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* I told you about this problem last month. And now, CoGFA is saying the same thing…
It would take a no-growth spending plan over the next three years to put the budget into the black, according to a new report from the bipartisan Commission on Government Forecasting and Accountability. Keeping a balanced budget when the tax hike expires will be a struggle, especially because Illinois continues to lug billions of dollars in overdue bills.
And, as I told you before, the Democratic leaders and the House GOP Leader are not proposing enough cuts to ensure that the tax hike goes away…
Allied with Democrat Madigan is Rep. Tom Cross, the House Republican leader. The Madigan-Cross spending plan is $33.2 billion out of the state’s main checking account. That’s about $1 billion less than what the Cullerton-led Senate Democrats want to spend and about $2.2 billion less than Quinn’s version.
At this point, the House plan would come closest to the first-year level the state’s budget forecasting commission says is needed to right the financial ship and eventually allow some of the tax hike to go away.
But Cross says there are no worries…
Cross is more confident. “There’s a path there to not continue the tax increase,” he said. “We feel pretty good about that.”
There are worries. Plenty of them. For instance, the Civic Federation’s new report…
Quinn’s budget overestimates revenues by $976 million because it doesn’t set aside enough money for income tax refunds, Msall said. That makes the total budget shortfall $2.4 billion — far more than the $1.45 billion caused by the governor’s added spending alone.
So, the House’s cuts may not be quite enough to even balance next fiscal year’s budget.
* Meanwhile, legislators are now seriously looking at cutting funding to local governments…
About $2.5 billion in outlays aren’t part of the budgets that are being considered by the various General Assembly appropriations committees. The biggest part of that is money the state sends to local governments to prop up their finances.
Gov. Pat Quinn has proposed suspending that revenue-sharing unless lawmakers approve a borrowing plan to pay off old bills. Sen. Donne Trotter, D-Chicago, a Senate budget expert, said the idea of cutting revenue-sharing would be on the negotiating table regardless of the borrowing plan.
“We could take it all, take a percentage, suspend it for a year,” Trotter said of the options open to lawmakers.
* At least one legislator, Rep. Sara Feigenholtz, has come up with an idea to get more money for the budget…
Feigenholtz’s measure, an amendment to House Bill 2934, would authorize short-term borrowing $900 million from existing state funds for the purpose of paying down Medicaid health care bills in order to snag extra federal money.
The House voted, 118-0, to approve the bill and send it the Senate for consideration.
Currently, the federal match for Medicaid is 57%. After June 30, the match will drop to 50%. By paying Medicaid bills early, Feigenholtz estimates that the state could save $90 million.
The Illinois Department of Healthcare and Family Services alone will have $1.3 billion in Medicaid bills on hand at the end of the state’s fiscal year on June 30, 2011. Currently, there is insufficient money to pay the bills. By utilizing $400,000,000 from the Water Revolving Fund and $500,000,000 from the General Obligation Bond Retirement and Interest Fund or other state funds from June 25 to July 30,the state could reduce its Medicaid bill by $90 million.
The state funds would be repaid by August 31, 2011.
* But individual Democrats are still balking at the cuts…
Last week, state Sen. William Delgado complained that his colleagues on the Democratic side of the aisle in the Senate were trying to sneak through a series of budget cuts to a variety of social service programs.
“I thought this would be a more open process,” he griped. “I wasn’t part of this.”
Turns out, the Senate Democrats did outline the proposed cuts during two meetings — one in a closed-door session in Springfield and the other via a conference call. […]
Senate President John Cullerton, D-Chicago, had hoped to get the budget ball rolling in his chamber last Tuesday with an eye on finishing things up for the spring by the end of the month.
By the end of last week, however, the ball was no longer moving and lawmakers began to murmur about blowing their targeted May 31 adjournment date, forcing them to spend the summer in Springfield.
* Sen. Donne Trotter gets the quote of the week…
“This is what the rank and file asked for,” Trotter said of budgets being drafted by committees rather than a handful of lawmakers. “They asked to come into the kitchen. They’re finding out it’s hot in the kitchen.”
* And Gov. Quinn is still mostly irrelevant…
Gov. Pat Quinn notched a rare legislative victory last week, when his last-minute veto threat apparently played a role in the defeat of a proposal to allow people to carry concealed handguns in Illinois. Otherwise, however, observers say Quinn hasn’t been closely involved with General Assembly deliberations this spring – even on proposals Quinn himself initiated.
When Quinn gave his budget address in February, he called for saving money by reducing the number of school districts from 868 to 500, eliminating regional school superintendents, getting rid of legislative scholarships and borrowing billions of dollars to refinance the debt the state owes to local governments, schools and vendors.
As the General Assembly enters the final three weeks of its regular session, none of those ideas have gained much traction. Meanwhile, both legislative chambers seem intent on slashing Quinn’s budget proposal by $1 billion or more.
“I don’t think there has even been any request for bills,” said Steve Brown, a spokesman for House Speaker Michael Madigan, D-Chicago, about Quinn’s proposals to consolidate schools and eliminate the state’s regional school superintendents. When he made the budget speech, Quinn estimated school consolidation would save $100 million, while axing the regional superintendents would save $13 million.
* And even the Peoria newspaper is noticing that the Senate Republicans have taken themselves out of the game…
On that score, while we cheered Senate Republicans a month ago for coming up with a series of proposed cuts, it is fair to note that they have yet to introduce any of them as bills. Over on the House side, the GOP is actually working with Democrats to craft a budget. If their Senate colleagues aren’t up to doing the latter, could they at least try the former to get more deeply involved in the process?
The bottom line is that everybody in Springfield must get serious about passing a responsible budget that might hurt more than Illinoisans would like, but is vital to setting the state on a course toward solvency. Anything short of that means a future meltdown for everybody. Lawmakers who can’t accept that and who aren’t willing to say no when necessary ought to rethink why they’re in the Legislature.
* Apparently uttered without irony…
“[Gov. Quinn] should be looking to try to shape the product as it’s being formed in the legislature so we don’t have an issue of him getting a budget that passed the General Assembly that he’s decided to veto,” [Senate Republican Matt Murphy] said.
* Related…
* Speaker, Cross work on budget together
* Budget work getting messy
* The hidden (federal) costs of Illinois budget cuts: Here’s how it works. Illinois receives over $35 million in ongoing annual federal funding for rental subsidies and other operating costs, and about $7 million in Medicaid reimbursements through supportive housing programs. Those funds come on the condition that Illinois matches 25% (ie, for every dollar Illinois puts in, the Federal Government puts in four). That means any dollar cut at the state level actually costs supportive housing five dollars in the end. This problem hits Continuum of Care and Neighborhood Stabilization Programs especially hard, threatening their ability to provide homeless services and neighborhood development efforts in every county in the state.
* Illinois House takes budget behind closed doors
* Protest at Normal nursing home decries proposed Medicaid cuts
* Cuts could take another stab at the elderly
* It shouldn’t be easy to sweeten state pensions
* School districts not phased by union protests to education reform
* Legislature targeting for-profit universities for grant cuts in state budget
* House committee backs plan for funding higher ed, but changes may be ahead
* Continental Tire gets tax break from Illinois to hire more workers
* Quinn threatens to withhold funds from local governments - Evanston officials outraged, issues advocate action alert
* State workers would have more choices if Health Alliance is dropped, independent physicians group says
* Word on the Street: Health insurance ‘timing‘ questioned
* A do-over needed on state insurance
* Christie Clinic can’t take all those whose insurance would change
* Bernard Schoenburg: IDOT not content to drop firings fight
posted by Rich Miller
Monday, May 9, 11 @ 4:52 am
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Illinois politicians are so accustomed to lying about our fiscal situation that if they were Pinocchios, somebody in Chicago would get their back scratched every time one of them moved their heads in Springfield.
Comment by Aldyth Monday, May 9, 11 @ 7:09 am
The dynamics in the two chambers are interesting. Judging by public comments, or lack thereof, after the election, you would have guessed there would have been more of a bipartisan approach to the heavy lifting in the Senate. That hasn’t been the case.
From afar, it looks like in the House they’re trying to put together an old-fashioned structured roll call on a tough question.
Comment by wordslinger Monday, May 9, 11 @ 7:25 am
YOU told us so? I thought it was the Senate Republicans that demonstrated the spending levels necessary to make the tax temporary.
Comment by Eastside Monday, May 9, 11 @ 8:18 am
So we can expect lower revenues (previous thread) and higher spending (Quinn’s and the Democrats’ budgets are net increases in spending over last year’s deficit baseline). We can’t cut spending since prices are going (last week’s tread).
Got it.
It must be the fault of those evil Republicans in the House (who are working with Madigan) and in the Senate (who had their budget proposals discounted out-of-hand by the Democrat leader of the state) who haven’t introduced a bill despite the fact they have an overwhelming minority in the Senate.
Comment by Cincinnatus Monday, May 9, 11 @ 8:23 am
Cinc,
Actually it is the fault of republicans who refuse to re-finance the state’s debt. Their votes are needed to sell the bonds that were part of the tax increase plan to put the state on solid footing in the out years. Forget about the tax increase being temporary and start gearing up against the next tax increase which will be necessary to keep the state solvent in 2014. You won’t be successful in killing that one either.
Comment by Bill Monday, May 9, 11 @ 8:42 am
“Actually it is the fault of republicans who refuse to re-finance the state’s debt.”
Actually, it is the fault of the Democrats who refuse to commit to the fiscal discipline needed to turn the budget situation around which, as part of a deal would attract Republicans to the borrowing. Given the lack of any meaningful Democrat compromise, why should the Republicans provide any support or cover to the Democrats?
Comment by Cincinnatus Monday, May 9, 11 @ 8:47 am
Cincy, You are correct. Keep swinging away amidst those that would claim borrowing is the way to fix this problem. Remember, the only Governor to ever borrow more money than Quinn was Bill’s favorite Governor, Blagojevich.
Comment by Old Milwaukee Monday, May 9, 11 @ 9:10 am
- it is the fault of the Democrats who refuse to commit to the fiscal discipline needed to turn the budget situation around which, as part of a deal would attract Republicans to the borrowing. -
So do the Democrats need to draft all of the Republicans’ bills for them? Will they vote for cuts then? Do you really believe the Republicans are sitting around wishing the Democrats would draft more cutting measures so they could vote for them? They’re just as scared to cut as the Democrats, they’re just hoping the “We can’t do anything because of the big bad Democrats” line works for another election.
Comment by Small Town Liberal Monday, May 9, 11 @ 9:18 am
=== It is the fault of the Democrats who refuse to commit to the fiscal discipline needed to turn the budget situation around which, as part of a deal would attract Republicans to the borrowing. ===
Listening to Republicans “debate” the budget is like reading the same Charlie Brown cartoon over-and-over-and-over again.
You know — the one where Lucy pulls the football away at the last minute and Charlie Brown ends up on his back.
Republicans are NEVER going to put votes on a borrowing bill, just like they were NEVER going to put votes on a tax hike.
Instead, they keep making an amorphous list of demands that never quite seem to make it into bill form.
Let’s be frank: Republicans aren’t against borrowing. The state is already borrowing, at a rate of 12% APR, from state vendors.
Do you hear any Republicans complaining and offering a solution like…oh, I don’t know…getting a better interest rate?
Comment by Yellow Dog Democrat Monday, May 9, 11 @ 9:45 am
The republicans squeal like pot bellied pigs when cuts to their districts are suggested. Cut the state fair? NO!!!!!!!!Cut DNR? NO!!!!!!!!!! etc., etc., etc., They don’t want to cut. They just want to whine and pander to the tea parties.
Comment by Bill Monday, May 9, 11 @ 9:51 am
As I said earlier, it is all the Republican’s fault. Certainly the fact that Democrats control the GA and the Governors office, for the past several years, can’t get in our way.
Shall we count the number of times that Democrats have had a chance to provide fiscal responsibility. Let’s start from our last balanced budget in 2001:
2002 - Democrats elected
Since then, we’ve had:
Massive pension borrowing
AllKIds (illegals and out-of-state and high income qualifications)
Expansion of Medicaid
Continued expansion of state budget
New programs without identified revenue stream
Largest tax increase in state history
Union pay raises
No-cut contract for union endorsement
Blago
Hendon’s after school program
Emil Jones University (aka Chicago State) and Hawaiian extravaganzas
Quinn’s staff cuts that loaded DNR payroll with cronies
Excessive state Chicago education funding because they don’t pay with property taxes
New fees and taxes on businesses
Workers comp expansions
Operating debt borrowing proposals
Massive year-to-year deficits
Did I say Blago
Comment by Cincinnatus Monday, May 9, 11 @ 10:15 am
Seems to me that all the vacillating and lack of progress is going to do noting but stoke the fires under the kettle of the tea party folks.
The reality of the increases in property tax bills (despite massive property value losses), coupled with increased income and local taxes is not sitting well with the average taxpayer. When you add the inflationary costs and consider a stagnant to declining income, the outcome is not pretty.
The bonds the Governor wants for debt repayment are nothing more than a consolidation loan. To give at least a fig leaf for cover, the State has to stop its overspending. Otherwise we will have a new stack of unpaid bills, the ‘temporary’ income tax increase will be made permanent and a new higher temporary tax will be needed.
So keep doing the same thing over and over. The voters will always be there to support you. Won’t they?
Comment by Plutocrat03 Monday, May 9, 11 @ 10:23 am
Cinci,
Your drumbeat about the Republicans not getting involved is getting old. Legislators are supposed to legislate.
And, yes, it is the Republicans fault right now that vendors cannot be paid. They seem to believe it is ok to borrow from vendors instead of borrowing from the bank.
Comment by Demoralized Monday, May 9, 11 @ 10:24 am
–“[Gov. Quinn] should be looking to try to shape the product as it’s being formed in the legislature so we don’t have an issue of him getting a budget that passed the General Assembly that he’s decided to veto,” [Senate Republican Matt Murphy] said.–
That’s part of the Constitutionally mandated process. Put him to the test. Turn up the heat. Stand for something.
Nowhere in the Constitution will you find a clause that guarantees Mushrooms will never have to make a tough vote.
I don’t think I can ever recall a group at any level that rolled out their Big Plan with a dog-and-pony show, and then was scared to put it in bill form, much less put it to a vote.
The complaints in the past from minority parties were that they couldn’t get their bills called. Now the complaint by the Senate GOP is that if they introduce their bills, they’ll have to vote on them.
Keep cashing those checks.
There was a serious disconnect in that caucus. What was the point of the exercise?
Comment by wordslinger Monday, May 9, 11 @ 10:25 am
cinc,
In assigning blame for the current crisis you left out:
the $5 billion deficit left by Ryan in 02
the Edgar pension holidays and time bomb pension ramp
20 years of Thompson
Pate Philip
Lee Daniels
the billions wasted on roads and bridges to no where in So. Il.
hundreds of small school districts so each small village can have its own high school football team
the DuQuion “state fair”
early retirement buyout for hundreds of state employees
holdover republican patronage employees
MSI
millions of state subsidies to wealthy racetrack owners
Did I say Ryan
Comment by Bill Monday, May 9, 11 @ 10:30 am
The interesting thing, and why I am still hopeful, is that the House, as a whole, is seriously working on a new budget plan that can lead to balance and fiscal health, while we mostly focus on the noise and confusion in the Senate. The Civic Federation has limited credibility because their arithmetic or assumptions are so often wrong — though they do raise interesting questions for us to recheck.
Comment by walkinfool Monday, May 9, 11 @ 11:04 am
The back-and-forth in this thread about whose fault it is problem.
Is that the best we can do? Spend our time trying to assign blame? This is like refereeing a debate between 8 year olds.
Both sides of the isle need to get in the game, give something up for the greater good, and be happy that they are spending time doing work instead of spin. If folks don’t want to be at the big kids table, then they should just step to the back, and let others rise to the occasion.
Comment by Montrose Monday, May 9, 11 @ 11:07 am
I actually favor borrowing to pay off the current vendors IF it means a better interest rate AND it puts the money in hnads of the vendors, most of whom are Illinois citizens, AND the Legislature passes a competent (and believable) plan to cut the spending to repay the borrowing in a reasonable period of time from this generation’s revenue stream, not the next one’s. So far I’m not seeing the last part.
Comment by Bubs Monday, May 9, 11 @ 11:15 am
1. Sunset all corporate tax expenditures - save $1.6 billion annually.
2. Close internet sales tax loophole - generate $800 million annually.
3. Stop warehousing non-violent drug offenders in state prisons, save $250 to $300 million annually.
4. Re-align pension ramp from linear to sinusoidal…flat pension payments when revenues are flat, hyper-payments when revenues are growing.
5. Expand sales tax to cover services and use revenue to reduce overall state sales tax rate. $0 immediate savings, but long term revenue growth.
Tax hike eliminated.
Comment by Yellow Dog Democrat Monday, May 9, 11 @ 11:25 am
Hey, Yellow Dog,
Have you compiled your ideas into one easy listing? I would be more than wiling to put it on a blog website if you want it discussed. Why not roll back the spending from a few of the items I listed above? Then w could really attack the problem.
Comment by Cincinnatus Monday, May 9, 11 @ 12:59 pm
@Cincinattus -
I believe I DID just compile them into one easy listing.
For the sake of credibility, I don’t think we should bother debating cuts or revenue of less than nine figures.
Comment by Yellow Dog Democrat Monday, May 9, 11 @ 2:09 pm
===I thought it was the Senate Republicans that demonstrated the spending levels necessary to make the tax temporary. ===
Only after I made them tweak their assumptions.
Comment by Rich Miller Monday, May 9, 11 @ 2:16 pm
===Tax hike eliminated. ===
Yep, and there goes Sears and Motorola and…
Comment by Rich Miller Monday, May 9, 11 @ 2:21 pm
Grrr. I hate this “let’s not bother debating anything less than nine figures” attitude. When people see the State spending money on a dopey program that costs “only” $100,000, it affects our credibility and burns goodwill. And when we focus only on the big cuts, it creates a careless attitude about the need for thrift inside state government. Watch the pence and the pounds will take care of themselves — that’s what my Grandmother used to say (or would have said, if she had been British…) Those small dollars add up — and more importantly, tightening spending on small stuff would reshape the culture of our government. If you stop and think before you spend $10, you’ll approach a $10,000 cut with more energy and creativity.
Comment by soccermom Monday, May 9, 11 @ 2:24 pm
The other day in the Senate the Republicans voted against a 5% cut to the DNR, because it was not enough. So much for Bill’s argument about Republicans opposing DNR cuts.
Why the Republicans in the Senate simply do not put out appropriation amendements using the numbers the House is using is simply beyond me. Senator Cullerton has baited them repeatedly on this. If the Senate Republicans would endorse the House numbers they would have a powerful role to play in the reconciliation process.
Comment by Rod Monday, May 9, 11 @ 2:25 pm
====The other day in the Senate the Republicans voted against a 5% cut to the DNR, because it was not enough.===
LOL
Comment by Rich Miller Monday, May 9, 11 @ 2:26 pm
@Rich -
Let me clarify — $1.6 billion is the total of tax loopholes written into the tax code, not incentive packages that can be handed out as active economic development tools.
I’m all for grants to businesses, building roads for them, and such.
But I do believe as a practical matter that our spending on economic development needs to be reviewed on an annual basis to make sure those dollars are being well-spent and getting us the most bang for our buck.
Call it “Budgeting for Results” if you like
Comment by Yellow Dog Democrat Monday, May 9, 11 @ 2:30 pm
====The other day in the Senate the Republicans voted against a 5% cut to the DNR, because it was not enough.===
== LOL ==
What’s the budget of DNR? $200 million?
So a 5% cut is $10 million?
LOL is right.
As I mentioned before, its a waste of bandwidth to even debate or discuss cuts of less that $100 million.
Anything less than $50 million is basically a rounding error for the structural budget deficit.
So, unless the GOP plans to eliminate the Department of Natural Resources or atleast cut it in half (and tell us which state parks they are closing), let’s move on.
Comment by Yellow Dog Democrat Monday, May 9, 11 @ 2:38 pm
The reason I laughed is because the SGOPs have set themselves up nicely on these votes, as long as you don’t look too close. They can vote no and say it’s because the cuts aren’t big enough, yet they can also elude blame for cutting the underlying programs.
Comment by Rich Miller Monday, May 9, 11 @ 2:44 pm
The reason I laughed is because saying “we should cut DNR more” is like thinking you steer the Titanic away from the iceberg just by moving all the deck chairs to the opposite side of the boat.
Comment by Yellow Dog Democrat Monday, May 9, 11 @ 3:32 pm
YDD,
I would have no problem eliminating the DNR. Many of their functions could be rolled into other state agencies and local entities. Many parks and other assets could be sold off.
Comment by Cincinnatus Monday, May 9, 11 @ 4:10 pm
==Many parks and other assets could be sold off.==
It’s comments like that which lead people to brush aside budget cutting ideas from certain R’s. It’s absurd. Besides, DNR doesn’t need to be cut. It could be a totally self-supported agency. Charge to get into the parks and make user fees enough to support the various programs. That one is a simple solution.
Comment by Demoralized Monday, May 9, 11 @ 4:55 pm
== Many of their functions could be rolled into other state agencies and local entities. ==
More shuffling the deck chairs on the Titanic. Moving a line item from one agency to another agency or to another unit of government does NOT save taxpayers money.
Demoralized is correct: state park users would support higher fees if the money went to improving and maintaining facilities, just as hunters and fishermen don’t oppose higher fees provided they are dedicated to supporting services.
Now, which Republicans are ready to vote for fee hikes?
Comment by Yellow Dog Democrat Monday, May 9, 11 @ 4:59 pm
My head just exploded. Let’s sell state parks? And would we get for them what the people of Illinois have invested in them? In this real estate market? My parents and I have invested in those parks for decades, so my children will have access to the natural world. And you would sell them off for a fraction of their value to the people of Illinois?
Comment by soccermom Monday, May 9, 11 @ 5:55 pm
–Many parks and other assets could be sold off.–
Brilliant. Because as we know, as human beings, parks and historic preservation are just another entry on some green eyeshade ledger. They have no other value whatsoever.
That’s the stuff you get these days from alleged “conservative Republicans” like Cincy, Anyone looking to sign up for that?
I doubt Teddy Roosevelt would. But he was one of those nasty progressives, like his cousin, who led America from its blissful utopia of the 1900s to the hard, hard life we all live now.
Hey Cincy, check out the root of the word “conservative.” It has a definition. It doesn’t mean selling the family Bible because you’re late on your bar tab.
Let’s just sell the nation’s legacy, that was left to us by more serious people, for naming rights to make philosophers like Cincy happy.
How about a bidding war between Viagra and Cialis for the Washington Monument?
Perhaps an amusement park at Gettysburg, and you can put it on your Pickett’s Charge Card?
Independence Hall? I see Independence Mall.
Yosemite Park? Warner Bros. would buy a bunch to make it Yosemite Sam Theme Park.
So many opportunities for the geniuses who would sell off the nation’s legacy.
Comment by wordslinger Monday, May 9, 11 @ 5:57 pm