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A hurtful fraud

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Illinois

* Kudos to the Associated Press for pointing this out…

Chicago’s Civic Federation, for instance, issued a report Monday saying Quinn should quadruple the $1.1 billion in cuts he proposes for this year and next to more than $4 billion. But the federation listed only $41 million worth of potential cuts - less than 1 percent of the total.

That’s just beyond irresponsible. Here are the “cuts” the Civic Federation suggested…

* Eliminating the State subsidy for Coal Development and Marketing could yield $23.8 million annually;
* Eliminating compensation for appointed members of state boards and commissions could save up to approximately $6.6 million per year;
* Eliminating General Fund subsidies of the salaries of local assessors, supervisors of assessment and coroners could save up to $4.5 million per year;
* Eliminating State college tuition waivers granted by members of the General Assembly would generate up to $3.8 million in revenues;
* Eliminating agricultural research grants to public universities could save up to $2.2 million annually; and/or
* Ending the State subsidy for the DuQuoin State Fair, the State’s second state fair, could save $407,000 per year.

If somebody posted those cuts on this blog and suggested it was a budget solution, that person would be sharply ridiculed here.

* And I fully agree with Progress Illinois…

If the Civic Fed is so adamant about cutting the budget, why are their suggestions so puny? Probably because there’s very little lawmakers can actually trim without drastically scaling back the state’s education, health care, and social services programs. Once you dig into those areas, there is a human cost. So they avoid specifics. And then the local media outlets fail to point this out. (The Sun-Times even went so far as to describe the Federation as “shred[ding]” Quinn’s budget.)

Ralph Martire, executive director of the Center for Tax and Budget Accountability, told us yesterday that the Federation should explain exactly where the governor needs to slice costs. “There is no way there is $4 billion of fluff in this budget,” he tells us. “It’s irresponsible to just say, ‘Find $4 billion, good luck.’ If you call for cuts of this magnitude, you must have the integrity to tell voters where it’s coming from.”

Indeed, $4.25 billion represents about 15 percent of our $27 billion in General Funds spending (the other half of the state budget is covered by federal dollars).

Don’t listen to anybody who thinks such drastic cuts can be made if they don’t offer up at least a road map for getting there. Also, by reading the report, you’d never know that the Civic Federation understands the difference between the two halves of the state’s budget

You can read the full Civic Federation report by clicking here.

* Henry Bayer, the president of AFSCME Illinois, took a very sharp whack at the Civic Federation in a recent online column. While way over the top, he does make a good point: Lots of Civic Federation corporate members have tanked their own companies, so why listen to them?

* More budget-related stuff…

* ADDED: Two-tiered pension plan still in the works

* ADDED: Ill. Manufacturers look to regain state funding

* Gov. Quinn cancels IDOT ‘midnight raises’

* Corrections chief not surprised by Quinn’s plan for replacement: “I pretty much knew they were going to do this,” Walker said. “You work at the pleasure of the governor.”

* Tamms Correctional Center: Governor wants review of super-max prison

posted by Rich Miller
Wednesday, May 13, 09 @ 10:08 am

Comments

Maybe it’s time to get out of the higher education business or at least partially.Does Illinois need to subsidize so many universities? Also,cutting the pay of Illinois state workers should be looked at.Those workers that think they get make more money somewhere else should be encouraged to find employment elsewhere.Just imagine if Illinois what a right to work state: Illinois’ state budget would be a lot cheaper.

Comment by Steve Wednesday, May 13, 09 @ 10:16 am
The Civic Federation put itself in a pretty embarrassing situation. Like the poker players say, put up or shut up.

Comment by wordslinger Wednesday, May 13, 09 @ 10:20 am
Rich, thease are great questions and points that you raise. I hope you will have an opportunity to put them to Lawrence Msall and get his answers, or non-answers, as the case may be.

Comment by Willie Stark Wednesday, May 13, 09 @ 10:23 am
as far as articles on the Gov and Tamms are concerned then you should post the link the the Tribune Editorial on the subject today.

Comment by WOW Wednesday, May 13, 09 @ 10:24 am
How about the billions of undefined spending line items in the Blago budgets? How about the spending Blago did around the ILGA which was cited *as a reason for his impeachment*? How about all the prograns the auditor general can’t find? (And we do need a full forensic audit).

Comment by John Bambenek Wednesday, May 13, 09 @ 10:24 am
So, what bag of tasty treats is the Civic Federation holding close to its chest? Managed care for Medicaid? Constitutional amendments to reduce pension obligations? Tolls on the entire interstate system? The suspense is killing me!

Comment by Angry Chicagoan Wednesday, May 13, 09 @ 10:26 am
Allow me to summarize:

In this environment, anyone calling for cuts without mentioning what they would cut specifically (line by line and dollar amount) is irresponsible.

And if you brazenly DO call for cuts, and want to cut one of the biggies: education, health care, or pensions, watch out, you will be assaulted by boos.

If you *do* call for cuts that do not include any of the above, the cuts will not amount to anything substantial, so you are back to square one: being irresponsible.

So where do I send my check for my increase in taxes to?

Comment by Petey Wednesday, May 13, 09 @ 10:30 am
And, the Civic Federation also wants the Governor to increase spending, by making the statutorily required pension contribution. I suspect there is general agreement among commenters here that their advice in that respect is wise. The problem, of course, is how.

To their credit, the Federation does suggest additional revenue sources if the Gov and the GA can’t come up with the billions in cuts.

I guess I see the problem like this. Anyone who went into this process thinking that the Gov and the GA could solve even 50% of the deficit number thru cuts was delusional. I think PQ could make more cuts for 2010, but probably no more than $750M tops.

The Civic Federation has made a number of what I think are good suggestions regarding the budget over the past couple of years. But, when they bury those suggestions within fantasies regarding larger results, people tend to immediately recognize the fantasy and disregard the reports rather than unbundle the good suggestions and see if they can be done. I suspect that a significant percentage react that way because they figure that even if they take the heat and do two or three hard things, the CF will still criticize the overall result because it doesn’t realize their larger impossible dream.

But, who knows. The whole thing is a real mess.

Comment by steve schnorf Wednesday, May 13, 09 @ 10:31 am
If news accounts are accurate, Quinn and his squad of Blagojevich appointees badly mishandled the IDOC announcement. As I understand it, the incumbent was at home on medical leave and Quinn made the announcement that he was replacing him without prior notice. The fact that Walker says he knew it was probably coming doesn’t mean he didn’t deserve the courtesy of a call from Quinn.
He served for six years.

This is the kind of thing Blago was reported to do when he came on board. So maybe it’s not that surprising, given that the government is still being run by Blago loyalists, with Quinn providing cover.

Comment by Cassandra Wednesday, May 13, 09 @ 10:31 am
Actually, John Bambenek, the Civic Federation’s empty rhetoric dressed up as serious analysis is a hurtful fraud.

When you push the line that you can further cut the budget without decimating services, you are seeking to hurt people and hide the consequences.

Should we cut more from the state police labs, where the DNA testing backlog lets criminals walk free and strike again?

Should we cut more from DCFS, which investigated more than 266,000 reports of child abuse last year alone?

Maybe we should cut more from the EPA, which oversees the drinking water quality you say you are concerned about.

Or maybe we should slash IEMA, which responded to the storms in Southern Illinois. Or Public Health, which responded to the swine flu.

No, I’ve got it, let’s close the prisons. Or the human services offices. Or the unemployment offices. Or the veterans homes. Let the inmates and the jobless and those who served our country fend for themselves.

I don’t know if Larry Msall really wants to cut those things. Maybe he would rather slash Medicaid. Or public schools. Or the U of I. He doesn’t say.

He’s only willing to admit to wanting to shut down the Du Quoin State Fair. Big mistake. Maybe he should take his snake-oil act and go work there.

Comment by Reality Check Wednesday, May 13, 09 @ 10:45 am
Why does the Civic Federation get treated as a credible organization?

The Civic Federation has become a Johnny One-Note always calling for cuts to government.

I read one of the Civic Federation reports decrying the growth of local government and saying Chicago area local government needs to cut, cut, cut.

The problem? The data didn’t support the conclusions if one applied common sense.

The claim that local government was growing was untrue for all units of government, except school districts. Local government (minus school districts) were cutting.

School districts consume more resources. And the fad in education is to reduce class sizes. Therefore, school districts spend more money. And when school districts are lumped with other units of government, one can create the misleading impression that all local gov’t is growing.

But it seems an exceedingly dishonest way to analyze the situation.

If the Civic Federation wants to make the case that school districts should have larger class sizes, make that case.

If the Civic Federation believes that local government cuts are insufficient, make that case.

But to combine apples and oranges and claim the results show local government is growing when it’s really shrinking is garbage.

The Civic Federation may be able to raise money based on its politics or history. But based on the quality of work the organization produces, it shouldn’t get any money.

Comment by Carl Nyberg Wednesday, May 13, 09 @ 10:45 am
(My note above replies to a Bambenek comment that has apparently been deleted.)

Comment by Reality Check Wednesday, May 13, 09 @ 10:47 am
Eliminating State college tuition waivers granted by members of the General Assembly would generate up to $3.8 million in revenues….last time I checked this was an unfunded mandate that cost each University and therefore the programs’ elimination would not save a penny of state appropriated funds.

Comment by Jim Wednesday, May 13, 09 @ 10:49 am
It is a hurtful fraud because it glibly presents a non-solution as if it were the road map to fiscal propriety and a balanced budget. That is irresponsible for an organization that calls itself the Civic Federation and purports to have some interest in the general welfare of society. Easy for Msall and his corporate funders to not be too concerned for the consequences of their “plan,” but if there is anything we should have learned from the Bush years, it is that we need more political actors who are members of the reality-based community and fewer fabulists who believe they can create their own reality that the rest of us will just have to catch up to. The later approach didn’t work out so well and we will be paying the price for years to come.

Comment by Willie Stark Wednesday, May 13, 09 @ 10:50 am
To those who want to cut, cut, cut, my question is this: What services that YOU benefit from are you willing to forego? Roads, education, parks, and public safety, health care? These services benefit everyone in the state either directly or indirectly.

The so-called business leaders should know as well as anyone that we get what we pay for and we have to pay for what we get. For quite a few years now, we have been putting off paying, and now, when it is time to pony up and pay off our debts, everyone balks.

I would need my own blog and more time than I have to go point by point through the benefits we have been receiving, but I think most readers of the blog have a pretty good idea. What makes everyone think those benefits can be provided on the cheap?

All hell broke loose last Fall when Gov. B closed a few parks and historic sites, and earlier when he threatened to cut the U of I Ed Extension and when negotiations with state employees was on the rocks (and the list goes on). But while everyone jumps up and passes petitions and holds rallies when programs important to them are threatened or cut, they rarely, if ever, demand a tax increase.

Imagine a people rallying around an income tax increase holding demonstrations and circulating petitions. When we get to that point, I’ll have hope.

Comment by Pot calling kettle Wednesday, May 13, 09 @ 10:55 am
Reality Check. I agree with all you say, but then we run into the stone wall; budget facts.

We are spending more than we are taking in, and have for years. That simply can’t continue. Therefore, like you, I believe we need to raise revenues.

I believe there are two seminal questions that then have to be addressed. One, will the public tolerate taxes being raised without cuts being made. I think not. Two, will the GA be willing to raise taxes enough to solve the problem without cuts. I have my doubts.

The Gov’s introduced budget is an attempt to recognize those two issues. I don’t believe every dollar the State spends is sacrosanct. In fact, I know from first-hand experience that isn’t the case. There are many areas that could be cut, could have there growth rates tamped down, etc. Never enough to satisfy the “starve the beast” proponents, but still real cuts.

For example,I don’t want to “cut” health care for the needy, but I know we can’t maintain the current growth rate of Medicaid spending. Someone has to find some balance, and that is what the GA and Gov are working on. Civic Federation and others from both sides of the argument are simply trying to hold decision makers’ feet to the fire. Fair enough, I think.

Comment by steve schnorf Wednesday, May 13, 09 @ 11:00 am
I think “unserious” and “unhelpful” might be more accurate ways to describe the Civic Federation’s suggestions. “Irresponsible” and “fraud” are words far better suited for those who advocated for increasing the state’s financial obligations without securing a real revenue stream to support them.

Comment by grand old partisan Wednesday, May 13, 09 @ 11:09 am
GOP, point well made!

Comment by steve schnorf Wednesday, May 13, 09 @ 11:11 am
Steve, IMO, the best way to restrain Medicaid spending is national health care reform that brings down costs. Thanks to our former Springfield colleague, it appears increasingly likely we will pass a plan to achieve just that by the end of this year.

With respect to the political winds, I think Rich has made a pretty good case here that people are going to complain about taxes whether you raise them or not. (Or more to the point of the current debate, whether you raise them ENOUGH or not.)

The way to counter that is always going to be showing people the investments you’re able to make with that money: Schools. Public services. Transit, roads and bridges. Paying the state’s bills.

Comment by Reality Check Wednesday, May 13, 09 @ 11:22 am
Of course there are places to cut.

Let’s start with buildings. When Jess McDonald was DCFS director under Edgar/Ryan he build new offices all over Cook County, including palatial ones in Skokie and Harvey and in Englewood and the North Side. They are still there. They don’t house children. They house bureaucrats. Most child welfare work is and should be done in the home where the kid is, not in offices. And most caseworkers spend the bulk of their time in the field. Someone–landlord or construction firm…benefited greatly from McDonald’s lavish remodeling projects. In Cook County alone DCFS maintains 8-10 separate office, to house a huge contingent of middle level bureaucrats. As in so many agencies, the tail is wagging the dog–many unnecessary and overpaid managers and administrators are being kept on to justify continued payments to politically connected landlords and contractors.

Of course, we have to pay for child welfare services. Glad to do it. But do we have to pay for palatial offices, over the top salaries to an unnecessarily large middle manager corps filled with highly paid patronage hacks, and a multitude of contracts, many no-bid, of questionable benefit to children.

I guess according to Quinn we do.

Comment by Anonymous Wednesday, May 13, 09 @ 11:31 am
===But while everyone jumps up and passes petitions and holds rallies when programs important to them are threatened or cut, they rarely, if ever, demand a tax increase.===

Actually, the teachers unions, state employee unions, social service agencies, retiree organizations, Boards of Education,University presidents and Boards, and pretty much everyone who provides or receives state services have been lobbying for enhanced revenues to solve the state’s structural deficit. In fact, recent polls indicate that over 60% of citizens support a tax increase if the money was used for education, health care, and property tax relief.
Unfortunately, it is goofballs like Msall and his know it all organization, which is supported by big business interests, that get all the ink. Even the Speaker’s doomsday budget with 25% cuts would not be balanced and Quinn’s proposed 1.5 point increase won’t balance it either unless he gives up the giveaway proposal for families with a lot of dependents.
It is time for the citizens to pay for the services that they demand and so desperately need. If they won’t or are not given the opportunity then I guess we will just become Mississippi.

Comment by Bill Wednesday, May 13, 09 @ 11:40 am
Did anyone ever try their hand at cutting the budget? A couple weeks ago Rich posted a link at Wonkish that has a web ap for this very matter. Anyway, I did it just to see if it could be done and it quickly becomes apparent that you CANNOT “further cut the budget without decimating services.” Here’s my budget, which cut into half the deficit:

http://www.wonkish.com/budget/share.php?ID=1237

I would never ever propose that budget in real life. However, people who are saying cut this and cut that should do this exercise and report back.

Comment by Cheswick Wednesday, May 13, 09 @ 11:53 am
Wow, Cheswick, you cut services for the developmentally disabled by 80% ($800 million).

And pretty much eliminated Illinois Student Assistance Commission.

Cut state funding of universities in half.

Closed half the prisons.

And cut DCFS in half.

Comment by George Wednesday, May 13, 09 @ 12:23 pm
If they won’t or are not given the opportunity then I guess we will just become Mississippi.

Not a bad place to be, by some measures.

Return on Federal Tax Dollar, 2005
Illinois 0.78
Mississippi 2.02

http://www.nemw.org/taxburd.htm

IL’s not that far ahead in this one, surprisingly.

Smartest States
IL #35
MS #48

http://www.infoplease.com/ipa/A0931043.html

Comment by Six Degrees of Separation Wednesday, May 13, 09 @ 12:23 pm
Plus lots lots more.

Comment by George Wednesday, May 13, 09 @ 12:23 pm
Um, Six, have you ever been to Mississippi? Yeesh.

Comment by Rich Miller Wednesday, May 13, 09 @ 12:25 pm
George, Don’t hate me, but thanks for noticing. Like I said, it was just an exercise in trying to come up with some numbers, and I would never do that in real life (as if I could).

Comment by Cheswick Wednesday, May 13, 09 @ 12:43 pm
“A Hurtful Fraud”

Best and most concise description of Larry Msall AA has heard in years.

Comment by Arthur Andersen Wednesday, May 13, 09 @ 12:50 pm
Typical Knox College graduate. LOL

Comment by Bill Wednesday, May 13, 09 @ 12:54 pm
=== As in so many agencies, the tail is wagging the dog–many unnecessary and overpaid managers and administrators are being kept on to justify continued payments to politically connected landlords and contractors. ====

This is my favorite government myth. The leagions of unecessary managers. name for me 100 middle managers at DCFS that we can remove with no impact? Blago had been balancing the budget for years by cutting positions and jobs. Many locations are understaffed.

Comment by Ghost Wednesday, May 13, 09 @ 12:57 pm
I am shocked to find that DCFS has multiple offices in Cook County. Next thing you know, the county will try to have multiple health clinics. Doesn’t anyone understand how simple and cheap it would be to simply have all the people needing state services to come to the same central location? Dwight, maybe, or Pontiac?

Comment by steve schnorf Wednesday, May 13, 09 @ 1:03 pm
It is unfortunate that Walker has been sick, but he has been terrible, non-responsive and absent, which is not a good combination. It is interesting that Tamms has been identified as a top issue because Walker specifically refused to budge on that. I wonder if Quinn is trying to hand that liability over to someone else, or if he is actually giving marching orders to reform the place. Most of us know who the new director is by now. If it had been one of the IDOC candidates, it would have made reform trickier, as it would be hard for them to reform a place that they have been defending. Anyway, I’m curious how this will play out.

Comment by interesting Wednesday, May 13, 09 @ 1:34 pm
My understanding is that the IDOC director has stymied innovation and programming. A new broom is definitely needed there. And something has to be done about Tamms. No reputable DOC needs to keep a man in isolation for a decade. Any contacts they may have on the outside are gone after just a year or two, and anyway, their mail and conversations can be closely monitored.

Comment by moby Wednesday, May 13, 09 @ 1:52 pm
It’s good that Gov. Quinn has expressed a serious interest in the troubling practices of the Dept. of Corrections in running Illinois’ supermax, Tamms CC. But let’s not let his desire to “review” the problem interfere with serious reform. Rep. Julie Hamos and others have introduced a bill that will provide clear in-and-out rules for Tamms and will prevent the seriously mentally ill from being housed there. Let’s get the bill passed! Then the new Corrections director can review all he wants.

Comment by Goldie in Chicago Wednesday, May 13, 09 @ 2:08 pm
Our Escalade Government

Illinois has a Cadillac Escalade government, in a Kia Rio world. Those steering the big SUV tell those who are paying for the $81,500 truck and filling its monstrous gas tank that there is absolutely no way to cut back on the costs. You see, they expect a good government to provide everything that some of its citizens claim they cannot do themselves, so any proposals to change the government, are met with a withering cry from those who expect a Cadillac Escalade government.

Those who are enjoying the driving experience the huge beast offers, claim that they must have each and every option found on the big rig. They justify the power assist steps that slide into place and retract after use. “How will our older helpless folks get in without this vital option? It isn’t luxury, it is a necessity for some”, they whine. Upon hearing that some are questioning the power assist steps on the Caddie, various groups representing those who absolutely must have this option rally before the Escalade’s chrome grille and threaten any opposition.

“Well then, how about eliminating the Entertainment system?” suggests critics. The Entertainment system has in-dash DVD with two roof-mounted flip-down eight inch diagonal screens, two channel wireless headphones, and auxiliary video jacks with remote game plug-ins. It is I-Pod and I-Phone compatible. “Are you crazy?” shout the drivers, “how can you expect us to not have these vital safety features?”

“Can we not have the IntelliBeam headlamps?” queries the overtaxed citizenry. “We can have regular headlights, like the kind we use.” “Absolutely not!” the party in power screams, “Without this vital safety feature, we can all crash. Are you willing to risk the death of us all?”

With each proposal, came a muffled cry of shock from the drivers. How could they live without the SUV’s overhead console, with reading lights, universal home garage remote, dual sunroofs, heated and cooled cup holders, headrest speakers for the DVD system, heated and cooled leather seats, cushions, heated steering wheel, sunshades, blind alert systems, 22 inch chrome wheels, six speed automatic transmission, massive engine, 4 way power lumbar support, 14 way power seats, memory settings, in-dash navigation systems, On-Star connectivity, satellite radio, metallic paint, and every known option available. With each proposal of doing away with each option, one of the drivers would clutch their chest and then explain the absolute importance of each and every item within the 5000 pound SUV.

“OK, perhaps if there wasn’t a million people inside the Cadillac,” a critic offers, “then we would get better gas mileage, and it we wouldn’t spend so much tax money.” Another critic asks the drivers, “what if you were not pulling a 60 foot long Airstream trailer…perhaps the Escalade would move instead of breaking down every mile?”

“At times like these, we are going to decide who can ride free?” sniffs the drivers.

“What if we didn’t drive so much, then we would spend less!” up pops a suggestion.

“There is simply no way we can ever do that!” the party in power snarls.

The luxuriated ones claim there is absolutely no waste to cut. There is absolutely no way to decide who of the million riders can get where they need to go without the big Cadillac with the vast Airstream towed behind it, according to the party in power. There was no way to expect to get more miles from each dollar spent since they saw no way to reduce the weight of the vehicle, or the towed trailer. “We are being as efficient as possible!”

“Other states don’t make their citizens pay for a Cadillac government and businesses and dollars are flowing to those states from this one in order to save costs”, a bearded business professor testified. The party in power snickered, “where? Mississippi?” Those heartless conservatives are primitives and they couldn’t afford the chrome hood ornamentation on our ride! Besides they are too cheap for their own good.”

As more and more crowds decide to leave the state with the Cadillac Escalade government, the million riders sitting within it start to feel squeezed as thousands more decide to move in with them. The banks holding the big rig’s loans are demanding payment. The costs of keeping the SUV beast moving continues to rocket into the stratospheric limits. But those driving and choosing which direction the Escalade oozes into, are blinded by the bling they claim they must have.

“We have no waste to cut!”, they claim. “None! This is the only way to govern - BIG!”

“Nothing else will do for us, you know.”

Comment by VanillaMan Wednesday, May 13, 09 @ 2:28 pm
VM, a nice little analogy. The problem is, every one of those little accessories is important to someone, and that someone frequently isn’t the driver. New programs, expanded eligibilities, new mandates, etc don’t just magically appear in the state budget. There was a constituency, and that constituency found an advocate(s). Somewhere there is someone lurking in the weeds just waiting for you to try to eliminate their little piece of the budget.

Comment by steve schnorf Wednesday, May 13, 09 @ 3:40 pm
Vanilla: right now I have you labeled as a irresponsible, hurtful fraud since you didn’t enumerate specifically what Illinois should cut.

But fear not! You can redeem yourself. Instead of being an irresponsible, hurtful fraud, you can be merely assaulted by a chorus of boos instead. Now what specifically, pray tell, do you propose Illinois should cut?

Comment by Petey Wednesday, May 13, 09 @ 3:41 pm
Um, Six, have you ever been to Mississippi? Yeesh.

Well, Biloxi is nice, when they’re not having a hurricane.

Comment by Six Degrees of Separation Wednesday, May 13, 09 @ 3:51 pm
@Reality Check 10:45am

I should have cought this earlier. EPA gets NO GRF, so it wouldn’t be targeted for ANY cuts. It is self sufficient, and gets federal $$ for many of its OSF expenditures.

Otherwise, good post.

Comment by How Ironic Wednesday, May 13, 09 @ 4:10 pm
Ghost,

Actually, I could name names at DCFS. And I’m not suggesting that 100 of them be dropped. How about
10 or 20. Believe me, nobody would ever notice they were gone. And speeding them on to retirement, for which many are already well past eligible under the infamous Rule of 85, would save a couple of million a year, thereby giving taxpayers the impression that somebody is trying to cut something.

Comment by Anonymous Wednesday, May 13, 09 @ 9:05 pm
You can’t just look at “millions” for the cuts, your really have revise the structure to end what Martire claims is a “structural deficit”.

This is how you renovate the “structure”:

1) Roll back Medicaid eligibility to the “Pre-Blago” days! Currently the Medicaid threshhold is about 400% of the poverty level, up from about 185% pre-Blago. This added approximately 1,000,000 new recipients to the rolls, at a state cost of about $2,600 per recipient that is matched by Fed funds.

The situation is so ridiculous that people are turning down their company plans to be on State subsidized Medicaid!

Savings from the “right sizing” to pre-Blago Medicaid rolls-$2.5 billion +\-

2) We can no longer afford to maintain a “fee for service” Medicaid program. We need to go to a managed care program to ensure preventive as well as catastrophic care. I have a top-of-the-line HMO which costs me and my small group employer about $2,800 per year per person, including a 2% adminstrative fee and copays.If the state had a similar plan for Medicaid recipients, it could save at least $2,000 per Medicaid recipient, allowing about $400 each for state waste, inefficiency and corruption.

This, or a similar taxpayer subsidized plan, should also be required as a group for state and municipal employees, but I won’t calculate that here.

Savings for current Medicaid population to convert to managed care-$5.2 Billion per year.

Savings for pre-Blago population to managed care, assuming the extra 1,000,000 are removed- $3.4 billion.

3) One of the costliest rip offs of children and taxpayers in Illinois is the “Prevailing Wage Act” for non-Federally funded capital projects.
This requires all contractors to be paid far above market labor rates on public works construction, which Blago expanded to repair work as well in Executive order 13, for all state, school county, township, State University and municipal governments.

When I was managing school capital projects, I was disgusted by the fact that we often had to ignore the childrens’ needs because we were bloating the salaries of workers and contractors far above market rates for no reason other than to pander to the unions and contractors.

Often, we had the ridiculous situation where workers would get 50% raises ONLY WHEN THEY WERE WORKING ON SCHOOL PROJECTS. The cost was that much lower for the same work when performed for commercial or private school work.

Heartland has estimated that this increase costs between 25 and 50% depending on how labor intensive the project is.

Eighteen other states less interested than Illinois in scamming the public for campaign contributions from contractors and unions have already ended this unfair practice and competitively bid at market rates for capital work.

Savings from elimination of “Prevailing wage” on non-Fed jobs, including less need for state funds from local governments- $1.5-$2 billion.

The next item is to slow the rate of growth in K-12 education spending. The only way this can be done is to end new “unfunded mandates” from Springfield and cap contractual increases in contributions to salaries and benefits in schools to about 70% of new, unrestricted revenues.

Perhaps the major reason that schools are perpetually in “financial crisis” despite the state, local and Federal revenues increasing at a rate of about double CPI per student over the last 15 years is that school boards agree to contracts they cannot fund, generally for far higher increases than the rates of revenue increase. This law would take away the ability of school boards to irresponsibly agree to raises greater 70% of increases in state, property and fed revenues. Working cash bond sales would be excluded from the “new revenue” calculation. The board would need to pass a refendum to exceed this cap, and property taxes would be increased to pay for such raises if approved.

Note that this would slow the foundation level growth to about that of inflation.

This alone would save about $0.5 to $1 billion per year, depending on CPI.

Rounding down for conservatism (is that a prohibited word on this blog?), the following could be saved:

Medicaid reduction of eligibility to pre-Blago levels and instituting managed care- $5.2 to $5.9 billion

Requiring non-federal capital work be bid at market rather than “Prevailing” wage rates-$1.5-$2 billion

Capping increases in school wages and benefits to 70% of new revenues-$0.5-$1 billion

Total “structural” savings- $7.2-$8.9 billion

Please note that these structural changes wouldn’t cut a single benefit to anyone with income less than 185% of the poverty level, not require closure of badly needed care facilities, would ensure teachers get at least cost of living increases in wages and benefits, and would increase employment on public works projects by paying fair, market rates on labor for the work.

Now tell me why increasing taxes by 50% and adding sales taxes to services, which would drive most engineering and high tech out of the state, killing hundreds of thousands of jobs and decreasing the productive population by many more is a better, fairer, idea for Illinoisans.

Please note that I haven’t even gotten into cutting the $4.9 billion in “discretionary spending” (eminently cuttable) and abolishing early retirement and “end of career” pension sweeteners that add 16 to 20% to our unfunded pension obligations.

Comment by PalosParkBob Wednesday, May 13, 09 @ 10:06 pm
One clarification. While over $5.2 billion should be able to be saved on both Fed and state Medicaid from managed care, “only” about $3.8 billion would be saved by the state. Sorry. It’s been a long day.

Comment by PalosParkBob Wednesday, May 13, 09 @ 10:27 pm
Msall is actually a good guy, and intelligent. He does his job.

Comment by steve schnorf Wednesday, May 13, 09 @ 10:35 pm
===“only” about $3.8 billion would be saved by the state===

Yeah, if we give up the assessment programs and the state assumes all liability should Medicaid costs increase or enrollment increases. That’s not a savings.

Comment by Rich Miller Thursday, May 14, 09 @ 12:18 am
Rich:
Of course this doesn’t “guarantee” costs won’t go up in the future. This just is an estimate of how much less expenditures would be with a fair cutoff for eligibility (185% of poverty).

If you don’t like the term “savings”, how does “reduced expenditures” sound?

I may have missed it, but it seems that the “structural renovation” of Medicaid to right size enrollment and add managed care and ending the unaffordable and valueless Prevailing Wage Act should be at the center of reasoned debate before tax increases. I can understand why the cowardly sell-outs in the GA would avoud this debate, but why is it that your bloggers have never explored it? Also, why is there such a dearth of authoritative data from the Springfield on Prevailing Wage and the stated Medicaid reforms?

Perhaps more importantly, why is the “unbiased” press not bringing this issue to the table?

Comment by PalosParkBob Friday, May 15, 09 @ 7:34 pm