss of current and future funds whilst we piddle around and are indecisive.

    2. The Medicaid expansion under the ACA is not sustainable. That portion of the ACA needs to be repealed. I don’t care about the human aspect of Medicaid - Medicaid is a poorly run program and needs overhauled at the state and federal levels. CMS - Centers for Medicare & Medicaid Services, not Central Management Services - needs to revamp Medicaid if every state is essentially forced to expand its Medicaid numbers to meet ACA requirements. Either administrative costs need to be lowered or beneficiaries need to start paying a premium or a deductible needs to be instituted (similar to a spend-down but for everyone) or copays need to go up - or all of the above need to happen.

    This is what worried me about the tax increase and now the borrowing plan. Quinn wants to keep spending money and put up some serious funds for matching dollars. We are broke! What is, Pat? Do you want high-speed rail or Medicaid expansion? If Congress squeezes CMS funding of the ACA and Medicaid expansion, the choice will be clear. But we have to start prioritizing spending and projects.


  57. - justsickofit - Wednesday, Mar 23, 11 @ 4:36 pm:

    I agree with the Rockford legislators — stop the money to Peotone, bring more flights to Rockford, and get a train from Rockford to O’Hare, where folks, not just air passengers, can connect via the CTA to the city. Before high speed rail, let’s have some basic rail — Rockford to Chicago; Quad-cities to Chicago; Dekalb to Chicago.


  58. - wordslinger - Wednesday, Mar 23, 11 @ 4:48 pm:

    47, I feel for you, brother. Some of these finance wizards have obviously misplaced their crayons and something to write on.

    For the rest of us dopes, as distasteful as it might seem, borrowing at 5% from our patriotic, responsible and sober Wall Street investment bankers is preferable to borrowing at 24% for services already rendered from our shiftless, irresponsible, money-grubbing Illinois clinics, hospitals, doctors, Alzheimer’s units and nursing homes.

    In addition, those Illinois folks will get their money right away, and do crazy things like pay mortgages, pay taxes, buy cars, wackadoodle stuff like that.

    You can’t deny the math. We’ve already borrowing the money. The moves pay off those you owe, who happen to be citizens, for less. There’s a problem with that?

    I ascribe it to folks who believe running the state “like a business” means being a deadbeat. Believe me, they’re out there.

    Borrowing money for less and paying off Illinois vendors sooners is a bad idea? Responsa, I call obtuse ideologues on this one.


  59. - Judgment Day - Wednesday, Mar 23, 11 @ 5:48 pm:

    “..high speed rail, let’s have some basic rail — Rockford to Chicago; Quad-cities to Chicago; Dekalb to Chicago.”

    Now you’re into it. First off, both “Rockford to Chicago” and “DeKalb to Chicago” as local rail are RTA/METRA issues.

    You just kicked one over by this one. First off, DeKalb County and other outer Collar Counties decided way back when not to join up as members of the RTA (Regional Transportation Agency). Didn’t want to cost their taxpayers money.

    Short sighted? - well, probably yes. But it was their decision.

    Now, to really make it all work, you are talking about not only spending an enormous amount of money - just look at the costs and time required to extend METRA UP West line from Geneva all the way out to Elburn (that’s 2 new stops, about 11+ miles).

    Extending that same line all the way out to DeKalb / NIU (about 18 miles) would be at least 2 additional stops (1 right on the S side of the NIU campus, west side of DeKalb, and 2nd site probably right around Cortland on the East side/border of DeKalb County). A lot of money.

    And then you have the entire “Rockford to Chicago” run. That’s going to be a lot more money (far more expensive than the DeKalb to Chicago run, because that run is already double tracked and up to standards).

    And then (you missed one) there’s the I-80 Corridor run extending METRA through Grundy and LaSalle Counties all the way to LaSalle-Peru, with the terminus being a new secondary hub based in Joliet. That’s really SERIOUS money.

    Oh, and btw, you forgot the METRA extension from Aurora down through Oswego and down to Yorkville.

    The real problem is that the pipe dream of Pat Quinn for high speed rail is a real waste - if you really want to reduce auto traffic and commuting, concentrate on expanding the METRA runs to the outlying districts.

    But there’s a real issue there - doing so means that you are going to have to establish at least two “outer hubs” for METRA users - one likely in or around Elgin, and the other around Joliet. And that will be a fight to the finish between local governments.

    Nice idea, though….


  60. - Original Rambler - Wednesday, Mar 23, 11 @ 6:10 pm:

    My #1 Rant (Chicago taxpayer): These suburban and downstate school disricts have played the system for DECADES with their end-of-career raises that they knew would be paid - for the most part - not by the school district but by taxpayers Statewide. Now they’re crying unfair!?! Please! As far as I’m concerned, each school district should be responsible for their own pension obligations. Then you’ll see more responsible stewardship. I recall Rod getting some legislation passed back in 2004 which limited the abuse, but as far as I’m concerned it didn’t go far enough. You go, Sen. Cullerton. I don’t care about the fiscal pain these school districts will start to feel. It will just be a start in making up for the abuses of the past.


  61. - wordslinger - Wednesday, Mar 23, 11 @ 6:22 pm:

    –Now you’re into it. First off, both “Rockford to Chicago” and “DeKalb to Chicago” as local rail are RTA/METRA issues.–

    JD, what’s your point? The GA created the RTA boundaries and formulas and could alter them in a New York minutes. It’s not set in stone.

    And by the way, I grew up in DeKalb and Rockford, and I know why the powers that be back then opted out of commuter rail. It was not a secret. Well, that ship has sailed. The folks there now would welcome it.


  62. - soccermom - Wednesday, Mar 23, 11 @ 7:05 pm:

    Cindy — Amtrak passenger rail service reports its ridership is up for the 16th consecutive month, with lines out of Chicago reporting sharp increases.

    Amtrak says more than with 2 million people got on the service’s trains last month. That’s the busiest February for Amtrak on record.

    The Chicago-Port Huron line saw an increase in ridership of more than 26 percent. The Chicago-Carbondale corridor was up by 16 percent and the Chicago-St. Louis line saw an eight percent rise.

    So clearly, there’s demand. And if there were more, faster trains, demand would follow.


  63. - Liberty First - Wednesday, Mar 23, 11 @ 7:08 pm:

    Teacher’s Retirement figures seem high because there are no low paid people in the system. Aides, janitors, secretaries, cooks and so forth are all in the municipal retirement system.


  64. - Zoble21 - Wednesday, Mar 23, 11 @ 9:49 pm:

    Here is an idea… Quinn should put a “tax” or increase in the fare rates for the CTA/RTA!! A dollar or two would help the state since it ALWAYS has to bail out the system. Just a thought.


  65. - Cincinnatus - Wednesday, Mar 23, 11 @ 11:07 pm:

    Amtrak operates 44 routes on over 22,000 miles of track in 46 states, the District of Columbia, and three Canadian provinces. Amtrak owns the trains, but 97 percent of the track is owned by freight rail companies.

    A 2008 study showed that AMTRAK loses about $32 per passenger:

    http://subsidyscope.org/transportation/amtrak/

    Only the Acela Express makes a profit.


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