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A few budget items

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Illinois

* The Tribune is calling it the re-election budget…

Republican Gov. Bruce Rauner on Wednesday proposed a reelection-year budget that takes aim at two of his favorite targets — Chicago Public Schools and unionized state workers — while attempting to put Democrats in a political trick bag.

The $37.6 billion spending plan seeks to cut $228 million in pension help CPS won in last year’s budget battle and also to cut state health care insurance by $470 million. […]

But Rauner’s fourth budget proposal also is at odds with his campaign rhetoric. The governor has been campaigning for years on the idea of cutting property taxes, but his budget would result in school districts raising property taxes to pay for the teacher pension costs he wants to offload on them.

The governor also has slammed Democrats and Republicans who voted to hike income taxes last year, but his budget plan relies on spending nearly all the money the tax increase brings in.

While Rauner lays out a “path” to eventually lowering the income tax rate by a quarter of a percentage point, the cost savings needed to put money back in Illinois paychecks relies on cutting teacher and state worker pensions in a way that could be tied up in the courts for years or deemed unconstitutional and tossed out entirely.

The cost-shift is being slammed by Democrats and Republicans alike. I doubt it’s going anywhere, but it’s an easy way of finding a half billion dollars to make the budget look more balanced. This excerpt from a Chris Kennedy press release pretty well sums up most of the opposition…

He says he wants to cut taxes, but the truth is, he wants to further burden local property taxpayers.

Under his new plan, local governments would be required to take on the responsibility of paying the costs of teacher pensions. That will increase taxes on local property taxpayers who are already overburdened. This is fundamentally what’s wrong with our broken system.

We are over-reliant on property taxes to fund our public schools, and now Governor Rauner is putting more burden on local property taxpayers with no reforms to our broken system. Governor Rauner and political insiders in Springfield have bred cynicism across our state.

* Cullerton explained later that the governor’s proposal is out of balance by $1.5 billion because most of the statutory changes Rauner will need cannot pass…

Earlier Wednesday, Rauner met with the four legislative leaders for the first time in more than a year to review his budget proposal. Cullerton left the meeting saying he believes the budget is $1.5 billion out of balance. Senate Republican Leader Bill Brady of Bloomington said he thinks the plan is balanced even though some of the measures Rauner is calling for will prove controversial.

* Sun-Times…

The budget, he said, “is running a huge deficit that proves the point.”

“Unfortunately I was right in that veto,” the governor said.

Instead, he said his budget approach this year is “decidedly different.”

“We see the budget as an opportunity to set priorities without spending beyond our means,” Rauner said. “It is a framework designed to spark a constructive dialogue on the steps we need to take to resolve the state’s financial issues.”

Yes, this fiscal year’s budget is out of balance, but it’s not as nearly in the red as the two years when the state didn’t have a budget.

* Sen. Heather Steans chairs the Senate Appropriations 1 Committee and wasn’t horrified by what she saw today…

“This is the closest the Rauner administration has ever come to a real, balanced budget, which I appreciate. That said, I have some serious concerns about his cuts to human services, Medicaid and retired pensioners to whom we have a contractual obligation. I look forward to working across the aisle to tackle Illinois’ fiscal challenges.”

Here are some of the human services cuts she’s talking about…

* The Administration proposes a 5-8% funding reduction to the following programs:

o The Autism Program
o Infant Mortality
o Addiction Prevention
o Supportive Housing Services
o Arc of Illinois
o Best Buddies
o Children’s Place
o Chicago Area Project
o Immigrant Integration Services
o Epilepsy Services
o West Side Health Authority Crisis Intervention

My own impression is that it’s not as goofy as some of his previous budget proposals. It’s not horrible. But some big assumptions will have to change before this can be brought into balance.

posted by Rich Miller
Wednesday, Feb 14, 18 @ 2:34 pm

Comments

It’s a good starting point.

Whatever the general assembly does is probably crap just to scrap by until after the election (i.e. Quinn’s budget)

Comment by Politically incorrect Wednesday, Feb 14, 18 @ 2:40 pm
Is a property tax freeze still being considered by the GA? I can not imagine how some school districts will handle a property tax freeze and an uptick in their pension obligations.

Comment by Soothsayer Wednesday, Feb 14, 18 @ 2:46 pm
In his fourth try he finally gets a D.

Comment by Anonymous Wednesday, Feb 14, 18 @ 2:47 pm
Funny, Madigan has wanted “cost shift” for years. That used to come up all of the time.

Most districts wouldn’t raise their tax rates because they are maxed out. Some could, but those districts are usually the ones in good shape financially.

The ones that can’t would have to do a lot of Riff’ing to get to a tenable financial position.

This is par for the course in Illinois these days, we will give you EBM money but cut CPPRT and MCAT’s or just not pay them at all. It is all new money on paper but the reality is not nearly as good.

Comment by JS Mill Wednesday, Feb 14, 18 @ 2:47 pm
==- Politically incorrect - Wednesday, Feb 14, 18 @ 2:40 pm:==

A starting point for what? Another ultra right-wing Rauner fantasy?

Comment by Precinct Captain Wednesday, Feb 14, 18 @ 2:53 pm
The most important element of today’s show was GovJunk kept his streak for producing laugh out loud reaction from legislators — from his eight year phase in of a minimum wage hike below the rate in Chicago to today’s tax hike scheme — the laugh is the most consistent reaction.

Comment by Annonin' Wednesday, Feb 14, 18 @ 2:56 pm
==A starting point for what? Another ultra right-wing Rauner fantasy?==

To begin talks of a final budget. Republicans may not like some things, Dems the same. But Rauner’s budget should be a starting point, not a political name game.

Comment by Politically incorrect Wednesday, Feb 14, 18 @ 3:02 pm
==But Rauner’s budget should be a starting point==

The spending lines, sure. The pension thing and school cost shift magic wand waving are DOA. The pension thing because it’s unconstitutional (much though I wish it weren’t), the cost shift because it’s unproductive political gamesmanship that allows him to pretend he’s funding schools without actually doing so.

Comment by PJ Wednesday, Feb 14, 18 @ 3:07 pm
The man has lost whatever touch he has with the people who put him in office. This run has been a failed experiment and I’m saddened to say that I helped put him in there. I guess I am partially to blame but I don’t see any qualified candidates for the position on the horizon. This election will only make me want to move sooner. We’re going down people….

Comment by Gary Forby's Caddy Wednesday, Feb 14, 18 @ 3:08 pm
==The spending lines, sure. The pension thing and school cost shift magic wand waving are DOA. The pension thing because it’s unconstitutional (much though I wish it weren’t), the cost shift because it’s unproductive political gamesmanship that allows him to pretend he’s funding schools without actually doing so.==

I think it’s fair that schools should have to pick up some cost in terms of the pensions, but perhaps not all. They were/are responsible for pension spiking, albeit that’s changed lately with the 6% cap.

Comment by Politically incorrect Wednesday, Feb 14, 18 @ 3:10 pm
The educational funding part is almost the opposite of what is supposed to be happening today. I don’t remember the exact wording but the state is supposed to be supplying the “bulk” of the education budget and the property tax money supplemental. Over time the property tax money became more and more of the educational districts money and now we have budget problems so the state says local governments should fund schools and local governments say the state should supply more money. Finger pointing all around. How about we make it one or the other and go with it?

Comment by Maximus Wednesday, Feb 14, 18 @ 3:12 pm
==schools should have to pick up some cost==

I don’t necessarily disagree with that conceptually. But we just passed a landmark bill to increase school funding, and Rauner hailed it as his #1 achievement. Now he wants to offset essentially the entire increase by foisting more pension costs on them?

Comment by PJ Wednesday, Feb 14, 18 @ 3:13 pm
===. They were/are responsible for pension spiking, albeit that’s changed lately with the 6% cap.===

Why 6%?

Are you trying to close districts or is 6% something you feel these broke districts still can work… with a 3%, 4%, even 5% property tax increase?

This isn’t a “1-time” cost, nor is it a “She-Caw-Go” problem.

Comment by Oswego Willy Wednesday, Feb 14, 18 @ 3:14 pm
- Politically incorrect -

Apologies.

I read that as an additional 6% tax levy, that’s on me. My bad.

Comment by Oswego Willy Wednesday, Feb 14, 18 @ 3:18 pm
==Why 6%?

Are you trying to close districts or is 6% something you feel these broke districts still can work… with a 3%, 4%, even 5% property tax increase?

This isn’t a “1-time” cost, nor is it a “She-Caw-Go” problem.==

I was referring to the 6% annual salary
increase cap before the state starts making the districts pay more.

As you said earlier, “Google it.”

Comment by Politically incorrect Wednesday, Feb 14, 18 @ 3:18 pm
My apologies. It was my mistake, like I said.

Comment by Oswego Willy Wednesday, Feb 14, 18 @ 3:20 pm
Is Steans on drugs? No plan for backlog, fictitious savings, but she acts like it’s close to balanced?

Comment by Anonymous Wednesday, Feb 14, 18 @ 3:20 pm
Sorry, typed that in before I read that your last comment

Comment by Politically incorrect Wednesday, Feb 14, 18 @ 3:21 pm
==But Rauner’s budget should be a starting point, not a political name game.==

Raising property taxes for every homeowner in Illinois should be the starting point? Is Mike Dukakis governor right now? Because I could have sworn that the budget address was presented by a guy who spent the last four years repeatedly promising to combat high property taxes.

Comment by Lester Holt’s Mustache Wednesday, Feb 14, 18 @ 3:23 pm
Did you not notice. He did not say the words property taxes a single time. He doesn’t want people to realize his plan will cause them to jump.

Comment by Union thug Wednesday, Feb 14, 18 @ 3:29 pm
Rauner is going to try and break the pension promise to get Illinoisans a quarter of a percentage point on our income tax? Wow. How generous.

For the median household income this would save them about $150 a year in income tax. Real game changer there…

Of course when your income is well into the tens of millions that works out to more than a hundred thousand dollars of taxes you aren’t paying. Nearly $400k based on Rauner’s recent income.

After 2 years of destroying the state’s social safety net the tax rate went back to nearly what it was before the whole mess. The difference in my paycheck wasn’t enough to order takeout for my family.

Is it really worth spending months of fighting in court to gain the average household money for an extra tank of gas every few months at the expense of all the people that have spent their careers working for the state?

Comment by Not It Wednesday, Feb 14, 18 @ 3:32 pm
==Raising property taxes for every homeowner in Illinois should be the starting point? Is Mike Dukakis governor right now? Because I could have sworn that the budget address was presented by a guy who spent the last four years repeatedly promising to combat high property taxes.==

Personally, I don’t think you can get property taxes under control until you get control over the massive amounts of layers of government. Here where I live, there’s the city, library, park district, fire department, county, township, road district, mental health district, mosquito abatement, etc. etc.

In other parts of the country, generally the county or city handles most of what is above. The only part of the Illinois where that’s true is Chicago. There’s no mosquito abatement, separate taxing fire department, separate library taxing body etc etc. All of those are handled by the city.

When I was in Georgia, the county handled schools, libraries, parks, etc. Not saying it was a perfect model, but definitely better than what’s here.

Comment by Politically incorrect Wednesday, Feb 14, 18 @ 3:34 pm
=Now he wants to offset essentially the entire increase by foisting more pension costs on them?=

$350m went into it last year.
The MFL says another $350m goes in on top of that this year.
So $700m this year.
He’s basically proposing to offset most of the second $350m, or half of the FY19 EBM money. So they would be slightly better off than last year.

Not defending it, just explaining.

The MFL would require another $350m next year as well. And the year after….

Comment by m Wednesday, Feb 14, 18 @ 3:40 pm
The budget, he said, “is running a huge deficit that proves the point.”
“Unfortunately I was right in that veto,” the governor said.

Says the governor who wants $1.1 billion in spending added to the current year’s budget albeit with no revenue to back it up.

Said differently: Rauner wants to triple the deficit in current budget. (I think a triple deficit gets you gold in PyeongChang)

Comment by Michelle Flaherty Wednesday, Feb 14, 18 @ 3:42 pm
One wonders if we had competently managed our Casino licenses if the Teachers Retirement System would be better funded? After paying $25k for a casino license, building a complex and pulling in in excess of $40 million a year with ten percent going into the Common School fund for several years, one Casino license in Peoria was sold by now convicted felon for $347 million to an out of State company. We privatized the vast majority of the revenue, cheated our schools and raised our property taxes. You simply cannot export hundreds of millions annually to New Jersey and Nevada gaming companies and have a health job creating environment.
We need to recognize having only one Casino pay the top gaming tax rate which doesn’t kick in until $200 million is a sham. The top Gaming rate of 50% is too low. We are being had. Let us step up our management of existing resources.
We need a billion a year increase in Liquor and Casino license monopolies.

Comment by Al Wednesday, Feb 14, 18 @ 3:51 pm
If you are on State health insurance, expect your payment cycle to move back out to between 2 and 3 years with this budget.

Comment by RNUG Wednesday, Feb 14, 18 @ 4:08 pm
$500,000,000 for Discovery Partners Institute?(exclamation point)

Comment by Henry Francis Wednesday, Feb 14, 18 @ 4:08 pm
As we have a discussion on these policies like, arguably, no other place but Capitol Fax can have, with a good mash up of both policy and politics. Good stuff.

To the Post,

We all need to keep in mind, too, as we discuss the problem, look at the numbers and try to figure out how viable this or that can be… the pushing of pension responsibility on the locals is also a prong Rauner uses to attack labor, both public sector and trades, thru collective bargaining changes, ending prevailing wage, and forcing a battle against labor as a “choice” … an “or”… a way to leverage a choice Rauner wanted the GA to make, but wouldn’t.

Dismissing the Labor angle, that would be a mistake.

Comment by Oswego Willy Wednesday, Feb 14, 18 @ 4:09 pm
Why does the Rauner administration dislike kids with autism so much? In 2015, he announced cuts to programs supporting kids with autism on world autism awareness day. And now this year, he targets autism support programs again.

Comment by Scamp640 Wednesday, Feb 14, 18 @ 4:14 pm
“In other parts of the country, generally the county or city handles most of what is above.” Not true. There are school districts, townships, fire protection districts, library districts, just in Sangamon county. You could argue to consolidate them, but (a) they all have different boundaries and (b) they don’t even all lie entirely in Sangamon county.

Comment by Skeptic Wednesday, Feb 14, 18 @ 4:21 pm
What’s with this guy and Autism programs? He’s had it out for them since Day One, and comes back at them time and again.

Is it because it’s been a pet project of Madigan’s?

http://es.easterseals.com/site/PageServer?pagename=ILCH_New_School

Comment by wordslinger Wednesday, Feb 14, 18 @ 4:29 pm
Great catch Henry Francis
It’s the new
Intersect Illinois
And they can publically fund it.
Wow
Blown away

Comment by Honeybear Wednesday, Feb 14, 18 @ 4:47 pm
=It’s the new
Intersect Illinois=

http://innovation.uillinois.edu/

Comment by m Wednesday, Feb 14, 18 @ 5:07 pm
Great. Balance the budget on the backs of those with disabilities. Great plan. Seems to always be on the backs of those without a voice to fight back. Give a Republican long enough and they will find a program benefiting people with disabilities that they want to gut. They simply can’t help themselves.

Comment by Downstate Dem Wednesday, Feb 14, 18 @ 5:41 pm
Discovery Partners Institute. Aka. Good old boys network. This is also why we need to slash higher ed. Start at 5%.

Comment by Blue dog dem Wednesday, Feb 14, 18 @ 7:52 pm
Skepticism about the “Discovery Partners Institute” seems well-founded to me as well. Looks like a pricier version of the “Carle-Illinois College of Medicine” where Big Medicine in C-U took Kennedy and Phyllis Wise for a quick $100 million. Nice new building, though.

Comment by Arthur Andersen Wednesday, Feb 14, 18 @ 8:11 pm
- RNUG - Wednesday, Feb 14, 18 @ 4:08 pm:

If you are on State health insurance, expect your payment cycle to move back out to between 2 and 3 years with this budget.

What do you specifically mean by this? Can you go into a little more detail?

Comment by Sparky791 Wednesday, Feb 14, 18 @ 11:18 pm
== What do you specifically mean by this? Can you go into a little more detail? ==

During the 2 year budget impasse, the State was paying employee / dependent health insurance claims as much as 2 years late. Once the State passed a budget, the Comptroller tried to get more current because the State was paying 9% - 12% interest on those unpaid claims.

Traditionally, the State has always under budgeted for employee health insurance, so they can’t pay all the claims submitted in a year. They are always paying last year and two year ago claims with this year’s money, so there is no money left for current claims. Rauner’s latest budget proposal significantly cuts the amount budgeted for employee health insurance. So the State will have to slide back into delaying payments again. I’m just predicting, in a year or two, it could get out past the 2 year cycle it previously hit.

Comment by RNUG Thursday, Feb 15, 18 @ 3:05 am