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* This was at the bottom of a press release yesterday from Illinois Transportation Secretary Ann Schneider announcing the state’s new multi-year transportation construction program…
To ensure the continuation of the state’s capital plan and projects like these, which are putting hundreds of thousands of Illinois residents back to work, Governor Quinn has proposed necessary changes to stabilize and restructure the state’s pension and Medicaid programs after decades of fiscal mismanagement.
The proposals outline up to $85 billion in savings from changes to the pension system (based on current actuarial assumptions), and $2.7 billion in savings from restructuring Medicaid. These changes will lead to greater certainty in Illinois’ business climate and help respond to serious concerns from the ratings’ agencies.
The billions of dollars saved through these reforms are key to the state’s ability to ensure that critical capital improvement and road safety projects in Illinois are able to move forward.
* One possible translation: Kicking seniors and poor people off their health care coverage and zapping pensioners is a really great thing because we can patch more potholes! Hooray!
* Secretary Schneider defends herself...
Four years ago, the state’s road fund was responsible for $60 million in pension payments for employees responsible for road projects, Schneider said. Next year, that amount is projected at $172 million, she said.
“Without any action to address the pension problem, in just six years that pension contribution could be upwards of $400 million per year for IDOT employees at our current headcount level,” Schneider said. “We think it is a significant issue that needs to be addressed.
“I believe by addressing the issue this session it could potentially free up additional funds for transportation improvements,” Schneider said.
Similarly, she said, if the state can control Medicaid costs, it will stabilize the state’s credit rating, making it less expensive to issue bonds for road projects.
Schneider said she could not point to specific projects that could be undertaken if pension and Medicaid costs are controlled.
So, yeah, her statement has plenty of logic and facts behind it. But it’s still a bit unseemly and might possibly even enflame the debate.
And it doesn’t help that black and Latino legislators have been upset at IDOT and road contractors forever because of their truly lousy minority hiring records. They might look at this statement as tossing the poor over the side in order to employ more white men. Did anybody over there bother to think of that? Of course not. It’s IDOT.
Try harder, please.
* Related…
* U.S. investigating IDOT payments for jobs program
posted by Rich Miller
Tuesday, May 1, 12 @ 10:21 am
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The connections between pensions/Medicaid and roads are ludicrous. It’s not an either/or.
As far as bonding costs, they’re as cheap as they’ve ever been, despite the state’s current ratings.
Comment by wordslinger Tuesday, May 1, 12 @ 10:26 am
If we only had a video poker machine or two running to help pay for this…
Here is an idea on how to save the state budget, put Jaffe in charge of everything, no project would ever get approved.
No project, no spending…
Comment by OneMan Tuesday, May 1, 12 @ 10:29 am
Another example of a BLAGO staffer that should have been long gone. So much for Fumagation.
Comment by He Makes Ryan Look Like a Saint Tuesday, May 1, 12 @ 10:37 am
What a clueless statement to attach on a press release announcing the expenditure of billions of dollars.
“We’re going to spend $9.2 billion on roads over the next 6 years. Cutting pensions and Medicaid makes sure we can spend every dollar!”
The more things change at IDOT, the more they stay the same.
Comment by Freeman Tuesday, May 1, 12 @ 10:38 am
Rich, shouldn’t you wonder why minority legislators wouldn’t be upset with unions over lack of minorities on road job sites? It’s their work rules re: seniority that perpetuate the “truly lousy hiring record.” And unless IDOT is going to engage in illegal quotas, there’s not a lot that can be done about those “white men.”
Finally, the road fund is financed through a gas tax, which is a user fee. If politicians want to con the public by claiming their gas taxes go back into infrastructure but instead secretly and illegally diverting them to social programs wholly unrelated to roads and bridges, they should do so and withstand any consequences.
Mr. Miller, you outrage here is absolutely misplaced.
Comment by phocion Tuesday, May 1, 12 @ 10:38 am
===Rich, shouldn’t you wonder why minority legislators wouldn’t be upset with unions===
Of course they’re upset with the trades. Where have you been for the last four decades?
Comment by Rich Miller Tuesday, May 1, 12 @ 10:40 am
IDOT is spending 40 million dollars to study how to improve the circle interchange in Chicago. 40 million dollars just to study. No concrete being poured no dirt being moved. Hmm I wonder what kind of campaign contributions this waste of tax dollars will result in. I’m guessing in the near future someone high up in IDOT will get a nice job at an engineering firm.
Comment by Fed up Tuesday, May 1, 12 @ 10:41 am
I worked for IDOT for over 20 years and they are famous for feel good programs. Summer workers for the County Chairs kids and the local district offices full of kids wandering around year round making 12 to 15 bucks per hr. Then the yards hire temp help in the winter that works 40 hrs a week and over time when it snows. They give road funds to all type of civic programs and such. When they talk about reducing my pension or cutting my insurance that I worked for I have to ask when are you going to cut the waste and work with a budget that larger than some countries?
Comment by Nieva Tuesday, May 1, 12 @ 10:41 am
“…which are putting hundreds of thousands of Illinois residents back to work…” really? hundreds of thousands? must be that wonderful ripple effect going thru the concrete. or asphalt.
Comment by langhorne Tuesday, May 1, 12 @ 10:49 am
The link to the SJ-R story “U.S. investigating IDOT payments for jobs program”, indicates that Quinn actually promoted Director Ann Schneider after participating in wrongdoing at her department. Maybe we should be promoting ethical employees instead of Quinn’s unscrupulous functionaries. An honest and ethical approach to governing could go a long way to help our state.
Comment by Honestly Tuesday, May 1, 12 @ 10:55 am
from a 2010 poll of 1000 Illinoisans conducted by Pew Center on the States:
1) Area of the budget to most protect from cuts:
53% - Education
27% - Medicaid for low-income residents
12% - Higher education
5% - Transportation
2) Spending area to least protect from cuts
55% - Transportation
17% - Higher education
17% - Medicaid
7% - K-12 Education
3) Spending cuts: Preference for across-the-board v. Targeted cuts
29% - Across the board
69% - Better to cuts some areas than others
4-9) Willing to PERSONALLY pay higher taxes in order to prevent cuts to:
70% - Education
57% - Health and human services
46% - Higher education
21% - Prisons
20% - Transportation
I understand — or atleast think I understand — the game being played here. Promise the building trades lots of new jobs and hope you can drive a wedge in organized labor so that they’ll throw AFSCME, SEIU and IFT under the bus.
Silly rabbits.
All you’ve done is put the message out there that these budget cuts aren’t being driven by fiscal necessity but rather to enable the state to borrow billions so that it can fund projects in someone else’s district.
Moreover, you’re suggesting that if we expand gambling to pay for capital projects, we don’t need to cut health care for the elderly, people with disabilities and low income families or retired police and teachers.
Comment by Yellow Dog Democrat Tuesday, May 1, 12 @ 10:58 am
Let them eat asphalt!
Comment by Secret Square Tuesday, May 1, 12 @ 11:00 am
@Nieva - bingo. There are still some very qualified professionals at IDOT, but even they are drowned out and overrun by the “connecteds”.
Comment by Freeman Tuesday, May 1, 12 @ 11:00 am
I can retire after 21 years of service on Sept.1st; I’ll be getting a pension of about $1300/month. I don’t even know how much healthcare is going to cost, but I am very worried that I won’t be able to afford it. This broken promise will affect me badly.
Comment by unhappy Tuesday, May 1, 12 @ 11:44 am
The fierce urgency of now. The state is in trouble now. The recession is now, and the state’s deficit is now. The majority of the pension underfunding is caused by the recession now. The majority of the problem with the vast increases in state pension payments is caused by the backloaded pension ramp now. Now, current spending needs to be cutback. Now, current revenues need to be increased; thank you temporary state income tax increase (state employees are paying that too). Now, medicaid needs to take some hits. And now, the state pensions need to take some hits…but the pension has a now component, but it’s mainly a program whose benefits are future costs. Would everyone involved in the pensions, be willing to give some skin now? I think they would, but we’re talking about gutting a program of mostly future benfits that many have invested in their entire working lives, NOW, and FOREVER into the future. Decades, in some cases over 3 decades. Those long term employees and annuitants don’t get a do-over, and those on fixed incomes can’t easily bite the bullet NOW, but they probably would agree to NOW, to get the state past this recession-caused financial disaster that is happening right NOW.
But now is fleeting. Most of the changes being proposed to the pension are permanent, effecting state employees and annuitants for the rest of their lives. During bad times, families cut back on expenditures; no more eating out; more pastas, and less steaks; they hold onto the old car longer; they make due to get past the bad times, but these bad times aren’t forever, and when this recession is past, and everyone has tightened their belts to get the state through the bad times, the right thing for the state to do, would be to restore the promises made to their employees that relied on them for the long term.
Many here are opposed to the pensions, unions, medicaid etc for ideological reasons. Their solutions will definitely work to get the state through the recession now, but will hit state employees well past now and far into the future. I’ll never go for a “solution” that solves the fierce need to save money NOW, that absolves the state (ALL of us) from keeping that promise once we get past these tough times.
I certainly don’t expect the hits Medicaid is taking now to be permanent. I’d bet anyone that they won’t be. Let’s look at asking employees and possibly annuitants to take a hit now, but let’s make it temporary. That’ll get the state through these hard times, but hold the state to the reasonable promises it’s made in the past.
Comment by Anonymous Tuesday, May 1, 12 @ 11:44 am
Sorry. That last post @11:44 is from me.
Comment by PublicServant Tuesday, May 1, 12 @ 11:45 am
YDD: interesting thoughts. you might just be more clever than the person who made the statement.
Comment by mark walker Tuesday, May 1, 12 @ 12:08 pm
A lot of the Transport funding issues are due to the inability of the Federal House to pass any sort of highway bills.
YDD has so many good points but the trade unions and the civic cluba and really anyone needs to take not of is how the Quinn plan undermines contracts. It means any contract can be altered by coercian of the more powerful side
Comment by western illinois Tuesday, May 1, 12 @ 12:31 pm
Great post PublicServant
Comment by roadiepig Tuesday, May 1, 12 @ 12:55 pm
@mark walker:
Thanks, but I’m not sure cleverness has anything to do with it.
Good government, I always say, begins with “listening.”
But it requires ACTIVE listening, actually understanding what voters are saying instead of hearing what you’d like to hear.
Over the past decade at least, roughly 2/3 of voters have said that the state budget should be balanced by eliminating waste.
Republicans and many Democrats hear that as “don’t raise my taxes.”
But when you really dig down into the data — and there’s mountain of it — what voters are really saying is “don’t balance the budget by cutting the things care about.”
When push comes to shove and voters understand that there is no $7 billion line item in the budget for “Waste and Fraud”, the majority of voters are willing to pay for the things they care about, even a bit more, provided state government can demonstrate that its managing those programs as efficiently as possible and delivering measurable results.
Comment by Yellow Dog Democrat Tuesday, May 1, 12 @ 12:59 pm
public servant: the problem with temporary is that it is usually not temporary. i seriously doubt the GA would restore the pension cuts when the state is back in the black (which it will probably never be) give them more money and they will find a way to waste it.
Comment by wizard Tuesday, May 1, 12 @ 1:02 pm
Rich, where are your facts to back up the claim that road contractors have a lousy minority hiring record?
Comment by McPartlin Tuesday, May 1, 12 @ 1:03 pm
YDD said,
“When push comes to shove and voters understand that there is no $7 billion line item in the budget for “Waste and Fraud”, the majority of voters are willing to pay for the things they care about, even a bit more, provided state government can demonstrate that its managing those programs as efficiently as possible and delivering measurable results.”
Aye, here’s the rub. I agree 100% with your sentiment, the question is how does the government gain the credibility to show the money is being spent wisely. We’ve had the tax increase which is very easy to understand, and while there may have been efficiencies made at the same time, they are not apparently measurable or easily understood (if they were made at all).
I feel it is incumbent for the spending side of the issue to be addressed. Unless the taxpayers see some pain, they cannot appreciate nor understand the proper size of government. It is possible, though probably unlikely, that some of the cuts needed to be made, and the associated pain, will be accepted by the taxpayer. Right now, all we have to present to the taxpayer is an increased income tax and an increasing debt. Not a sale that’s easy to overcome.
Comment by Cincinnatus Tuesday, May 1, 12 @ 1:37 pm
>>>As far as bonding costs, they’re as cheap as they’ve ever been, despite the state’s current ratings.
Comment by Soothsayer Tuesday, May 1, 12 @ 1:40 pm
Illinois Faces 25% Cost Increase to Borrow $1.8 Billion
http://www.bloomberg.com/news/2012-04-30/illinois-faces-25-cost-increase-to-borrow-1-8-billion.html
Comment by Soothsayer Tuesday, May 1, 12 @ 1:41 pm
===Illinois Faces 25% Cost Increase to Borrow $1.8 Billion===
Go read the story. That hed and lede are really misleading.
Comment by Rich Miller Tuesday, May 1, 12 @ 1:48 pm
==Rich, where are your facts to back up the claim that road contractors have a lousy minority hiring record?==
Good question!
Comment by phocion Tuesday, May 1, 12 @ 3:13 pm
===Illinois Faces 25% Cost Increase to Borrow $1.8 Billion===
=Go read the story. That hed and lede are really misleading.=
I agree that they were misleading, and it is a financial news site too, so they should know better. And they didn’t bother to calculate what the cost to the state is of having to pay 1.85% rather than 1.51%. 10 year note for $1.8 Billion - roughly $60 million in increased interest expense over the life of the bond, or $6 million extra per year.
Small potatoes, and solving pensions / budget / getting republican leaders to stop saying how lousy Illinois is - could help to lower rates on future bonds.
Comment by Robert Tuesday, May 1, 12 @ 3:28 pm
most people dont have a clue how much money IDOT is wasting. They make rita crundwell look like a saint
Comment by foster brooks Tuesday, May 1, 12 @ 4:08 pm
==most people dont have a clue how much money IDOT is wasting.==
Count me as most people. Thankfully, most of the money they may be wasting is money from taxpayers fo the 49 other states, thanks to generous federal highway dollars.
Comment by Robert Tuesday, May 1, 12 @ 4:27 pm
Uh, Robert. No. Illinois is a net donor to the federal highway trust fund. So, not only are those who pay at the pump subsidizing non-transportation related programs, they’re also subsidizing other states’ programs, too.
Comment by phocion Tuesday, May 1, 12 @ 5:45 pm
@Cincinnatus-
In the world of public policy “proving” that a program delivers measurable results is about as hard as “proving” evolution. You can provide evidence, but in the end “proving” something conclusively or putting systems in place to assure maximum efficiency almost always costs more than the actual efficiencies achieved.
Its the old 90-10 rule: it takes 10% of effort to achieve 90% efficiency and 90% more to achieve an additional 90% efficiency.
Case in point: 50 states are spending tens of millions each to administer the standardized tests required under no child left behind. Thats hundreds of millions of dollars that arent making our kids one iota smarter, just telling us how smart they are.
Frankly, a better, faster and cheaper way to evaluate school districts, schools and teachers would be to let students and parents vote on Facebook and add comments.
What’s the answer then? My experience is that no matter how efficient government is, people will not perceive it as being efficient if they have a conflicting personal experience and unless government’s efficacy is confirmed by trusted third party sources.
Its one thing when one of the Usual Suspects warns against further cuts, but when someone like the Illinois PTA, League of Women Voters, or Council of Churches says we’re outta places to cut, thats another story.
Ultimately, this is the purpose of Budgeting for Results, and ideally groups like these would be represented on the Budgeting for Results Commission.
Moreover, research shows that voters really don’t understand the ABC’s of state revenue and spending, and the best way to help them understand and earn their support for the ultimate budget–even when its not what they hoped for–is to give them real and meaningful input in crafting the budget.
Comment by Yellow Dog Democrat Tuesday, May 1, 12 @ 6:55 pm
Ethics test begins in a couple of weeks. I hope secretary Schneider takes the time to take her test.
Comment by Old timer Tuesday, May 1, 12 @ 8:32 pm