Budget stuff
Tuesday, Feb 16, 2021 - Posted by Rich Miller
* ABC 7…
The governor also promised no tax increases, though that’s not how Republicans see it.
“What the Democrats call as loopholes, we look at those as tax increases,” said House Republican Leader Jim Durkin. “But we also believe that that is a disincentive for businesses to remain in Illinois to grow, and to keep employees employed, and to bring in new people.”
Republicans also called for greater transparency.
“Where department heads, agency directors come before the legislature to answer questions, provide information about their budgets,” said Deputy Minority Leader Tom Demmer.
The governor fired back, calling on Republicans to suggest their own budget solutions, setting up a potentially rocky spring legislative session that will have to navigate while still in the midst of a pandemic.
Considering the situation Illinois is in and the proximity to the next election, there will be no comity with Republicans this year no matter how great the budget proposal might be, and it won’t be great, by any means.
As I told subscribers last week, the real conflict the governor faces will be with members of his own party, most of whom will want more spending, not less.
Press conferences can make for great copy, but they don’t always reflect reality. And the reality is the House and Senate Republicans are in the super-minority. All they really have in their arsenal is media access.
* WGN TV…
The budget will also close $900 million in unspecified corporate tax loopholes. Republicans call this a tax hike, however.
“What the Democrats call loopholes, we look at those as tax increases but we also believe that that is a disincentive for businesses to remain in Illinois, to grow and to keep employees employed and to bring in new people,” said House Republican Leader Jim Durkin.
Keeping those tax breaks forces a choice between the good the tax breaks do versus the harm to the rest of the budget that keeping them causes. It’s spending by another word, even if may not be exactly dollar-for-dollar…
The Republicans said Pritzker apparently wants to eliminate corporate tax incentives to create jobs, which they said wouldn’t be a wise move in a pandemic-induced recession.
Deep spending cuts are also not a wise move during a recession.
* Dave Dahl…
House Minority Leader Jim Durkin (R-Western Springs) says the Democrats’ budgeting practices are straight out of Fantasyland.
“Gov. Pritzker and his enablers from the House and Senate continue to budget at $42 billion,” Durkin told an online news conference. “With a snap of a finger, this budget becomes law; nevermind the global crisis.
“The Illinois Democrats cooked up a budget predicated on imaginary money that may or may not ever show up.”
No argument there at all.
* Mike Miletich…
Rep. Tom Demmer (R-Dixon) also noted that the administration said a tax increase was possible when the “Fair Tax” failed to get enough support from voters. Yet, the administration recently announced Pritzker’s budget proposal would not include a tax increase. The same press release indicated the budget would “strengthen” IDPH, DCFS, IDES, and other “vital services.”
“We have a credibility issue and a transparency issue,” Demmer said. “The administration needs to be more forthcoming with information for both Republicans and Democrats in the legislature. And if they’re not going to be forthcoming, we need to use the power of the legislature to demand those answers.”
His beef is with the House Speaker.
* The Tribune editorial board wants a crackdown on AFSCME…
For all of Pritzker’s use of unilateral executive orders and emergency rules, he can’t claim his hands are tied with AFSCME. He has options. He needs to apply them.
The board did not actually explain those options.
* Greg Hinz…
A second item worth watching is Pritzker’s upcoming new budget. Despite his decision not to raise the current flat income tax, there’s still a lot of budget detail we don’t know, notably whether Congress will come to the state’s aid with a big check from President Joe Biden’s pending $1.9 trillion COVID relief bill. If Biden delivers, Pritzker will be able to breathe much easier. If not, some distasteful spending cuts and other revenue enhancers are on the way.
Of course, Pritzker could have avoided much of this nastiness if he’d acted like the bean-counting businessman he is and moved to slash overly rich state pensions, one way or another. But that, sadly, does not appear to be in the cards.
Which path to slashing benefits would that be?
* News-Gazette…
One way or another, the budget will get done before the new fiscal year begins July 1, but probably not without the usual gimmicks that will make it looked balanced on paper.
No one should envy the challenge facing the governor. He’s got a tough job. Then again, he’s getting what he asked for — good and hard.
Yep.
* From Jordan Abudayyeh…
Republicans fought against the fair tax to protect millionaires and billionaires from paying their fair share and took the best option to balance the state’s budget off the table. The Governor has presented more than $700 million in budget cuts, yet Republicans have offered no solutions to the fiscal challenges facing the state because, by their own admission today, Republicans don’t believe it is their responsibility to present their ideas to balance the budget. It’s going to take a lot more than empty rhetoric to rebuild the state’s economy after this devastating pandemic and the Governor welcomes Republicans to present their realistic ideas, so the state can balance the budget in a bipartisan fashion.
Their real job is to lob verbal grenades at this point. It’s not like they’ve been invited to the budget table as equals, after all.
Background…
The transparency and process arguments made by House Republicans are rooted in willful ignorance of the many ways the Governor’s Office communicates budget related matters to the General Assembly.
Attached is a breakdown of cuts that has been publicly available since December and below is the press release announcing the cuts.
An outline of federal dollars sent to Illinois and how they were spent is on pages 4-6. These reports were provided to the General Assembly’s Legislative Budget Oversight Committee:
https://www2.illinois.gov/sites/budget/Documents/LBOC/LBOC%20Report%20-%20January%202021%20Final.pdf
After the budget was passed in May 2020, GOMB posted this document outlining how lawmakers appropriated the federal dollar in the budget:
https://www2.illinois.gov/sites/budget/Documents/Budget%20Book/FY2021-Budget-Book/COVID-%20Response-Federal-Funding-Budget%20Summary-6.13.20.pdf
The attachment is here.
* Related…
* The Blue Collars Job Act in a pandemic: What it means for Illinois’ budget
- NIU Grad - Tuesday, Feb 16, 21 @ 11:43 am:
“hands are tied with AFSCME. He has options. He needs to apply them.”
Have they….read the contract? Are they new here?
- Funtimes - Tuesday, Feb 16, 21 @ 11:43 am:
The budget must include spending cuts. If the budget doesn’t include a tax increase, then we are left with yet another example of the democrats in this state lacking the stomach to do what is necessary to put this state on a path to solid financial footing.
- Two Cent Ante - Tuesday, Feb 16, 21 @ 11:48 am:
In re: “We have a credibility issue and a transparency issue,” Demmer said. “The administration needs to be more forthcoming with information for both Republicans and Democrats in the legislature. And if they’re not going to be forthcoming, we need to use the power of the legislature to demand those answers.”
Help me out here… I couldn’t make out if Demmer was talking about Pritzker or IPI.
- The Doc - Tuesday, Feb 16, 21 @ 11:49 am:
==slash overly rich state pensions==
Very disappointed that Hinz is spouting this garbage. He definitely knows better.
- Perrid - Tuesday, Feb 16, 21 @ 11:52 am:
So the suggestions are
1) Go to war (again) with the union(s), and
2) Pretend that it’s POSSIBLE to cut pension benefits
Those are the options Republicans see. Not asking businesses or the rich to chip in when times are hard, no, they have to go after state workers.
- JS Mill - Tuesday, Feb 16, 21 @ 11:57 am:
=The budget must include spending cuts. =
Are you a bot or something? $700 million in cuts, at least pretend to read before issuing the party propaganda.
It also sounds like the ILGOP wants a tax increase. When are they scheduled to discuss Durkin’s tax increase bill?
What “overly rich” pensions is Hinz talking about?
- Chicagonk - Tuesday, Feb 16, 21 @ 12:02 pm:
The way I see it, Pritzker avoiding hiking the income tax rate was a mistake. It’s not a popular decision, but raising rates by .5% would add around $2B in revenue and that would go along way towards the bill backlog.
- low level - Tuesday, Feb 16, 21 @ 12:04 pm:
“ The Illinois Democrats cooked up a budget predicated on imaginary money that may or may not ever show up.”
As opposed to Illinois Republicans who cooked up a budget that is a blank sheet of paper.
- thechampaignlife - Tuesday, Feb 16, 21 @ 12:05 pm:
We need to address the annual gimmicks that produce a balanced budget on paper that does not match reality. I know it gets complex quickly with pension liabilities and capital spending/bonds but, at a minimum, actual GRF revenue should exceed actual GRF spending (including payables held at the agency) to prevent bill backlogs.
If budget projections result in overspending or lower than expected revenues, spending should be capped at the prior year’s level and actuaries should calculate a % increase adjustment to the income and sales tax rates to make up the shortfall the following year.
- Is it 2022 yet - Tuesday, Feb 16, 21 @ 12:07 pm:
I might be inclined to vote Republican more often if they offered some better budgeting ideas. But they offer nothing (at least nothing realistic). Just criticism.
- CIC - Tuesday, Feb 16, 21 @ 12:10 pm:
Illinois Republicans are a super-minority. They hold no power. Democrats control all levers of state government. Democrats are able to implement any and all solutions available to them. Elections have consequences. Democrats who have swept elections need to accept the consequences of victory.
- Oswego Willy - Tuesday, Feb 16, 21 @ 12:14 pm:
=== Democrats who have swept elections need to accept the consequences of victory.===
Welp…
=== The budget will also close $900 million in unspecified corporate tax loopholes. Republicans call this a tax hike, however.===
Hurting downstate in the most painful ways can do that too.
- Merica - Tuesday, Feb 16, 21 @ 12:15 pm:
There are plenty of places where the State can save money, here are a few:
- institute permanent work from home for certain employees and terminate leases.
- merge the departments of agriculture and DNR.
- merge IDOC and DJJ
- terminate the Du Quoin State Fair
- Close the State Museum
- outsource payroll, timekeeping, and benefits to ADP
- prohibit units of government from hiring lobbyists or paying membership dues to any organization or association.
- IDOT should reclassify the road network and reclassify a larger percentage of “State Routes” to county roads and have local governments be responsible for those.
- stop funding all airports that are not named O’Hare or Midway
- Rich Miller - Tuesday, Feb 16, 21 @ 12:17 pm:
Merica, you’ve cut a few million dollars from the budget and raised local property taxes. Congrats.
Next!
- RNUG - Tuesday, Feb 16, 21 @ 12:20 pm:
I think JB is making a political miscalculation. Math says sooner or later he needs to pass a tax increase.
Waiting until next year just puts it closer to the next election and will leave it fresher in the voter’s memory.
- S. Side - Tuesday, Feb 16, 21 @ 12:26 pm:
When it comes to the state budget, it’s so easy to be a member of the minority party when you have no accountability or responsibility except finger-waving’ agility.
- Back to the Future - Tuesday, Feb 16, 21 @ 12:30 pm:
I suspect we will see legislation supported by the Governor to extend the number of years for funding out at least 10 years which would lower the amount of taxpayers dollars that go into state and local pension systems. That money could then be used for operating costs.
That would “save” taxpayers hundreds of millions of dollars.
This “kick the can down the road” approach is always popular with Governors, Mayors and the Illinois General Assembly. This approach would probably get support from employee unions.
Long term this is a bad idea, but it will work well to get past the next election.
- midway gardens - Tuesday, Feb 16, 21 @ 12:33 pm:
== $700 million in cuts, at least pretend to read before issuing the party propaganda
But isn’t that number dependent on union concessions? That seems unlikely.
- thechampaignlife - Tuesday, Feb 16, 21 @ 12:33 pm:
RNUG, are we sure he is running for reelection? Maybe he is happy enough with a legacy of ending Rauner’s reign and seeing us through the worst pandemic in 100 years.
- Rich Miller - Tuesday, Feb 16, 21 @ 12:37 pm:
===But isn’t that number dependent on union concessions?===
$75 million.
- Oswego Willy - Tuesday, Feb 16, 21 @ 12:44 pm:
=== Math says sooner or later he needs to pass a tax increase.
Waiting until next year just puts it closer to the next election and will leave it fresher in the voter’s memory.===
Agreed.
Unless the Fed money comes through and the significant and serious cuts happen, and NO extra spending (flat budget, no increases) the math calls for even more revenue than the $900 million from “loopholes”
Tough to be a governor signing tax increases while voters might be signing nominating petitions.
- thoughts matter - Tuesday, Feb 16, 21 @ 12:52 pm:
Union contracts are settled until after the next general election. Not a factor for this budget year. Pensions were handled via tier 2, including caps on the average salary used to calculate pension amounts. They are welcome to create a tier 3 for new employees. Also not a factor for this budge year.
There’s a recession, and a pandemic. Please start offering realistic solutions. Be honest if you can’t find any rather than just blaming state employees and retirees.
- Ducky LaMoore - Tuesday, Feb 16, 21 @ 12:52 pm:
RNUG, I think the political calculation is that a tax increase would be done during the second term. Yeah, there really can’t be a tax increase next year. That would be political suicide… like having a tax increase sunset mid fiscal year during an election year….
- Anyone Remember - Tuesday, Feb 16, 21 @ 12:52 pm:
“- outsource payroll, timekeeping, and benefits to ADP”
Groan. Merica (Rich, please don’t delete this for mentioning federal matters) - the Feds have wasted BILLIONS trying to do exactly that. ERPs from Oracle, SAP, Microsoft, etc., do NOT have a Commercial Off The Shelf (COTS) software package that incorporates State of Illinois payroll and timekeeping requirements. Please do some research - ECSS, DIMHRS, NEIMAS, DEAMS, GFEBS … and Illinois specific, who can forget CUSAS II?
- The W.A. - Tuesday, Feb 16, 21 @ 1:02 pm:
Merica, I know thinking is hard,but could you please explain your rationale for merging DOA and IDNR? IDNR=Preservation. DOA=Monetization. How is that supposed to work with such conflicting missions?
- SumGai1986 - Tuesday, Feb 16, 21 @ 1:31 pm:
==Not asking businesses or the rich to chip in when times are hard, no, they have to go after state workers==
Tell me, when is the last time state workers shared in the “shared sacrifice” they ask us to share in?
- Candy Dogood - Tuesday, Feb 16, 21 @ 1:32 pm:
I don’t know how long our public universities can rely on students who are willing to trade a $120,000 in debt for a 4 year degree from a state school.
- Oswego Willy - Tuesday, Feb 16, 21 @ 1:42 pm:
=== state workers===
Being mad at state workers is not a budgetary solution.
If you’re jealous, apply for a state job.
You do realize if taxes go up, fees go up, services are ended… they *pay* taxes like you do, and services that stop, change, end, effect them too… right?
If you only have angst for state workers, maybe you ain’t for any solutions.
If they are a union, they have contracts.
I’ll look forward to you applying as a prison guard, IDOT worker…
- Librarian - Tuesday, Feb 16, 21 @ 1:44 pm:
== Tell me, when is the last time state workers shared in the “shared sacrifice” they ask us to share in? ==
Probably that streak of no raises from 2008 to 2011 that most state workers were mandated to take, or the forced furlough days in 2009-10? All during a time that the private sector was reaping the benefits of a slowly recovering economy?
- allknowingmasterofraccoodom - Tuesday, Feb 16, 21 @ 1:44 pm:
Rich: “Which path to slashing benefits would that be?”
That would be the same path he tried to open the constitution with to raise taxes on everyone instead of reigning in the freebie pensions. That path. Same path.
- SWIL_Voter - Tuesday, Feb 16, 21 @ 1:46 pm:
== Tell me, when is the last time state workers shared in the “shared sacrifice” they ask us to share in?==
8.5% every paycheck plus all the other taxes everybody else pays
- Oswego Willy - Tuesday, Feb 16, 21 @ 1:47 pm:
=== freebie pensions===
Who has that?
No one is paying into their own pensions?
Huh.
- Rich Miller - Tuesday, Feb 16, 21 @ 1:48 pm:
===he tried to open the constitution===
You cannot be that dumb.
- SWIL_Voter - Tuesday, Feb 16, 21 @ 1:50 pm:
As I understand it, I’m paying for my own pension, plus all the Tier 1 pensioners who have way better benefits than me, plus I’m paying in to the same pool of taxes as all the non-state employees.
- Jocko - Tuesday, Feb 16, 21 @ 1:58 pm:
==freebie pensions==
Since when? I’ve had 8% deducted from each (and every) paycheck since day one.
- Confusion - Tuesday, Feb 16, 21 @ 2:34 pm:
== Tell me, when is the last time state workers shared in the “shared sacrifice” they ask us to share in?==
I would say there is a fair chance that many of them will end up having to move/change jobs. The offender population is down significantly over the last two years. We have ~30k down from a high of ~50k. I don’t see the state locking up more people with criminal justice reform and COVID.
- Lurker - Tuesday, Feb 16, 21 @ 2:44 pm:
Below is exactly why they need to be merged. We would make one policy (with accompanying expenses) and then they would make one to counteract it (with accompanying expenses). The silos are tough to breakdown but this is one costing Illinoisians (especially farmers) a lot of unneeded angst. If you need an example, read land and water policy from Ag and then read water policy from DNR.
>>>>Merica, I know thinking is hard,but could you please explain your rationale for merging DOA and IDNR? IDNR=Preservation. DOA=Monetization. How is that supposed to work with such conflicting missions?
- thechampaignlife - Tuesday, Feb 16, 21 @ 2:54 pm:
===software package that incorporates State of Illinois payroll and timekeeping requirements===
We sorely need an ERP. One that adopts industry best practices. Not only would it save money directly by eliminating duplicative and outdated systems that are hard to maintain, it would increase operational efficiencies of those using or relying on those systems across all agencies.
If Illinois law conflicts with those industry best practices, I would hope the folks shaking their tin can around the GA for funding would advocate for legislative changes to modernize our requirements to minimize the need for bespoke solutions where possible.
- City Zen - Tuesday, Feb 16, 21 @ 3:43 pm:
“Republicans fought against the fair tax to protect millionaires and billionaires from paying their fair share”
It wasn’t a revenue neutral solution, Jordan.
- Honeybear - Tuesday, Feb 16, 21 @ 3:43 pm:
Oh Cripes here we go again. Seriously if you’re so jealous of my meager pension that I pay into with each paycheck, just apply for a job.
I’m so sick of people going after us.
Rauner did, he lost. Lost big
I think the privileged are loosing bladder control over the thought of loosing their corporate welfare.
Lets talk about the “takers” in the privileged class.
- City Zen - Tuesday, Feb 16, 21 @ 4:02 pm:
==8.5% every paycheck==
According to SERS annual actuarial evaluations, the annual employer normal cost for 2020 was 13.75%. It hovered above 15% for a few years before that.
- Anyone Remember - Tuesday, Feb 16, 21 @ 4:15 pm:
==One that adopts industry best practices.==
Industry best practices are NOT Government best practices. Industry is about efficiency, Government is about accountability. The CMS / DoIT accounting software being replaced, AIS, enables expenditure reporting by legislative district. Other than federal largess dependent, what Industry has to report expenditures by legislative district?
- Skeptic - Tuesday, Feb 16, 21 @ 4:29 pm:
“imaginary money that may or may not ever show up.” You mean like tax cuts that pay for themselves?
- Downstater - Tuesday, Feb 16, 21 @ 4:29 pm:
Merica is nuts and then Lurker makes it look dumber. Are you kidding? Let’s just take the two agencies that, while related, NEED to be separate because their policies essentially regulate one another and put them under the same banner. I look forward to being poisoned and dying because my drinking water is fouled with Roundup under this new mashup agency.
- Demoralized - Tuesday, Feb 16, 21 @ 5:18 pm:
==Industry best practices are NOT Government best practices.==
People never seem to grasp that concept. They think that government can operate like a business. It can’t, it shouldn’t, nor will it ever.
- JS Mill - Tuesday, Feb 16, 21 @ 7:40 pm:
=They think that government can operate like a business. It can’t, it shouldn’t, nor will it ever.=
Actually, the private sector could learn a few things from government. our administrative costs are 3.7%. Good luck finding that in the private sector.
But your point is well taken. government does not exist for profit and is more about doing things that cannot be done well in the private sector. Like custodial work at the airports for example.
- Justdoingtime - Tuesday, Feb 16, 21 @ 9:55 pm:
Idoc is down 10,000 inmates since this time last year. I look to see some minimum security closures of old outdated facilities .