* Last year, the governor wanted to spend $2 billion more than the House did, and the Senate Democrats wanted to spend a billion more than the House. But the House stood firm on its revenue projections and won the argument. This time around, the House estimate is “only” $221 million below the governor’s revenue projections…
Illinois lawmakers appear poised to try to approve a budget that spends at least $200 million less than Gov. Pat Quinn’s fiscal blueprint.
In action Thursday, the House voted 95-11 to set state revenue for the fiscal year beginning July 1 at $33.7 billion.
Quinn is predicting revenues of about $33.9 billion.
“This is a cautious number,” said state Rep. John Bradley, a Marion Democrat and chairman of the House Revenue Committee.
* Quinn’s budget office was not pleased, but merely stated the obvious…
“A difference of more than $200 million will lead to even further reductions during a time when many legislators call for cuts, but when cuts are proposed, they say, ‘Don’t cut here,’” said Quinn budget spokeswoman Kelly Kraft.
Yes, it’s true that some members do complain. But that doesn’t mean all members complain or that a majority of members can’t be found to make the necessary cuts. I empathize with their frustration, but a bit more positivity is in order here. Also, if that resolution passes the Senate (and it probably will) then it’s reality and there’s very little Quinn can do about it.
More Kraft react…
“Gov. Quinn proposed a responsible budget . . . which allowed for continued investment in education while making difficult decisions in other areas of government to find cost efficiencies due to decades of fiscal mismanagement,” said Kelly Kraft, Quinn’s budget spokeswoman.
* The revenue committees from both chambers met to hear testimony and then decided on the new estimate. Members also consciously decided to err on the side of caution so that any extra revenues could be used to pay off old bills…
Rep. John Bradley, the Marion Democrat who chaired the committee that came up with the estimate, defended it because financial experts were quizzed thoroughly to arrive at the figure.
“This is the way a business does it. This is the way a family does it.… We figure out how much money we have and then we proceed from there,” Bradley said, saying the state will be able to “continue the process of paying down our back bills.”
Discuss.
- wordslinger - Friday, Mar 2, 12 @ 8:32 am:
Given the situation with the bill backlog, the lower number is wiser.
Given that the difference in revenue estimates is only $200 million in a budget of more than $33 billion, I doubt if it’s worth the beef from Kraft.
- western illinois - Friday, Mar 2, 12 @ 9:10 am:
Though it makes sense to spewe are on this states is a person,nd the extra on the old bills….we are back to this state is a person nonsense…it isnt That is why there is a self inflicted pension crisis.There is no reason 75% funded at some arbitrary date as opposed to 90. Now medicaid…..
- Regular Reader - Friday, Mar 2, 12 @ 9:11 am:
The discrepancy being relatively small, Quinn would be wise to accept it.
The governor needs to work with the GA this year. This doesn’t look like a promising start.
- Old Milwaukee - Friday, Mar 2, 12 @ 9:16 am:
He’s already on the outside, looking in.
- Michelle Flaherty - Friday, Mar 2, 12 @ 9:31 am:
by “continued investment in education” does she mean further underfunding the foundation level by $200 million?
- Leave a Light on George - Friday, Mar 2, 12 @ 9:45 am:
It wasn’t that long ago on this very blog that figures like 200mil were derided as rounding errors on rounding errors - not even worthy of discussion
- Pot calling kettle - Friday, Mar 2, 12 @ 9:56 am:
==but when cuts are proposed, they say, ‘Don’t cut here,’==
That is part of their job as representatives of a district. It is then the Gov’s job to justify the cuts and the legislature then has to assess whether to accept the proposals.
- Grandson of Man - Friday, Mar 2, 12 @ 9:59 am:
As a bit of an aside, there is good economic news today: Illinois gained 3,800 jobs in January 2012, and the unemployment rate dropped from 9.7 to 9.4, the fifth straight month of decline. I’m hoping that this trend will eventually help alleviate some revenue/budget problems.
- Shock & Awww(e) - Friday, Mar 2, 12 @ 10:17 am:
Who’s revenue estimate from last year is closer so far this year?
That’s who I’d be more inclined to believe is correct on this issue.
- Plutocrat03 - Friday, Mar 2, 12 @ 10:21 am:
“trend will eventually help alleviate some revenue/budget problems.”
Only with the discipline to use the new revenues to pay off the old bills and catch up on the pension shortfalls. That would truly be a way forward.
Our Governor and Legislators show discipline? Ha, ha, ha, ha
- mark walker - Friday, Mar 2, 12 @ 10:23 am:
It’s a good sign that the new budgeting process is gaining traction, and that starting with an agreed revenue number before committing to spending, is being taken very seriously.
It’s also good that there is bi-partisan support right up front for this “spending cap” which means the House at least will continue to work together to attack these fiscal challenges.
I am concerned that the Revenue Committee decided to trump the COGFA revenue forecast, which agreed almost exactly with the Governor’s number, and created a new number. When this new process was first put together we looked primarily to COGFA, as the most data-driven, rational, and non-partisan source for financial forecasting. We should continue to use the most non-political analytic processes possible, in this highly politicized environment.
Given the set revenue forecast, we can then always aim for a lower number for spending, so as to catch up on overdue commitments. The Speaker and Senate President should have agreed to the COGFA revenue number, and then announced, with bi-partisan leadership support, that we are all going to aim for a lower budgeted spending number to regain fiscal health.
It looks to me that the Gov, in this case, followed the process set two years ago by the GA, and then the GA just moved the goal posts to show who’s really in charge.
The Gov tried to come into the room with the GA, only to find the meeting had been moved elsewhere.
Overall I like the new budget process so far, but let’s not let it slip back at all, toward back-room maneuvering.
- 47th Ward - Friday, Mar 2, 12 @ 10:30 am:
===It wasn’t that long ago on this very blog that figures like 200mil were derided as rounding errors on rounding errors - not even worthy of discussion.===
You’re joking, right?
- Don't Worry About the Government - Friday, Mar 2, 12 @ 10:34 am:
Overshooting revenue estimates and borrowing money got us in this mess to begin with. I say follow the lowest estimate and if there is money left over then put it down on the state debt. The citizens of Illinois are going to have to start getting used to less government services because of our historical recklessness.
- Michelle Flaherty - Friday, Mar 2, 12 @ 10:46 am:
Anyone remember when a certain guy named Pat Quinn used to routinely have news conferences to spotlight nickle and dime waste, fraud and abuse and hold it up as symbolic of the millions in taxpayer dollars being wasted by the bureaucracy of state government?
Funny how he now fights for every single dime his administration can get its hands on.
- Leave a Light on George - Friday, Mar 2, 12 @ 10:53 am:
@ 47th Ward
No, I’m not joking. Ideas that saved a few million here and there were shot down by some because they didn’t close the entire budget short fall which I believe at the time was around 3billion.
- Irish - Friday, Mar 2, 12 @ 10:53 am:
Not only do they say, “don’t cut here.” but it would seem that some try to use cuts to their own benefit.ie: Rep. Winters is proposing HB 5636 a bill to do away with the state nurseries operated by IDNR. The nurseries employ seven people total and provide stock to IDOT, private landowners enrolled in resource programs meant to improve private land natural resources, schools, and others participating in various environmental programs. The nursuries operate in the black.
Ironically, Rep. Winters runs a private nursery.
- Joe Joe made it go - Friday, Mar 2, 12 @ 10:59 am:
Is Quinn really complaining that they want to use a modest $200M to try and pay down some of the $8B in debt?
- Rich Miller - Friday, Mar 2, 12 @ 10:59 am:
===Ideas that saved a few million here and there were shot down by some because they didn’t close the entire budget short fall ===
No. They were shot down because that’s all people like yourself would come up with. You couldn’t then nickle and dime this problem to close a $7 billion hole. So, I was forcing people to think big, rather than just harp on the tiny things. The tax hike passed, now the small stuff is far more important.
Try never to put words in my mouth. It’s a really dumb idea here.
- John Bambenek - Friday, Mar 2, 12 @ 11:13 am:
And for the record, we used the House’s “lowball” estimate this year, and we’re still 500M in the red.
Just sayin’
- Small Town Liberal - Friday, Mar 2, 12 @ 11:17 am:
- And for the record, we used the House’s “lowball” estimate this year, and we’re still 500M in the red.
Just sayin’ -
John, have you figured out yet why revenues are higher than expected and unemployment is decreasing in the wake of a tax increase? I could have sworn the opposite was supposed to happen.
Just sayin’
- Ahoy - Friday, Mar 2, 12 @ 11:20 am:
The Revenue projection is actually pretty good, it’s within 1/2 of 1% of both GOMB and CGFA. While last year’s might have been way to low, I think this year is a good projection, you’d rather project low and high.
- Michelle Flaherty - Friday, Mar 2, 12 @ 11:49 am:
And we might be $500 m in the red because the House lowball estimate underfunded medicaid so we didn’t get the fed cash that had been part of the revenue estimates.
- Leave a Light on George - Friday, Mar 2, 12 @ 12:23 pm:
=Try never to put words in my mouth. It’s a really dumb idea here.=
I never said it was you…
But I was thinking it! lol
And the small stuff is always important to some degree. If you address problems when they’re small they rarely grow into big problems.
- Don't Worry About the Government - Friday, Mar 2, 12 @ 1:39 pm:
===John, have you figured out yet why revenues are higher than expected and unemployment is decreasing in the wake of a tax increase? I could have sworn the opposite was supposed to happen.===
I was delighted to see that our unemployment numbers dropped in the state, but I also take it with a grain of salt considering that they quit counting 2.8 million US citizens as “unemployed” because they just quit looking for work.
But good news is good news and if the State needs anything it is some confidence that the labor market is on the up and up. So, I guess keep up the white lies?
- Fiscal Conservative - Friday, Mar 2, 12 @ 2:11 pm:
While revenue forecasts should be conservative, they should also be data-driven and not politically motivated.
The GA should adopt realistic numbers and then address the spending cuts Quinn proposed or propose others.
The fact that CGFA’s projections were $50 million higher than GOMB’s, would clearly argue the professionals’ concurred estimates were the amounts the General Assembly (GA) should have adopted. And remember, this is the same Committee and House that for many years honored in the breach its own statutory requirement to adopt a revenue forecast by Resolution.
The smoke and mirrors budgets the GA has consistently adopted have significantly under-appropriated Medicaid and group health insurance, which are both entitlements. That’s why the State has rung up significant deficits and the Comptroller is estimating an $8 billion backlog of unpaid bills.
To those criticizing Quinn, it was the House Revenue Committee and the House itself that “fired the shot across the bow” by adopting low-ball and bogus revenue forecasts (remember the GA’s own bi-partisan CGFA’s estimate was $50 million higher than GOMB’s). Rather than accept professionally developed and empirically based estimates, the Committee’s substituted concocted amounts lacking any analysis. The Speaker spoke and the mushrooms abided.
No wonder the rating agency’s have bemoaned the dysfunctional government that characterizes Illinois.
Finally, give Kraft a break. Quinn is effectively proposing slashing Medicaid by over $2.7 billion. Her point — about those calling for cuts are the first ones to moan about anything that affects their districts — was spot on. I guess those same hypocrites must have missed the memos from Rodagno and Cross about shared sacrifices and painful cuts.
- steve schnorf - Friday, Mar 2, 12 @ 2:26 pm:
so the first thing I do is back out the $160M I had targeted for paying old bills. The saved $200 million can pay old bills, and now I’m only down less than $40M.
- Rich Miller - Friday, Mar 2, 12 @ 2:39 pm:
As usual, Schnorf’s solution is probably right on the money. Didn’t even think of it that way. Also, as usual.
- Leave a Light on George - Friday, Mar 2, 12 @ 3:07 pm:
=so the first thing I do is back out the $160M I had targeted for paying old bills. The saved $200 million can pay old bills, and now I’m only down less than $40M.=
How about we take the opportunity to pay down an extra 200M in old bills?
- mark walker - Friday, Mar 2, 12 @ 3:36 pm:
Agree with most of Fiscal Conserv’s comments. Let’s not monkey with the Revenue number, but rather step up to the required lower expenditures without using the lower revenue forecast for any cover. People still seem to assume that the revenue forecast is a spending goal, rather than a cap not to be exceeded.
Schnorf is right in identifying the most likely outcome, but I hope get better from this legislature.
- Yellow Dog Democrat - Friday, Mar 2, 12 @ 4:01 pm:
@Schnorf -
What I find hilarious is that the service providers who are owed the back debt are begging the state NOT to cut the revenue projections.
Why?
Because like any business, they’ve adjusted their long-term plans to account for the fact that the GA rejected borrowing.
Now, we get yet-another change in public policy from the state.
Frankly, here’s what I think should happen.
ALL $200 million should be cut from Corrections and transportation.
A 2010 poll by the Pew Center on the States found the majority of Illinoisans would personally be willing to pay higher taxes to prevent cuts in human services, health care and education.
Only 20% said preventing cuts to prisons or transportation was important.
Isn’t that what Budgeting for Results is all about? Focusing government on the public’s priorities?
- Yellow Dog Democrat - Friday, Mar 2, 12 @ 4:16 pm:
@mark walker -
Unfortunately, the way the House divides up the money to approp committees beforehand, the revenue estimate becomes a spending goal.
The right thing to do is have every committee develop their list of priorities, put the lists side-by-side, and then whack of whatever the chamber decides are the lowest priorities from the bottom of all seven lists.