* His budget address is next Wednesday, so this press release is a bit of a preview…
In a comprehensive effort to save taxpayer dollars while investing in efforts that build our long-term financial health, Governor JB Pritzker announced that his administration has identified a variety of government efficiencies that will provide $225 million of budgetary relief in Fiscal Year 2021 and at least $750 million over the next three years.
“I believe strongly that effective government demands efficient government—and it’s been a point of pride for my administration to act as wise fiscal stewards of Illinois’ limited state resources, maximizing operational resources and saving hundreds of millions of taxpayer dollars,” said Governor JB Pritzker. “In the past, irresponsible management of state revenue and a failure to invest in the long-term health of our state and its people put us in a challenging fiscal position. But today, I’m proud to announce that for the coming year, our efficiencies and initiatives will yield at least $225 million in savings and will put the state in a position to save more than $750 million over the next three years.”
The Pritzker administration has achieved these savings through optimizing state agency operations, consolidating agencies and eliminating duplicative or dormant boards and commissions.
A comprehensive list of Gov. Pritzker’s proposed government efficiencies is attached. Among the savings highlights:
Moving on from the years of hostility under the previous administration, Gov. Pritzker has treated the state’s dedicated workers and retirees with respect, negotiated with unions in good faith and reached agreements with 20 of 33 bargaining units across the state. Through effective negotiations and innovative health care health care plan design, the Pritzker administration has achieved an estimated $650 million in cost savings to taxpayers through fiscal year 2023, including more than $175 million in Fiscal Year 2021.
Working with Comptroller Mendoza’s office to pay overdue medical bills, the administration has saved the state $15.7 million in late-payment interest costs in FY20 and an additional $25 million in FY21.
In addition, every state agency has reviewed their operations to ensure high-quality services are delivered as efficiently as possible. For example, the Department of Corrections’ operational efficiencies will save more than $25 million while enhanced revenue collections at the Department of Revenue is expected to generate as much as $15 million.
With some agencies performing duplicative functions, the Pritzker administration is looking toward consolidation to save taxpayer resources. The administration is exploring a merger of the Illinois Department of Labor and the Illinois Department of Employment Security and will merge the anti-fraud program at the Workers’ Compensation Commission with the anti-fraud unit at the Department of Insurance, as well as the Coroner Training Board with the Department of Public Health.
Finally, the administration has begun an extensive review of the more than 700 boards and commissions operating throughout state government to identify further opportunities for cost savings. Many boards are duplicative, outdated and dormant, and therefore could be eliminated to save taxpayer resources.
* From the attachment…
The Office of the Governor will explore a merger of the Illinois Department of Labor (IDOL) and the Illinois Department of Employment Security (IDES). The functions of each agency previously were housed in a singular agency before IDES was separated out by then-Governor James R. Thompson in 1984. The justifications provided by Governor Thompson for the split may no longer apply, as both agencies receive significant federal funding from many of the same sources. Further, most other states provide all of the functions undertaken by IDOL and IDES under a single agency. A consolidation could result in significant savings and a more effective, unified agency overseeing labor regulation and job-related programs for the businesses and workers of Illinois.
The review of a potential merger will address any possible obstacles to effectively combing the agencies, while also determining other potential benefits of consolidation, including:
• The merger would create a one stop shop for employment issues – providing better service to the public.
• With the merging of information under one agency, the State could enhance enforcement of labor and unemployment laws and more effectively prevent fraud.
• “Underground economy” would be easier to track. Consolidation of enforcement capabilities would streamline information being shared with key personnel, preventing employee misclassification, and weeding out bad faith employers to create a more level playing field for businesses that follow the law.
• Cross-agency utilization of full data sets would enable a holistic approach to removing barriers in apprenticeship programs, allowing the agency to target areas of high unemployment more efficiently and effectively.
• By merging the agencies, workers would have the combined strength of the regional offices to address their concerns. IDOL could leverage IDES’ existing outreach system to better inform the public about fair labor standards, prevailing wage requirements and other labor laws. Additionally, regional offices could be equipped to assist the public in filing complaints and resolving labor law violations, thus enhancing service delivery.
• With the broader reach of offices in communities all across Illinois, the combined agency would have greater ability to act locally to provide assistance to working families and to develop policies that are more responsive to community needs.
*** UPDATE *** Press release…
The Joint Employers released the following statement regarding the Pritzker Administration’s proposal to merge the Illinois Department of Employment Security with the Illinois Department of Labor:
“While we appreciate and support efforts to find efficiencies in state government, the Joint Employers are disappointed to learn this includes the possibility of merging the Illinois Department of Employment Security (IDES) with the Illinois Department of Labor. Such a proposal suggests a lack of understanding of the need for IDES to act as a standalone agency and raises questions about what, if any, benefits would come from a merger.
IDES was created by the legislature in the early 1980s in recognition that the system of unemployment insurance benefits is funded by Illinois employers and deserved special focus outside of the Illinois Department of Labor, which has a very different function. Because 100 percent of IDES’s administrative funding comes from the federal government, except for in the case of special projects, it is unlikely that there are any administrative savings to be had.
Further, IDES was created to serve as a neutral arbiter to assist both employers and labor during agreed bill negotiations. These occur every few years when a negotiating group from both sides come together to determine what changes, if any, need to be made to the unemployment insurance benefit program. Since its creation, every administration, whether Democrat or Republican, has not only supported the agreed bill process but ensured the leadership of IDES maintains their role as a neutral arbiter. A merger endangers this independence and compromises the agreed bill process.
We are hopeful the Pritzker Administration will engage in a dialogue with impacted entities on this proposal. The work of IDES has been especially important to both business and labor and has maintained a balanced approach that has served both sides well.”
The Joint Employers are comprised of the Associated General Contractors of Illinois, Chicagoland Chamber of Commerce, Illinois Chamber of Commerce, Illinois Manufacturers’ Association, Illinois Retail Merchants Association, and the National Federation of Independent Business.