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House looking at bigger cuts to pay off some old bills

Thursday, Mar 29, 2012

* As I told subscribers earlier today, this proposal also includes another $500 million from federal Medicaid matches, leading to a proposed late overdue state bill reduction of $1.3 billion

Illinois House members plan to use $800 million of next year’s tax receipts to pay down old bills, something that will force even deeper cuts to state programs. The House Revenue Committee approved resolutions dividing up estimated state revenues among various state programs, such as education, human services and public safety. […]

Rep. Frank Mautino, D-Spring Valley, said taking money off the top to pay down bills will result in cuts to state programs that will have to be negotiated by the various House appropriations committees.

He estimated the appropriations committees would have to cut various state budgets by 5.5 percent.

Those reductions are on top of the governor’s proposed cuts. Some agencies are already slated for 9 percent cuts. And it does include the governor’s proposed $2.7 billion in Medicaid cuts, although it mandates that the budget will have to be cut further if Gov. Pat Quinn’s target isn’t reached. The resolution is here.

* And while that spending cap will be quite painful, the General Assembly is also looking at some smaller items. Here’s a quick roundup…

* Illinois House votes to reduce DNR mandates: The Illinois House signed off Wednesday on a Department of Natural Resource’s initiative to shed mandates it cannot or does not fulfill. The chamber voted 114-0 on House Bill 404 in an effort to save millions. For instance, if the department eliminates meeting requirements for the Illinois Geographic Information Council and changes how it reports, Mautino said DNR will save about $200,000 a year.

* Bill would eliminate inactive commissions: State government boards and commissions that no longer meet — or have never met — are a step closer to abolition after an Illinois House vote Wednesday. House Bill 3816, which was sent to the Senate on a 106-8 vote, would dissolve any board or commission if it has not met once in the last two years.

* Urban hospitals propose Illinois Medicaid plan: But the state’s top Medicaid official disputed the group’s claims. Illinois Department of Healthcare and Family Services Director Julie Hamos said the bulk of unclaimed federal matching money is for a portion of the All Kids health insurance program for children in higher income families. That’s a program the legislature may want to target for cuts, she said. “I wish we had found $100 million in new money, but that’s not it,” Hamos said.

* Proposal requires SURS reimbursement when retirees return to work: Under certain circumstances, House Bill 4996 would require state colleges and universities to pick up the tab for retirees’ pension payments if they go back to work. The bill passed the House on a 112-0 vote and now heads to the Illinois Senate.


- Posted by Rich Miller        

  1. - reformer - Thursday, Mar 29, 12 @ 11:38 am:

    Illinois is already among the ten lowest-spending states per capita and as a percent of state GDP. Illinois already has the smallest state bureaucracy per capita. Consequently, cutting a couple $billion means cutting muscle and bone, not just trimming the fact of some commissions that no longer meet.

  2. - TCB - Thursday, Mar 29, 12 @ 11:42 am:

    I still don’t know why the House is so unwilling to take a look at cuts to the revenue formulas of the statutory transfers. This is a big chuck of money that they could free up without harming the big programs like Medicaid and Education. Last year the Senate took the lead & drafted (and passed, with bipartisan support) a bill killing or reducing many of these transfers to the tune of several hundred million dollars in GRF savings, yet the bill was DOA in the House. Based on how I’m reading the resolution, the House is essentially setting aside this money to guarantee these transfers continue in FY13 without even trying to reduce/eliminate any of them. In a day & age of seriously painful cuts, many of these seem much less painless than the alternatives.

  3. - TCB - Thursday, Mar 29, 12 @ 11:49 am:

    sorry, that should read “much less painful than the alternatives”

  4. - Yellow Dog Democrat - Thursday, Mar 29, 12 @ 11:55 am:

    This is what happens when major stakeholders aren’t included in key decisions of the budget-planning process, like the Budgeting for Results Commission.

    In just 15 months, we’ve gone from telling the state’s leading nonprofit organizations:

    1. We’re going to borrow money to pay you back all the money we owe you right away;

    2. We’re not going to borrow money to pay you back right away, we’re going to pay you over 8 years, but we’re not going to cut funding for current programs;

    3. We’re going to pay you back over four years, but we’re going to cut funding for current programs to do it;

    4. We’re going to pay the nursing homes, hospitals and doctors back right way, and we’re going to cut funding for your programs to do it.

    I call “SHENANIGANS.”

    It was nonprofit organizations that helped Madigan and Cullerton build public support for a tax increase.

    Polling shows that the voters want that tax money used to prevent cuts in education and human services.

    Lawmakers, in the House at least, are pulling a fast one on the voters and the state’s nonprofit providers.

  5. - 47th Ward - Thursday, Mar 29, 12 @ 11:59 am:

    I’ve spoken with a few Democratic House members and my guess is that Cross is going to need to put his entire caucus on this vote just to get to 60. The Democrats I’ve talked to don’t want anything to do with these cuts.

  6. - Plutocrat03 - Thursday, Mar 29, 12 @ 12:09 pm:

    Thank previous Governors and Legislators for overspending our resources.

    Good job

  7. - Old Milwaukee - Thursday, Mar 29, 12 @ 12:19 pm:

    You should thank the current Governor and legislature for overspending, also.

  8. - PublicServant - Thursday, Mar 29, 12 @ 12:22 pm:

    If a SURS retiree has worked long enough to receive the maximum benefit from SURS, his continued employment after that point would mean that he would be working in his position for, in effect, only a net of 20% of his earnings. Why wouldn’t a reasonable person ‘retire’ and then be allowed to seek employment with any employer under the same rules governing any other applicant for an offered position? This, and other laws limiting employment (or making it more costly for an employer to hire a particular employee) are a, I believe, a clear violation of EEOC regulations. Again, to all you pension-haters out there, see you in court.

  9. - Yellow Dog Democrat - Thursday, Mar 29, 12 @ 12:27 pm:

    @47th Ward -

    Have those members talked to The Speaker yet?

    “Not wanting anything to do with” and “Never voting for” are two different things.

  10. - Yellow Dog Democrat - Thursday, Mar 29, 12 @ 12:29 pm:

    @PublicServant -

    There IS a revolving door where folks retire from one public job, and then go to work at another public job while collecting their pension — or get hired back to the same job as a “contractual employee.”

    Oftentimes, it involves school administrators.

    I think we can all agree that’s abusive.

    If you don’t like the legislators approach, what do you suggest?

  11. - PublicServant - Thursday, Mar 29, 12 @ 12:39 pm:

    @YDD - The proposed law punishes all SURS pensioners by making them second class citizens when it comes to being able to apply for a position under the same consideration and rules as any other applicant. There are already SURS rules in place to control retire-rehires. They state that a SURS retiree working for ANY SURS or recipricol pension plan employer, cannot earn more than their monthly gross retirement amount.

    Again, people are up-in-arms, as am I, over these blatent abuses of the system, but why are the proposed solutions always directed against the vast majority of people who have nothing to do with these outliers, and why aren’t the current SURS restrictions enough?

  12. - TCB - Thursday, Mar 29, 12 @ 12:41 pm:

    =I think we can all agree that’s abusive.=

    No, I don’t think we can. Especially in times where the state is not filling the positions of the retirees when they leave. It is a way for agencies to retain institutional knowledge & save alot of money on personal services (and benefits), while keeping headcount down and minimally affecting the services provided by the agency.

  13. - steve schnorf - Thursday, Mar 29, 12 @ 12:44 pm:

    I know almost all the things being discussed will be painful to some, and sometimes many. Unless you think the GA and Governor will agree on another large tax increase this Spring, really significant cuts HAVE to be made. They can’t be underapprops called cuts, they can’t be deferrals like many of the union give backs of a couple of years ago, they can’t be payment cycle increases, they have to be real cuts in base spending, and they have to total probably at least $3B. We are still incurring costs billions of dollars over revenues. It has to be done. With luck they can fiddle around the edges with some new revenues, etc, but bottom line, base spending needs to come down below base revenues and stay there a while.

  14. - Yellow Dog Democrat - Thursday, Mar 29, 12 @ 12:55 pm:

    Okay, let me rephrase that TCB.

    Most of the public thinks its abusive, as do most lawmakers.

    The public employee’s retirement system should not be used as a second source of income, nor a second source of revenue for public bodies.

    Sound budgeting requires budgeting with “hard constraints” that prevent cost-shifting from one public body to another.

    SURS should not be subsidizing the bottom line of other public agencies.

  15. - cassandra - Thursday, Mar 29, 12 @ 12:58 pm:

    If the Supremes shoot down the ACA, will that give the states more flexibility in determining Medicaid eligibility and other Medicaid regs. that affect how much the state spends on Medicaid. This could make Medicaid cuts easier from a fiscal and legal standpoint, although not necessarily from a political one. For example, reducing income eligibility requirements without violating federal regs as is the case now, I believe. There is the argument that Medicaid is supposed to be for the poor, not the lower middle and middle middle class. Although it does seem as though the GA is having trouble even thinking about cutting Medicaid service that the feds will let them cut. That’s one of the many reasons why I think we’re heading for another income tax increase.

  16. - Plutocrat03 - Thursday, Mar 29, 12 @ 12:59 pm:

    OK. We can than this crew as well.

    There is a disconnect in governmental thinking between the job that needs to be done and the resources available. Both locally and nationally the politicians act like they can spend more money than they have forever.

    Of course the corruption and patronage taxes consume substantial resources before the legitimate jobs get done……

  17. - steve schnorf - Thursday, Mar 29, 12 @ 1:01 pm:

    P, so tell me how much those consume. Now that would be exactly the painless answer we need to balance the budget. Oh, boy!

  18. - PublicServant - Thursday, Mar 29, 12 @ 1:05 pm:

    @YDD - And exactly how would SURS be subsidizing another public agency’s bottom line? First, pensioners are initially receiving their own contributions back for quite a while, especially if they had been working for the state for multiple decades, and secondly if a pensioner applies for a position, is given equal consideration, and obtains the position wouldn’t the overall cost to the state be no more than equal to or less than the cost to the state, if another person had been hired?

  19. - Waffle Fries - Thursday, Mar 29, 12 @ 1:07 pm:

    @ YDD - thanks for that analysis, can’t disagree at all.

  20. - Plutocrat03 - Thursday, Mar 29, 12 @ 1:12 pm:

    much those consume

    Not enough to balance the budget, but it is a death of a thousand cuts starting with the unqualified appointed to lead departments to the legislation for special interests which increase the costs of doing governmental and private business. Everyone here can name at least one example.

    I’ll start with the poorly implemented tuition waiver program. What did that cost the state and taxpayers each year?

  21. - 47th Ward - Thursday, Mar 29, 12 @ 1:16 pm:

    ===I’ll start with the poorly implemented tuition waiver program. What did that cost the state and taxpayers each year?===

    Almost zero. Tuition waivers are paid mostly by other students who pay tuition, not taxpayers.

  22. - Earnest - Thursday, Mar 29, 12 @ 1:31 pm:

    I think we have to celebrate this approach–we’ve said all along that we want our elected folk to be responsible budgeters…they’re setting limits to their spending in advance of making specific choices. I’ll still advocate cutting things that don’t receive federal match dollars ahead of those that do because it takes less state spending out of the equation.

  23. - hisgirlfriday - Thursday, Mar 29, 12 @ 1:40 pm:

    Question about the SURS bill… How is a state college or university supposed to be able to control whether one of the retirees takes another job somewhere else?

    I’m greatly annoyed at this practice when it comes to public school teachers and administrators (several of the teachers at my old grade/high school would take the early retirement… a program created by THE STATE btw… and then go get jobs at the parochial school about 20 minutes away that they’d hold for another 10 years).

    But in the case of academia where someone might get hired as a consultant for a project or get paid a speaking fee after retirement, does that count as going back to work? What if a retired professor runs for paid public office or holds a position in paid public office that they maintain after retirement? Is that “going back to work”?

  24. - Plutocrat03 - Thursday, Mar 29, 12 @ 2:21 pm:

    Almost zero

    There we go with semantics. Tuition costs went up to all who use the system. At some point, even the non-resident students are taxpayers, so don’t play the pedant’s game of which taxpayer’s pocket the money came from. All money spent by public bodies is taxpayers money.

  25. - mark walker - Thursday, Mar 29, 12 @ 2:30 pm:

    We have just begun the process of recovery. We are in deep, and the pain will only grow.

    A quibble: most of the “inactive commissions” spend virtually nothing, and the board members are usually unpaid — so another case of some press for the Rep, but not a lot of substance.

  26. - reformer - Thursday, Mar 29, 12 @ 3:05 pm:

    Mark is right about the inactive commissions. If Steve is right about the necessity for cutting $3 billion, can that be done without causing some people to die because of the cuts? I recall Edgar used to ask that question about cuts.

  27. - Ahoy - Thursday, Mar 29, 12 @ 3:07 pm:

    I’m glad the House has proposed spending $800 million to pay down the back log of bills. Most understand that cuts are going to have to be made to pay down this debt. Of course we need to pay back around $6 - $7 billion to get to a reasonable payment cycle (notice we should be focused on paying down debt to get to a better payment cycle, not just paying down all bills).

    Only paying $800 million only reduces the back-log of bills by 11 – 13%. At the same time, we’re going to be cutting budgets of the same people who are struggling with cash-flow. If we’re going to be paying around $800 million a year for the next 8 – 9 years to reduce our payment cycle to 30 – 45 days, why not sell bonds (aka restructure the deficit) to allow the payments to get caught?

    If we’re going to cut people’s budgets, we could at least provide them the cash flow to lessen the impact. It just makes sense… to much sense for legislators.

  28. - 47th Ward - Thursday, Mar 29, 12 @ 3:22 pm:

    ===There we go with semantics.===

    Pluto, this thread is about saving money in the state budget. You cited waste and corruption as a way to save money and Schnorf rightly called you on it for not offering any specifics. Then you said the state could save money by ending the tuition waiver program and I pointed out that ending that program wouldn’t save a dime.

    It’s not semantics. It’s the truth. It’s OK if you don’t know anything about the state budget, most taxpayers don’t either. But don’t pretend to have answers when it is clear you have none.

  29. - Yellow Dog Democrat - Thursday, Mar 29, 12 @ 3:23 pm:

    @Schnorf -

    I agree there have to be “real” cuts.

    But have you ever noticed that cuts to tax expenditures never seem to be on the table?

    Again, the herky-jerky budgetary policies of this state are maddening and destructive.

    We are robbing Peter to pay Peter the money we borrowed from him two years ago.

    That, my friend, is idiotic.

  30. - TCB - Thursday, Mar 29, 12 @ 3:30 pm:

    Actually, the majority of legislators would vote for a borrowing as you described…..however, it takes a super majority for Bond Authorization to pass.

    Blame the Senate GOPs for this.

  31. - TCB - Thursday, Mar 29, 12 @ 4:28 pm:

    @hisgirlfriday =I’m greatly annoyed at this practice when it comes to public school teachers and administrators (several of the teachers at my old grade/high school would take the early retirement… a program created by THE STATE btw… and then go get jobs at the parochial school about 20 minutes away that they’d hold for another 10 years). =

    How is it that this sort of thing is “greatly annoying” to you?

    I mean these teachers worked hard & earned their pension. What’s it matter it you how they spend their golden years? Would you be equally annoyed if they became a Wal-Mart greeter or served coffee at Starbucks to earn extra income?

    As for the parochial schools, they often can’t compete when it comes to salaries (at least that’s what I’ve always heard) so situations like this seems to be a good opportunity for these schools to get access to experience teachers that are willing to accept a lower salary given their pension income.

    And the local school district is no longer responsible for the high salaries which are paid to teachers with decades of experience…….To me this seems like a win-win-win situations for the retiring teacher, the local school district and the parochial school.

  32. - Plutocrat03 - Thursday, Mar 29, 12 @ 5:51 pm:

    don’t know anything about the state budget

    I know enough to understand that the political class is more interested in preserving their turf and power than solving the budget problems.

    In the days of Peter Fitzgerald, when he was a local, he called the State budget a sham heading toward a collapse. I guess he knew nothing as well.

    We do have to look for a way forward and asserting that someone does not know enough about something does nothing about digging you way out of this mess. You simply have to stop spending money you don not have. The private sector has done round after round of cutting over the last 5 years while still getting the job done. Many state position holders have made sacrifices as well, but the bosses are still feeding at the trough.

  33. - Pot calling kettle - Thursday, Mar 29, 12 @ 11:31 pm:

    ==I know enough to understand that the political class is more interested in preserving their turf and power than solving the budget problems.==

    Yes, but they also want to get reelected & their constituents want more services than they are willing to pay for in taxes. This line of thinking has strong roots in the Reagan era when folks like Grover Norquist came up with the idea of “starve the beast” They knew significant cuts to government service were very unpopular, so they promoted tax cuts. They understood that this would drive up the debt to the point that cuts in services would have to be made. It took 30 years, but they succeeded!

    ==In the days of Peter Fitzgerald, when he was a local, he called the State budget a sham heading toward a collapse. I guess he knew nothing as well.==

    It’s one thing to recognize a problem; it’s another thing entirely to know how to fix it.

  34. - otownie - Friday, Mar 30, 12 @ 8:22 am:

    So higher education and tuition paying tax payers take it on the chin twice. Keep the legislative scholarships that get paid by other students and prohibit the reentry of retirees which will again contribute to higher costs for those students paying tuition. Where is the logic?

  35. - Yellow Dog Democrat - Friday, Mar 30, 12 @ 9:08 am:

    @Pot -

    You are oversimplifying the problem.

    The problem is not that “their constituents want more services than they are willing to pay for in taxes.”

    In fact, a poll taken just before the Jan ‘11 tax increase found that majorities of Illinoisans were personally willing to pay higher taxes if that money was used to prevent service cuts in education, human services and health care.

    The voters are, as one would expect, extremely angry that their taxes went up and human services are being cut. They will be even further enraged if there are cuts in services for education and health care.

    My grandfather loved to quote that old carpenter’s phrase: “I keep cutting and cutting this board and its still too short.”

    The reason lawmakers are so flummoxed is because they either don’t know how to write a poll or they can’t read them.

    Yes, voters want a balanced budget. But they want a budget that is both fiscally balanced and morally balanced.

    Voters want a budget that reflects their spending priorities, not the spending priorities of Pat Quinn, John Cullerton, Christine Radogno, Mike Madigan or Tom Cross. And certainly not a budget that reflects the spending priorities of the lobbying industry.

    What we keep getting out of Springfield, despite the reforms supposedly implemented under Budgeting for Results, are budgets built on the foundation of misplaced priorities of the past, and shaped by the same political insiders.

    Beyond that, Illinois desperately needs a sustained Budget Education Campaign to dispel all of the misinformation about the state budget.

    Part of the reason there is public resistance to tax reforms that close corporate loopholes is that the Chamber of Commerce has done such a masterful job of creating this myth that corporate taxes are too high in Illinois. The media’s lack of thoughtful coverage hasn’t helped.

    1 in 4 Illinois voters thinks corporate income taxes are the #1 source of revenue for the state. They are actually less than 5%.

    Voters need sound, factual information in order to provide sound opinions on how to balance the budget.

    This should be part of the core mission of the Budgeting for Results Commission.

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