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The new state budget could be a tight squeeze

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Illinois

* My weekly syndicated newspaper column…

House and Senate Republicans claimed during budget-related floor debate last week that the super-majority Democrats had masked the true size of their plan by delaying the start of some spending until the second half of the upcoming fiscal year.

Yes and no.

Republicans pointed to the $317 million to increase Medicaid provider reimbursement rates, including for hospitals. But that new spending doesn’t begin until Jan. 1, the halfway point in the 2024 fiscal year, which begins July 1.

And so, basic arithmetic means the rate increase in Fiscal Year 2025 will be double FY24’s cost, because that 2025 spending will cover all 12 months, instead of just six. That means the state will start the following fiscal year with at least a $317 million hole.

Sometimes, it takes time to stand up new programs, so state spending can’t justifiably begin for a while. That’s the case here as well, according to the governor’s office, which says the higher reimbursement rates can’t start until the state applies for and receives permission from the federal government. And that can take a while.

Also, $317 million is only 0.6% of the $56.6 billion state spending plan. Not much in the grand scheme of things.

While that $317 million is small in context, just think about how much scrambling the Democrats had to do during the past couple of weeks of spring session to collect enough crumbs under the couch cushions to pull its appropriations bill together.

First, they blew well past their self-imposed May 19th adjournment deadline because they couldn’t agree on a spending package. And even then, it took 24 hours after the state’s top Democrats announced a budget agreement until an actual budget bill surfaced, because of even more scrambling. And the budget agreement announcement itself was delayed by about an hour because of even more scrambling over relatively small amounts of money.

The Democrats also only built a $100 million cash cushion into this plan, or about 0.2% of total spending. That doesn’t leave them any room if their revenue projections are too low by a tiny fraction, or if spending is higher than anticipated.

Some Republicans pointed to the $550 million in increased spending to cover the exploding health care costs for undocumented residents as the reason why Democrats had to get so creative elsewhere. Medicaid providers, they said, could’ve received more money if not for that.

That’s true, but only in the abstract. Yes, proponents (including legislators) and the Pritzker administration vastly underestimated what the health care program would cost and how many folks would enroll. And, yes, the governor waited until this spring to turn to the legislature for either statutory relief or the full, guaranteed legal authority via authorized emergency rules to rein in costs in a way that can survive a barrage of lawsuits. Mistakes, as they say, were made.

In the real world, you can’t just wish away problems. “If only” is a fine game for pundits and politicians. But it doesn’t do you much good when building an actual state budget, which, unlike federal spending plans, can’t rely on simply printing more dollars.

No matter how much some Democrats may have privately grumbled about those massively increased costs, they would not publicly trumpet any sort of solution that kicked thousands of people off health care coverage (“Health care is a right” is a longtime Democratic Party talking point, after all) and forced hospitals and other medical providers to go back to treating them without any reimbursements.

And even though there was definitely some resistance and bitterness about those unexpected costs, Black legislators have wisely not had an appetite to publicly inflame the current tensions in Chicago, where some local Black leaders and conservative whites are grabbing headlines by echoing angry Fox News talking points about the costs of caring for the influx of mostly Latino asylum seekers.

While some Democrats clung to the notion that Gov. J.B. Pritzker had the authority to rein in costs without their assistance, they also saw the almost daily and widespread court battles throughout the pandemic over the governor’s use of emergency rules and executive authority.

Determined lawyers on the other side tied the attorney general’s office up in knots throughout the pandemic and have so far succeeded at stymying the implementation of both the SAFE-T Act and the assault weapons ban.

Lawsuits over limiting enrollment and putting undocumented immigrants into managed care programs might still be filed, but the state will be on much firmer legal ground by specifically allowing the governor to file emergency rules.

* Meanwhile, from the Latino Caucus…

Illinois Legislative Latino Caucus members released the following statement following the passage of the Fiscal Year 2024 state budget:

“We are pleased to report our progress in passing a state budget that focuses on the people. There are historic investments in early childhood education and more resources than ever to support students from working and middle class families on their path to receive a more affordable college education with the help of MAP grants, among other accomplishments that invest in our people and the future of our state.

“Illinois will continue to be a beacon of hope for those seeking a better life. In the coming year, we will devote $25 million to Welcoming Centers, which assist in integrating immigrant and refugee communities into our state, another $38 million will be devoted to Immigrant Integration programs that help immigrants on their pathways to citizenship and over $40 million to respond to the arrival of asylum seekers. We are committed to making Illinois one of the most welcoming states to immigrants.

“We are proud of the work to make Illinois the first state in the nation to offer Medicaid-like benefits to non-citizens. Thanks to this initiative, 50,000 more people, 42+ years old, receive preventive care, contributing to healthier communities, reducing the pressure over hospital emergency rooms, and saving taxpayers money. Lives have been saved because of this program.

“The need for the healthcare coverage we fight for is because of the real people and their real needs in the communities we represent. These are communities that contribute to our state often with nothing in return. While we were not able to expand coverage this year, the Illinois Legislative Latino Caucus has not given up, and we will not give up pursuing closing the age gap of coverage.

“Latino lawmakers are here in Springfield to represent the interest of the communities we represent, both in our districts and all Latino/x community members throughout the state; communities that have been historically disenfranchised and underserved, all while being taxpayers and contributing to our state in numerous ways. Our job as legislators is to fight for the resources our communities need and deserve, and to change the vicious trend of using Latino/x and immigrant communities as political pawns. We will continue to be their voice in Illinois and fight on their behalf, because that is what our communities need and deserve.”

posted by Rich Miller
Tuesday, May 30, 23 @ 8:50 am

Comments

Overall, it’s actually a pretty decent compromise budget. Just hope it doesn’t get derailed through unexpected expenses later in the year.

Of course IPI doesn’t think it’s a good budget. Already received their email falsely claiming it’s $4B out of balance because it doesn’t make the actuarial pension payments, just the scheduled ramp payments … with no mention of the ramp. They’ve got other gripes about the budget also, but that was their lead item.

Comment by RNUG Tuesday, May 30, 23 @ 9:22 am
Looks like there is no room for Welfare for the Bears!

Comment by Jerry Tuesday, May 30, 23 @ 9:28 am
IPI are a one-hit wonder when it comes to pension. It doesn’t matter what the story is about they are always going to bring it back to pensions and then state that we need to take pensions away from people. Why anyone would ever take that organization seriously is beyond me. They are on an anti-pension crusade.

Comment by Demoralized Tuesday, May 30, 23 @ 9:50 am
If Illinois made the largest possible pension payment, IPI would then complain that we are grossly overspending on pensions and ignoring other areas of the budget. No satisfying them so don’t try and satisfy them.

Comment by DuPage Dad Tuesday, May 30, 23 @ 9:56 am
I gave full credit to the Pritzker admin and the leaders in the legislature. This was a good, disciplined budget.

Comment by Mr. Middleground Tuesday, May 30, 23 @ 9:57 am
- the first state in the nation to offer Medicaid-like benefits-

I wonder if this is legal. But, I know that will take a long time to make it through the courts. Anyway, it is expensive. But, that’s what Illinois voters want. I hope the Illinois economy stays strong because it’s going to need all the revenue it can get.

Comment by Steve Tuesday, May 30, 23 @ 10:14 am
==$317 million is only 0.6% of the $56.6 billion state spending plan. Not much in the grand scheme of things.==

And Invest in Kids cost only a third of that.

Comment by City Zen Tuesday, May 30, 23 @ 10:47 am
==And Invest in Kids cost only a third of that.==

That’s a policy decision. Doesn’t matter whether we could afford it or not. The decision was made to not fund private education.

Comment by Demoralized Tuesday, May 30, 23 @ 10:49 am
===And Invest in Kids cost only a third of that.===

“Again”, a budget is the monetary and truthful weight and measure of policy.

You can talk about policy, but funding (or not funding) programs is the truth to backing policy

The rest is rhetoric

Comment by Oswego Willy Tuesday, May 30, 23 @ 10:58 am
The tight squeeze seems ominous with State Employee contracts still to be negotiated. With the high inflation of the last two years those folks have a legitimate demand for some higher raises to catch up to inflation. They’re also not likely to love the idea of backloading the raises to make this budget look better.

Comment by Mason Born Tuesday, May 30, 23 @ 11:02 am
===State Employee contracts still to be negotiated===

They keep saying they put money in there for that. I suppose we’ll see.

Comment by Rich Miller Tuesday, May 30, 23 @ 11:06 am
==They keep saying they put money in there for that.==

They did. We’ll see if they put enough.

Comment by Demoralized Tuesday, May 30, 23 @ 11:28 am
–They keep saying they put money in there for that. I suppose we’ll see.–

Here’s hoping those were Rational assumptions.

Comment by Mason Born Tuesday, May 30, 23 @ 12:13 pm
==Here’s hoping those were Rational assumptions==

Depends on who you ask. Lol. I’m quite certain the union wouldn’t agree.

Comment by Demoralized Tuesday, May 30, 23 @ 12:16 pm
–Depends on who you ask. Lol. I’m quite certain the union wouldn’t agree.–

In this case I’d hope the assumptions lean more towards the Unions side. A little extra set aside seems better then not enough set aside.

Comment by Mason Born Tuesday, May 30, 23 @ 12:19 pm
**- the first state in the nation to offer Medicaid-like benefits- I wonder if this is legal.**

Yes, it is legal.

Comment by JoeMaddon Tuesday, May 30, 23 @ 1:13 pm
I hope some cool heads prevail and prevent what could be a growing fight and potential war between the Black & Hispanic Caucus’ in the General Assembly and the City Council.

Comment by levivotedforjudy Tuesday, May 30, 23 @ 4:05 pm
== prevent what could be a growing fight and potential war between the Black & Hispanic Caucus … ==

That’s going to happen one way or the other. The Hispanic Caucus is looking to gain power and the Black Caucus is trying to avoid surrendering power, ie, seats.

The only questions are whether the fight is going to be overt or covert, and how bad the infighting will be to maintain representation.

In one word, politics

Comment by RNUG Tuesday, May 30, 23 @ 5:25 pm
===The only questions are whether the fight===

You’re forgetting partisanship. It binds.

Comment by Rich Miller Wednesday, May 31, 23 @ 7:22 am