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The myth of easy budget-cutting

Thursday, May 18, 2017

* BGA

Perhaps the biggest impediment to an agreement is that the conventional stereotype of Illinois government as marbled with big ticket, easily cuttable fat defies reality.

On a per capita basis, no state government employs fewer people than Illinois. No state picks up a smaller percentage of local education bills. Per patient Medicaid spending is well below national norms. And the pile of debt now owed to state administed public pension systems is staggering. […]

The biggest components of the budget – state employee costs, schools, health care – don’t provide obvious cost savings that would make a substantial dent in the deficit. The state employee workforce of 62,000 in 2016 is down from 84,000 in 2002, a 26 percent reduction, according to the Comptroller’s office. Census data show Illinois has the fewest number of state employees per capita, among the states.

The Medicaid budget, the largest and fastest-growing piece of the Illinois spending document, stood at $17 billion in fiscal 2015, according to the Kaiser Family Foundation, behind Ohio, Florida, Pennsylvania, Texas, New York and California. But the amount Illinois spends per Medicaid enrollee stands at about $4,500, below the national average by about $1,400 a patient, Kaiser reports. […]

In the funding of public schools, no state spends less in support of K-12 education than Illinois, providing 26 percent of funds for school operations in the 2013-2014 fiscal year, according to the National Center for Education Statistics. The average among the states is 20 percentage points higher 46 percent. Cutting state support would increase pressure on local governments to boost their reliance on the property tax.

- Posted by Rich Miller        

43 Comments »
  1. - Big Joe - Thursday, May 18, 17 @ 10:58 am:

    If these facts are accurate, then the answer is pretty simple. More revenue is needed to run Illinois. Lots more.


  2. - JPC - Thursday, May 18, 17 @ 11:00 am:

    The obvious and painful consequences of the absence of a state budget should signal to people what actual cuts mean. It’s an example of what happens when government does not meet basic obligations regarding the preservation of its institutions. Sure, budget-cutter person, government doesn’t take 12 cents from your check, but now you pay 20k more to send your kid to a private school or to school out of state.


  3. - Ahoy! - Thursday, May 18, 17 @ 11:10 am:

    Does any state have a larger pension bill?


  4. - Honeybear - Thursday, May 18, 17 @ 11:18 am:

    So in February I went to the illinois accountability website where you can see everyone’s pay as state employees. It took me a day to do it but I went department by department and compared 2015 to 2017 numbers. Now this site is pretty inaccurate but even so. The decline in state workers was

    13%
    2015-2017

    Smallest per capita workforce down
    13% with just a back of the napkin calcs
    Actually it was a steno pad

    Not even a full skeleton
    Skeleton crew


  5. - City Zen - Thursday, May 18, 17 @ 11:22 am:

    ==In the funding of public schools, no state spends less in support of K-12 education than Illinois==

    Yet when you include local funding, Illinois ranks 12th in the nation in overall education funding. The money’s there. All the more reason to combine an income tax increase with a property tax freeze/reduction.


  6. - Oswego Willy - Thursday, May 18, 17 @ 11:24 am:

    ===On a per capita basis, no state government employs fewer people than Illinois===

    This should be remembered. This too…

    ===The biggest components of the budget – state employee costs, schools, health care – don’t provide obvious cost savings that would make a substantial dent in the deficit. The state employee workforce of 62,000 in 2016 is down from 84,000 in 2002, a 26 percent reduction, according to the Comptroller’s office. Census data show Illinois has the fewest number of state employees per capita, among the states.===

    Why am I focused on these things?

    It’s because budgetary cuts aren’t simple, math is math.

    On the blog, in posts, it’s been discussed the mandatory elements of a budget, most of which we now more easily recognize because they are now court ordered payments that even a “non-budget” existence requires.

    The math, the sheer number of dollars, the revenue isn’t meeting the necessary balancing dollars to make a budget work.

    There isn’t $8-9-10 billion in cuts to find.

    No one wants to own “any” of the cuts needed to get that $10-13 billion needed without raising revenue.

    There needs to be a want and desire for all to take the credit and the blame for this next budget that will need significant revenue, and significant cuts.

    Those cuts, they won’t be “easy”, “simple”, or “obvious”.

    The state employees hold no key to an easy solution. Raising revenue isn’t the lone easy answer either.

    It’s sobering, but numbers usually are when taken from easy talking points.


  7. - Skeptic - Thursday, May 18, 17 @ 11:27 am:

    “Does any state have a larger pension bill?” Does it matter? How would you Constitutionally reduce it?


  8. - Anonymous - Thursday, May 18, 17 @ 11:28 am:

    Just two posts down, Rich informs us that

    “According to WalletHub, Illinois has the highest combined state and local effective tax rate in the country at 14.76 percent based on national median household income.”

    Highest taxes, lowest (according to BGA) expenditures.

    Where is the money going? Seriously.


  9. - Ron - Thursday, May 18, 17 @ 11:28 am:

    How many state and local government employees does Illinois have?


  10. - Oswego Willy - Thursday, May 18, 17 @ 11:29 am:

    - Ron -

    If you can’t or refuse to read the Posts, you may want to refrain from commenting.


  11. - Ron - Thursday, May 18, 17 @ 11:30 am:

    Anonymous, Illinois is probably the worst run state in the union. Their is waste and fraud everywhere. Plenty to cut.


  12. - JPC - Thursday, May 18, 17 @ 11:31 am:

    The current situation is also evidence of another inescapable fact: it’s cheaper to pay now rather than later. Taxes are going to go up, but it’s cheaper than the consequences of not paying.

    So the argument ought to be: let’s raise revenue so that we don’t end up paying more in the future.


  13. - don the legend - Thursday, May 18, 17 @ 11:35 am:

    Maybe Rauner’s agency heads were correct when they provided no suggestions for cuts. /s


  14. - cover - Thursday, May 18, 17 @ 11:37 am:

    = Anonymous, Illinois is probably the worst run state in the union. Their is waste and fraud everywhere. Plenty to cut. =

    Examples, please.


  15. - Anonymous - Thursday, May 18, 17 @ 11:41 am:

    Pension debt per person.

    Former governors in prison.

    Highest tax burden in the nation.

    Horrible government services.

    Pampered public employees.

    Outrageous public worker benefits.


  16. - Joe M - Thursday, May 18, 17 @ 11:42 am:

    ==“Does any state have a larger pension bill?”==

    Illinois’ large pension bill is a direct result of the artificially low 3% income tax rate it had for 20 years; the 5% rate it had for 4 years; and the 3.75% rate it currently has. Among the 40-some states that have an income tax, the current 3.75% is about the second lowest rate.

    Illinois was able to get by all these years with such low rates because it was not paying what it should have been paying into the pension systems. So naturally it has a huge pension bill.


  17. - Demoralized - Thursday, May 18, 17 @ 11:42 am:

    ==Their is waste and fraud everywhere. ==

    Well then it will be easy for you to identify it won’t it?


  18. - Nick Name - Thursday, May 18, 17 @ 11:43 am:

    *”No state picks up a smaller percentage of local education bills.”

    Typo. Sorry.


  19. - Montrose - Thursday, May 18, 17 @ 11:43 am:

    Ron - I would love to see your data on the “waste and fraud everywhere” and how much money can be saved by eliminating it.


  20. - Ron - Thursday, May 18, 17 @ 11:45 am:

    Illinois has the highest state and local tax burden in the nation Joe M. You missed that part in the “artificially low income tax rate” stuff. Nice of you to ignore all the other taxes.


  21. - Demoralized - Thursday, May 18, 17 @ 11:50 am:

    ==Horrible government services.==

    Sigh. Do you have any particular service in mind or is this just more drive by hot air.

    ==Pampered public employees.==

    ==Outrageous public worker benefits.==

    The bitterness is palpable - and sad.


  22. - NW-Illinois - Thursday, May 18, 17 @ 11:51 am:

    Ask the healthcare industry what to cut and/or how high our taxes need to be. They are the ones in charge, steadily taking over the economy and .gov budgets.

    20% of GDP and not slowing down. How much more can they squeeze from all of us? End the suspense by asking the healthcare admins.


  23. - Norseman - Thursday, May 18, 17 @ 11:52 am:

    Finding significant savings from “waste and abuse” is the mantra of persons who have no clue about government. One man’s definition of “waste and abuse” is another’s “vital spending.”

    Rauner tried to play the “waste and abuse” card with a list that was laughable in what was labeled as waste and also weak in terms of “savings.”


  24. - Nick Name - Thursday, May 18, 17 @ 11:58 am:

    “Pampered public employees.”

    Yes, AFSCME really needs to back off its fight to retain the taxpayer funded manicures & pedicures for bargaining unit members. And the masseuses in the staff break rooms need to go.


  25. - Can - Thursday, May 18, 17 @ 11:59 am:

    Ron,

    If there is fraud and waste everywhere, then don’t leave us in suspense - tell us what you would cut in a Gov. Ron Administration. Seriously. What are your ideas? Eliminate DCEO? Give us examples.


  26. - Liberty - Thursday, May 18, 17 @ 12:09 pm:

    With 205 FTE non-education public employees per 10,000 residents, Illinois ranks 43rd. Indiana, Arizona, Michigan, Nevada, Penn and Wisconsin have fewer public employees.

    http://www.governing.com/topics/mgmt/gov-states-where-public-employees-most-prevalent.html


  27. - RNUG - Thursday, May 18, 17 @ 12:12 pm:

    == Yet when you include local funding, Illinois ranks 12th in the nation in overall education funding. The money’s there. All the more reason to combine an income tax increase with a property tax freeze/reduction. ==

    That’s why the State needs to drastically increase it’s school funding in exchange for mandating reduced school property taxes.


  28. - Dublin - Thursday, May 18, 17 @ 12:19 pm:

    Ron (and others), the state will award you up to $5,000 per suggestion of ways to save the state money. You could become pretty wealthy with all of the waste, fraud and abuse that you are aware of.

    Seriously: https://www.illinois.gov/gov/SGSAB/Pages/default.aspx


  29. - RNUG - Thursday, May 18, 17 @ 12:24 pm:

    == Illinois has the highest state and local tax burden in the nation ==

    Since Illinois seems to under tax at the State level, then the problem is must be at the local county / city level.

    Last time I checked, outside metro area Chicago and East Saint Louis, those units were mostly IGOP controlled. The obvious conclusion is the conservatives must be wasting the tax money.


  30. - Ron - Thursday, May 18, 17 @ 12:28 pm:

    RNUG, I’m sure that’s true. Downstate is the worst. I’m not a conservative. I’m very liberal, but fiscally responsible.


  31. - City Zen - Thursday, May 18, 17 @ 12:30 pm:

    ==On a per capita basis, no state government employs fewer people than Illinois.==

    The most populous states in the country tend to fall near the bottom of this ranking just like Illinois.

    What’s the end goal here? A top 10 ranking like Wyoming, Delaware, and Arkansas? How do our employee compensation packages compare?


  32. - Dublin - Thursday, May 18, 17 @ 12:36 pm:

    ===The most populous states in the country tend to fall near the bottom of this ranking just like Illinois.===

    This is simply not true. Stop repeating it.


  33. - Anonymous - Thursday, May 18, 17 @ 12:44 pm:

    How much of this medicaid spending in Illinois goes to illegal aliens, that the democrats are promoting, in having sanctuary zones? Chicago and Cook County. Billions no doubt!


  34. - Honeybear - Thursday, May 18, 17 @ 12:46 pm:

    Zen City I’m not sure I get your point. I can tell you as an actually state employee that we are in active collapse. Partisanship aside fellow citizen, we’re in bad bad shape. In my agency policy and procedure is complex. It takes a trainee every bit of a year to get to their certified position. We’re using 30 year old legacy systems. That’s pre windows stuff as our main processing software. Brother we are doing the best we can with really really really limited resources. Honest.

    My huge concern is that we will go down and stay down. There is no way contractors could do this stuff. It’s why the Union won the case against Maximus. They spilled so much blood and violated policy so badly that the courts made the contractor become certified employees

    Again partisanship aside. We need a competant workforce. We need to retain our valuable employees.

    Any business CEO wants this

    I’m deathly scare we will go down and not get back up even if there is a political settlement.

    I’ve said this a hundred times.

    Zen city thank you for engaging

    Please stop feeding Ron
    Respected conservatives
    “Check your boy” as they say in ESL


  35. - lake county democrat - Thursday, May 18, 17 @ 12:59 pm:

    Federal sequestration made some very deep cuts. Remember how John McCain wailed about the devestation to the military budget? Take a look at those (and others) from this Washington Post story.

    https://www.washingtonpost.com/news/wonk/wp/2013/02/20/the-sequester-absolutely-everything-you-could-possibly-need-to-know-in-one-faq/?utm_term=.cb495656e6b1


  36. - City Zen - Thursday, May 18, 17 @ 1:10 pm:

    ==Since Illinois seems to under tax at the State level, then the problem is must be at the local county / city level.

    Last time I checked, outside metro area Chicago and East Saint Louis, those units were mostly IGOP controlled. The obvious conclusion is the conservatives must be wasting the tax money.==

    No, the legislature isn’t sending back much education funding to my school district, thus my liberal hometown has high local taxes. Guessing Wheaton has the same problem.


  37. - City Zen - Thursday, May 18, 17 @ 1:17 pm:

    Dublin - There are different rankings based on the source, bu look at Governing. Right behind Illinois is Ohio and Florida. CA and TX are not too far behind them.

    Who’s near the top? DE, VT, AR, MS. I see CT is near the top, but they have huge pension liabilities as well.

    So what’s the answer? Is Mississippi the goal? If so, what are state employees down there making? Might have something to do with being able to hire more FTE’s.


  38. - 37B - Thursday, May 18, 17 @ 2:22 pm:

    Take a trip back to July 7, 2016 CapFax. Mr. Rauner (can’t realistically call him Governor) outlined his $800 million in cuts described as wasteful spending. As Rich partially summarized, this alleged waste was for: “DHS programs, child care, job training, transit assistance for people with disabilities, cop cars and cop equipment, and a delayed opening of a residence for veterans (construction of which, by the way, has started again, so is that wasteful?).”
    I thought waste and inefficiency was where programs are run inefficiently or there are increased costs due to sweetheart deals or too much time is being spent around the water cooler. Rauner’s approach amounts to cutting programs he doesn’t like rather than cutting out waste in those programs. Same goes for his first proposed budget where his cuts were 1 Billion out of Medicaid, 2.2 billion cut to pensions and
    600 Million cut to Local Governments, all without a demonstration of fraud, inefficiency or waste.
    Do your job Mr. Rauner.


  39. - Ron - Thursday, May 18, 17 @ 2:38 pm:

    All those cuts are appropriate. Let’s get at it.


  40. - SAP - Thursday, May 18, 17 @ 2:43 pm:

    Like Barbie used to say: “Math is hard”. My modest proposal is for the State to make a bunch of new hires so their contributions can help with funding the pension funds. If they are tier 2 hires, so much the better.


  41. - blue dog dem - Thursday, May 18, 17 @ 4:19 pm:

    Hold K-12 flat. Freeze property tax. Make school boards make some tough decisions. How about that drivers ed and high school PE. How about that local support for the regional offices. Tough decisions in tough times. Here is one I am sure will light up the blogs.get rid of the DARE program. Is it working?


  42. - Ginhouse Tommy - Thursday, May 18, 17 @ 5:48 pm:

    The problem with the cuts is that no one wants to own them. I’ll assume that the agency heads aren’t making cuts because they are waiting for a budget or instructions from the Govs. office.


  43. - Anon - Friday, May 19, 17 @ 8:38 am:

    How do we reconcile this with Illinois having the worst tax burden? Where does all the money go? Pensions?


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