* My weekly syndicated newspaper column…
Last year’s state budget caused some real consternation among local government leaders because the General Assembly slashed their share of the state income tax by 10 percent for one year and skimmed 2 percent off the top of several local sales taxes.
Gov. Bruce Rauner vetoed that budget. His veto was overridden, but the governor’s new budget recycles those same two ideas as well as the overall concept of off-loading state costs onto local taxpayers.
The biggest is Rauner’s proposal to shift some teacher and higher education pension costs to the local and university/college levels. The governor would shift 25 percent of costs per year to school districts and universities over just four years. That means, in four years, taxpayers in downstate and suburban school districts would pay over $1 billion a year for pension payments that they don’t pay now. And Chicago Public Schools would lose 100 percent of its state pension assistance in the first year, costing the city’s taxpayers an extra $228 million.
I just don’t see how the governor could ever pull this one off. And that means whoever drafts the final budget will have to patch a $591 million hole.
The budget proposal for next fiscal year also relies on an assumption that the General Assembly will pass an emergency $1.1 billion supplemental appropriations bill for this fiscal year by March. Much of that money is for the Department of Corrections. Now that a new budget is in place, creditors are demanding payment.
Not to mention that other creditors are going to be forced to wait in long lines until somebody can figure out how to reduce the state’s current $9 billion backlog of unpaid bills because the governor’s budget proposal almost totally punts that problem into the future.
Yes, the governor has lots of new money from the tax hike, so he should’ve been able to propose a far more balanced budget without all these gimmicks that probably won’t pass (like the pension cost shift) and the deferrals (like the backlog problem) which have to be dealt with eventually.
Rauner also avoided making direct budgetary cuts with his tax reduction proposal that claims to cut the income tax rate by a miniscule quarter of a percentage point by relying on revenues from a pension reform idea that may be unconstitutional and has not yet been endorsed by House Speaker Mike Madigan.
We’re now left with two major unanswered questions.
First, is the governor finally serious about negotiating the budget? He had the legislative leaders over to his office last week, which is the first time that’s happened in 14 months. But it was just a quickie budget briefing.
Second, will the Democrats work with Rauner to solve those problems in an election year or will they wait to see if Rauner loses?
Senate President John Cullerton issued a statement last week that may answer both questions: “I met with the governor this morning. He said he wants to roll back taxes and put more money in education. Here’s the problem. His budget does the opposite. He spends the entire tax increase. And he cuts money for education. It’s almost like he doesn’t know what his budget does. I can’t explain the disconnect. It seems intentionally deceptive and it’s troubling.”
So, probably a “no” on both.
* Finke: Don’t spend that tax cut all at once: Being the fiscally prudent guy he is, Rauner will not proceed with the tax cut unless the latest reform plan is found constitutional. At the pace the court works, that should be around the year 2021, assuming the law is passed this spring. If the law is found unconstitutional, we’ll probably hear more about the courts being under House Speaker MICHAEL MADIGAN’s control. If the reform should stand, you, dear taxpayer, will see a cut of 25 cents on every $100 of your state income tax bill. Go crazy.
* Rauner’s pension shift proposal ‘financially devastating’ to QPS: Quincy Public Schools Superintendent Roy Webb says a proposal by Gov. Bruce Rauner to shift pension costs to local schools would be “financially devastating” to the district. “It’s not in our budget at all. It’s not projected to be in our budget at all,” Webb said. “It would be very tough for Quincy Public Schools to try to take that on.”
* Editorial: School pension-cost shift still cause for concern: But if we try to fix what’s broken by merely shifting those cost to local taxpayers it will add to the crippling property tax burden that has homeowners moving to Iowa and other neighboring states.
* Kacich: Pension-cost shift a ‘nonstarter’ for many lawmakers: The keystone of Gov. Bruce Rauner’s 2019 budget — a plan to shift the cost of pension payments from the state to universities and local school districts over four years — is “a nonstarter,” says state Rep. Chad Hays, R-Catlin. He’s not alone in his assessment. Hays is among 46 House members (out of 118) who have signed onto a resolution (HR 27) sponsored by Rep. David McSweeney, R-Barrington Hills, that says that “an educational pension cost shift is financially wrong and would only serve to shift pension burdens from the state to the status of an unfunded mandate.”
* Opponents: Rauner insurance changes would hurt state workers, retired teachers: Rauner said his budget recommends “right-sizing employee health insurance plans so that government compensation is more in line with what the taxpayers have who are paying for it. Today, we pay almost 90 percent of the premiums for government employee health insurance policies that are way more expensive than plans in the private sector.” Rauner wants the split between the state and workers to be closer to 60/40. The American Federation of State, County and Municipal Employees, which represents about 38,000 state employees, said the governor’s numbers are misleading. The union says the state pays 76 percent of health care costs and employees pay 24 percent, which is the national median according to a 2014 study on state employee health plans by the Pew Charitable Trusts.