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* Hey, governor. The next time a powerful Washingtonian asks you what the feds can do for Illinois, suggest they send more money…
“I asked (Quinn) if there was anything more I could do here in Washington, and the governor couldn’t think of anything at this point,” Durbin said.
Sheesh. Say it with me, governor: “More money, please.”
* My weekly syndicated newspaper column takes a look at the Taxpayer Action Board recommendations and gives a hint at what’s to come (note the 25 percent budget reserves section)…
Almost every reporter who covered the unveiling of new budget-cutting recommendations by the governor’s Taxpayer Action Board last week claimed the “TAB” had found a half billion dollars in reductions for the coming fiscal year. It was reported that way because that’s what the board’s chairman, Illinois Taxpayers Federation President Tom Johnson, said.
Johnson’s comment demonstrates how amorphous, politically difficult and fiscally suspect many of these proposals really are. If you do the math, the board’s report actually claims budgetary savings this coming year could be as high as $1 billion if all its recommendations are implemented.
There was, apparently, a major internal push-back from some of the more experienced budget experts on the citizens board. Former George Ryan budget director Steve Schnorf - who also served under Jim Edgar and is one of the smartest budget gurus I’ve ever met - and the very highly regarded former Democratic state Rep. Woods Bowman were two of four signatories to a harshly critical “Minority Report” letter drafted by Schnorf.
“You can, and I believe you will, get some savings from the suggestions in this report,” Schnorf wrote to Gov. Pat Quinn in his dissent. “It probably won’t equal billions and it certainly won’t all happen over 12-18 months. Good luck.”
Indeed. Look closer and you’ll see that half of the touted billion dollar savings in next fiscal year comes from two items which are already being done, and then some. The board suggested a 2-3 percent across the board cut of almost all state spending. But the governor ordered agencies last week to begin preparations for a whopping 25 percent across the board cut. The board’s proposal looks tiny and almost harmless in comparison.
The board also wants a freeze in the state’s operating budget. But the General Assembly approved a budget last month which funds state programs at an average of 50 percent of the current fiscal year’s appropriations. That’s much more than a freeze.
The rest of the savings come from things like Medicaid managed care, which supposedly would save $95 million in the first year - a far cry from the $3 billion in savings that the Senate Republicans have been claiming and the Chicago Tribune has been touting.
Other savings, like reducing the prison population by freeing inmates charged with nonviolent drug and property crimes ($30-65 million) carry huge political risk for the governor.
“My best personal estimate is that you will be able to save very little, if any, money [next fiscal year],” Schnorf wrote, claiming he’d be “thrilled” to find $200 million in “actual, achievable” savings in the coming fiscal year, which begins July 1st. Other than across the board cuts and freezes, he’s likely correct.
However, this report is a good thing in that it shows without doubt that there is just no way for Illinois to fully cut itself out of this awful budget mess.
After the federal stimulus cash is factored in, Illinois still faces a $7 billion budget hole in the coming fiscal year. Yet after two months of work and a horde of consultants, the governor’s commission only came up with $1 billion in “cuts.”
The obvious problem is that if all the board’s recommendations were followed and they all worked as advertised, the state would still be left with a massive $6 billion hole to fill.
And then there’s the very real problem of what happens after the billions in federal stimulus dollars are spent. The state put that cash right into its spending base. When the stimulus money is gone, the state will have yet another horrific hole to fill.
And what about the out years? The report’s claimed savings in future years rely heavily on reopening the state’s collective bargaining agreement with AFSCME and other unions. However, the four-year union contract is just a year old.
“Based on my personal experiences,” Schnorf wrote, “your largest union will not agree” to reopen negotiations on that contract.”
He ought to know.
“Take everything we say to you with some grain of salt,” Schnorf wrote, adding. “Our suggestions aren’t the ordained word, handed down from on high.” Let’s hope everyone keeps that sound advice in mind as the process moves forward. There are more cuts to be made that the board missed, but even those won’t completely solve the problem.
* Related…
* Mike Lawrence: So much promise, so little achieved: During the 1960s and early ’70s, W. Russell Arrington was the Mike Madigan of his era in influencing legislative outcomes. When a young aide tried to console the Senate Republican leader by suggesting the legislature’s failure to resolve a major issue might advantage him politically, he replied, “That’s not the point, Jim. We’re here to solve problems, and we didn’t solve the problem.”
* Abused fight back against budget cuts: Thirty-four percent of the shelter’s funding comes from the state, but in the partial budget passed by the state legislature those dollars are cut in half. Executive Director Linda Healy has told the seven women and 20 children staying at the house right now that they will have to move out by June 30. She is not accepting new residents unless they can promise to be out by July 1.
* Illinois Budget Negotiations Trudge On, No Deal In Sight: PHELON: We’re not as optimistic that we’re going to come out of Tuesday’s meeting with a solution that means we’ll have it in place before July 1.
* Social service advocates predict disaster if budget cut
* Local fallout from state funding mess soon to hit
* Illinois can’t have everything: Illinois income tax bills will have to go up. We’re with Quinn on this one. Lock that treasure chest up tight. Don’t open it until the legislature makes the painful decisions necessary to put the state on a sustainable path.
* Some suburban schools’ funding could lose political protection
* PJStar: Illinois’ lawmakers have let us down again
* Quinn brings budget battle to church
* Quinn Takes Budget Plan To The Pulpit
* Quinn visits Chicago church, talks tax increase
* Quinn says Illinoisans must ’sacrifice’
* Budget stalled, bills flow freely
* Inside the Illinois treasure chest: Q-C projects in the capital bills
* State’s public works bill includes lawmakers’ pet projects
* Capital plan includes community priorities, lawmakers say
* Local projects funded with video poker, alcohol taxes, vehicle fees
* Southland mayors, trustees, voters: Ban video poker
* IL Senator Pushes for Online Lottery Tickets
* Parking-meter mess might pit City Council vs. Daley
* 20 cents short on parking fine, he gets the boot
posted by Rich Miller
Monday, Jun 8, 09 @ 11:04 am
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–And then there’s the very real problem of what happens after the billions in federal stimulus dollars are spent. The state put that cash right into its spending base. When the stimulus money is gone, the state will have yet another horrific hole to fill.–
That’s the 800 pound gorilla, and no one’s even talking about it. Kudos for doing so. I suspect that’s why Quinn didn’t want to deal on a temporary tax at first.
Quinn really couldn’t think of anything he wanted from Washington? Yikes. Durbin’s relating the story strikes me as a back of the hand from him to Quinn.
Comment by wordslinger Monday, Jun 8, 09 @ 11:17 am
“More money, please.”
Isn’t that understood? Does it need to even be said?
The joys of living in a handout state…
Comment by Leroy Monday, Jun 8, 09 @ 11:17 am
The Gov is a true Democrat you get money from taxing the people not from Washington.
Comment by Mike an Ike Monday, Jun 8, 09 @ 11:25 am
Perhaps the Gov might head out DuPage or Boxed Tom ‘hood to put a slightly different face on the issue.
Comment by Boxing Cross Monday, Jun 8, 09 @ 11:25 am
People want this and they want that. “We need these services!” they scream. But when the bill comes due, they cry, “We don’t want to pay the taxes!”
At some point, the twain must meet.
Comment by Fan of the Game Monday, Jun 8, 09 @ 11:39 am
When Quinn talks about sacrifice, he is not talking about the poor, who already get pretty much everything free–medical care, food stamps, housing vouchers, rent support, utility assistance and so on. He’s not talking about the upper middle class and the rich either ( a group which includes most state of Illinois sitting pols and an awful lot of high level Illinois state bureaucrats). Plus, the pols can always vote to raise their salaries again if things get tough. Quinn wants the middle- and lower-middle class to bear the freight of his tax increase, which has become even more regressive since he first proposed it. Hence his remark to Senator Durbin which translates to :”We’ll let our middle class Ilinoisians take care of it. They won’t mind.”
Meanwhile, any budget savings from reducing the prison populaiton, moving Medicaid to managed care, and getting the union to reopen contracts
definitely have a fantasy quality. Whoever negotiated those union contracts on behalf of CMS should be given the boot yesterday. They have cost taxpayers huge sums over the life of the contract. But it’s too late now.
On the other hand, there are some bright spots, the federal universal healthcare efforts being primary among them. Obama wants a bill by the end of the year. Something is likely to pass, and Illinois, with its generous eligibility rules for Medicaid access, is likely to benefit with more federal dollars. And let’s not forget, recessions end. State coffers will be swelling again in a year or two. Hopefully they won’t be swelling with permanent tax increase dollars for our Dem legislators to play with.
Most annoying however, is Quinn’s failure to push the idea of a federal bailout of states like Illinois. California is the canary here…their budget crunch seems to be closer as their fy started in Feb..and if they get a bailout, so will other states no doubt. A long shot, but not impossible.
I wouldn’t be averse to a small temporary increase. But I hate the idea of giving our Dem pols billions of future dollars to misspend. And misspend they will.
Comment by Anonymous Monday, Jun 8, 09 @ 11:39 am
Anon 11:39, the state’s have already been bailed out with the stimulus cash. The big worry now is inflation. The printing press is going to be shut down, for the states, at least.
Comment by wordslinger Monday, Jun 8, 09 @ 11:41 am
Quinn and the GA wont even attempt to cut from the budget what his own Board reccomends just like they didnt follow the recommendations of the ethics panel. To give them more money when they refuse to cut or reform is stupid.
Comment by fed up Monday, Jun 8, 09 @ 11:48 am
fed up, Quinn proposed more cuts than the TAB. Half the TAB’s proposed cuts are being dwarfed by the current budget situation. The other half are likely illusory, as Schnorf points out.
Take a breath.
Comment by Rich Miller Monday, Jun 8, 09 @ 11:51 am
=== When Quinn talks about sacrifice, he is not talking about the poor, who already get pretty much everything free–medical care, food stamps, housing vouchers, rent support, utility assistance and so on. ====
Sicne the State is cutting the money used to help support foster kids, reducing benefits, eliminating treatment programs for addicts, shelters for the battered and homless etc I would say the poor are very much being asked to sacrifice. Also, ever try and “use” that “free” medical care? No docotrs will take it, reciept of services if your lucky enough to get coverage takes months longer and so forth. The poor are already sacrificing, try living the “free” lifestyle and then come back and talk about sacrifice.
Comment by Ghost Monday, Jun 8, 09 @ 11:54 am
Wordslinger–
How sure are you of that? I think it’s equally possible that we are still in the big spending phase–contingent on the speed of the recovery of course. And California really can credibly say it is too big to fail.Not to say inflation isn’t a huge concern.
(I’m anon 11:39. For some reason, my computer has stopped carrying over my name so I have to remember to re-enter it each time).
Comment by Cassandra Monday, Jun 8, 09 @ 11:58 am
anonymous” Whoever negotiated those union contracts on behalf of CMS should be given the boot yesterday. They have cost taxpayers huge sums over the life of the contract. But it’s too late now.”
One is only 9 months old and was signed after having an intervention with mediation to get ‘er done. One might wonder if your ‘anger’ is more towards the fact we have labor contracts than with the contract itself?
Comment by Princess Monday, Jun 8, 09 @ 12:02 pm
Rich yes the deficit is dwarfing the proposed cuts by the TAB and if Quinn is proposing even more cuts good(though I will believe it when it happens) Just because these cuts dont completly solve the problem doesnt mean they should not be made.
Comment by fed up Monday, Jun 8, 09 @ 12:05 pm
Mike Lawrence pretty much hit the nail on the head by comparing Senator Addington’s leadership to Speaker Madigan’s complete failure to address effectively the fiscal problems of the state. The sky really is falling if the contemplated cuts is state funding for human services are implemented.
Speaker Madigan is on the a road to perdition and I can’t even conclude that his road to “heck” is paved with any semblance of good intentions.
Let’s make Schnorf the budget czar and blame him for the hard fiscal decisiosn that need to be made since no one else at the table seems to have any the political backbone to do the things that really should be done to right our ship of state.
Comment by Captain America Monday, Jun 8, 09 @ 12:08 pm
1 in six kids in Illinois is at risk for abuse and neglect.
300,000 women are battered every year and 20,000 plus raped.
The state’s home care program serves more than 50,000 seniors each year.
Anyone who thinks that only “low-income” people benefit from state programs is deluded.
Anyone who thinks that none of the folks the state is about to slam the door on are Republicans is EQUALLY deluded.
Perhaps we SHOULD have a full debate about whether helping even middle-income seniors remain independent and in their homes is a good idea.
I, for one, would welcome that debate.
Perhaps Tom Cross and the Republicans are right, and we have 50,000 unused nursing home beds just laying around waiting to be used.
Or, perhaps they want to force 50,000 Illinoisans to quit their jobs so they can help care for their aging parents.
Or maybe Tom Cross doesn’t think spending $7,500 a year per senior to provide home care is a good investment, but spending $75,000 a year to provide nursing home care is smart use of our state’s limited resources.
I’m ready for that debate with Leader Cross, the Chicago Tribune editorial board, the Illinois Policy Institute, or anyone else who wants to have it.
Just name the time and place.
Comment by Yellow Dog Democrat Monday, Jun 8, 09 @ 12:23 pm
Ditto on what Yellow Dog says. It’s much less expensive to support seniors, the disabled,the mentally ill, and others in the community than to institutionalize people/put them in empty nursing home beds.
Shame on Tom Cross for suggesting that 50,000 empty nursing home beds would somehow solve our health/human service funding problems.
The exact opposite is true, and the quality of life of unnecessarily institutionalized individuals would be much lower in warehousees for the elderly/disabled/mentally ill/etc…
Comment by Captain America Monday, Jun 8, 09 @ 12:37 pm
There are around 4,000 rapes a year in Ill. And a total of Aprox 68,000 violent crimes a year in Ill so YDD you are making up BS stats. 1 in 6 kids in Ill is at risk of abuse or neglect where did you get that
Comment by fed up Monday, Jun 8, 09 @ 12:37 pm
I do agree with keeping seniors independent though it is cheaper and better for them.
Comment by fed up Monday, Jun 8, 09 @ 12:38 pm
=== Mike Lawrence pretty much hit the nail on the head by comparing Senator Addington’s leadership to Speaker Madigan’s complete failure to address effectively the fiscal problems of the state. The sky really is falling if the contemplated cuts is state funding for human services are implemented.
Speaker Madigan is on the a road to perdition and I can’t even conclude that his road to “heck” is paved with any semblance of good intentions. ===
Captain America -
I challenge you to find a tax increase under a Republican Governor where Democratic lawmakers didn’t provide atleast SOME of the votes.
Good luck.
The state’s fiscal problems don’t just impact Democrats, and Democrats aren’t the only ones with a responsibility to fix them.
But when have you heard Tom Cross acknowledge that even if we cut every ounce of waste we could out of state government — a level of Godly perfection no private sector enterprise has ever achieved — we will STILL need to raise taxes?
Democrats hold just under 2/3 of the seats in the Illinois House. Yet THEY were ready, by all accounts, to provide as much as 90 percent of the votes needed to fully fund state government.
But Tom Cross and the Republicans weren’t willing to do just 10% of the lift.
Instead, what do we get from Tom Cross?
- Demands to force medicaid patients into HMOs, an option most House Repubicans haven’t exercised for their own families, even though there would be little cost savings for the state. Insurance companies, on the other hand, would profit handsomely.
- Demands for privatizing retirements, even though Cross admits that its lawmakers, not state employees, who are to blame for the retirement deficit, and even though privatizing the system does NOTHING to help balance the budget.
- Holding the budget process hostage while trying to gain an advantage in future elections through so-called campaign “reform.”
Now, I’ll be the first to say that I think Tom Cross is a good guy. I like him, and most of the time I respect him.
But he knows as well as I do that a tax increase is needed. He knows that balancing the budget through cuts alone is not only fiscally irresponsible, but places the lives of tens of thousands of people in risk. But he’s putting politics, not people, first.
If Madigan and the Democrats reward that kind of behavior by caving in to Cross, they’re only encouraging it.
Comment by Yellow Dog Democrat Monday, Jun 8, 09 @ 12:39 pm
–Or maybe Tom Cross doesn’t think spending $7,500 a year per senior to provide home care is a good investment, but spending $75,000 a year to provide nursing home care is smart use of our state’s limited resources.–
Home care is civilized, compassionate and relatively speaking, a bargain. It’s, dare I say it, a very conservative solution.
By the way, $75,000 a bed for a nursing home is at the low end. It can and does go much higher.
Comment by wordslinger Monday, Jun 8, 09 @ 12:42 pm
“However, this report is a good thing in that it shows without doubt that there is just no way for Illinois to fully cut itself out of this awful budget mess.”
A more accurate statement is that there is no painless way to cut ourselves out of this mess. We could balance the budget by severely cutting education, social services, and medical coverage. I don’t think that is a good idea, but it is an option that needs to receive serious discussion. Quinn needs to specifically (and honestly) address which programs and agencies will be cut. He then needs to offer a plan that reduces those cuts through tax increases or other increases in revenue. Let the people, through their legislators, decide what they think is worth saving. This idea that all spending by the state is beyond cutting doesn’t go over too well with your average taxpayer. They want to see real cuts first, and yes, that includes cuts to good but non-essential programs. I don’t see much support for a tax increase until that happens.
Comment by Pelon Monday, Jun 8, 09 @ 12:44 pm
===We could balance the budget by severely cutting education… and medical coverage. I don’t think that is a good idea, but it is an option that needs to receive serious discussion.===
Only if we first give back the stimulus money.
Comment by Rich Miller Monday, Jun 8, 09 @ 12:52 pm
YDD we have had one party control in ths state for 4 years. How many years have we had overtime to get a budget, why hasnt the exploding structural deficit been delt with, who keeps passing more unfunded programs, the gop is not even worth mentioning in Ill. the Dems run the show and have run the state finances into the ground but you still cling to the GOP as the boogie man, The DEMS can pass anything the want but didnt look at Madigan, cullerton, E. jones, Quinn, Blago when you look to blame for this mess.
Comment by fed up Monday, Jun 8, 09 @ 12:53 pm
Cassandra, here’s an excerpt from Obama’s Memorial Day Weekend, “We’re Out of Money,” interview with C-Span’s Steve Scully:
–SCULLY: States like California in desperate financial situation, will you be forced to bail out the states?
OBAMA: No. I think that what you’re seeing in states is that anytime you got a severe recession like this, as I said before, their demands on services are higher. So, they are sending more money out. At the same time, they’re bringing less tax revenue in. And that’s a painful adjustment, what we’re going end up seeing is lot of states making very difficult choices there… –
The stimulus has been sent and the feds have enough on their plate.
Comment by wordslinger Monday, Jun 8, 09 @ 12:53 pm
fed-up:
You’re right, my math was a little off.
According to the Illinois State Police,, there were 5,596 reported rapes in 2007.
I think you’d have to go back to the early 80’s to find a time when there were 4,000 or fewer reported rapes.
Emphasis on “reported”, because, as we know, most rapes don’t get reported to law enforcement.
In fact, according to a 2005 Report from the U.S. Dept. of Justice (2005 National Crime Victimization Study) only 4 in 10 sexual assaults are reported.
So, you’re right, my math was a little off. 14,000 rapes a year, not 20,000.
Comment by Yellow Dog Democrat Monday, Jun 8, 09 @ 1:07 pm
Yellow Dog
I agree completely that there is plenty of bipartisan blame to go around on the state’s problems. As far as I am concerned Republican legislative leaders have done little or nothing to constructively resolve the budget problems in the State the last several years.
Political expediency seems to trump principle and governmental substance in both parties to the detriment of all citizens.
I plan to continue voting Democratic forever, except that I will never vote to reelect Todd Stroger or elect Roland Burris United States Senator under any circumstances.
Unfortunately, in Ilinois the choices are between Tweedledum and Tweedledee all too often, especially in terms of poltical integrity and systemic governmental corruption.
Comment by Captain America Monday, Jun 8, 09 @ 1:14 pm
== YDD we have had one party control in ths state for 4 years. ==
Um, fed up, I believe that if you go back and look or Rich posts them, you’ll see that a substantial number of Republicans voted for those budgets each year.
If Schnorf were here, I’m sure he’d tell you that the structural budget deficit dates back at least to the George Ryan/Pate days, and probably earlier.
In fact, a partisan could argue that the increased spending by Democrats is DWARFED in comparison to the impact that George W. Bush had on our state’s economy, its tax coffers, and its budget.
But I’m not going to point that out, because I’m not really sure how digging through the ancient past is going to get us out of this mess.
Pat Quinn has offered a comprehensive plan for balancing the budget that includes cutting spending and raising revenue.
If you have a comprehensive plan that you’d like to share with the group, feel free.
Comment by Yellow Dog Democrat Monday, Jun 8, 09 @ 1:14 pm
The Governor’s Commission on the Status of Women in Illinois: 300,000 battered women each year.
Adult Victim Demographics (from the 10% served by the state):
- 49% white
- 42% married
- 53% employed
- 42% some college or college degree
Comment by Yellow Dog Democrat Monday, Jun 8, 09 @ 1:27 pm
YDD its a silly argument but the UCR report I found showed 4103 rapes in 2007 and never more than 5,000. But you want to count unreported rapes to get closer to your alleged 20,000 maybe we could count unreported income and close the budget deficit oh thats right its unreported so it doesnt count. What about your made up claims of 300,000 women battered. Thats more than every reported crime in Ill. not just batterys.
Yellow Dog Democrat - Monday, Jun 8, 09 @ 1:14 pm:
== YDD we have had one party control in ths state for 4 years. ==
Um, fed up, I believe that if you go back and look or Rich posts them, you’ll see that a substantial number of Republicans voted for those budgets each year. What I am saying is the GOP does not matter the Dems could have done anything they wanted to fix these problems the past few years but chose not to and you want to blame the GOP. The GOP does not matter in Ill. the dems are the goverment and they have refused to fix the problems.
Comment by fed up Monday, Jun 8, 09 @ 1:29 pm
Well, I suppose he’s not going to say come and get it.
I still say that we should watch and see what happens in California before we commit to giving our pols more billions to play with forever and ever. It’ll only be a few more weeks before their state treasurer says the crunch will come…maybe sooner.
YD: what are the details on those cuts? You’d think that Quinn would be listing them on the state website and talking about them daily. He says cuts, but not what they are. In fact, my understanding was that our Pat is proposing a substantive increase in the operational budget, well over inflation.
Comment by Cassandra Monday, Jun 8, 09 @ 1:33 pm
your link shows only approx 41,000 batterys and assaults total in Ill. thats along way from 300000 i see the Govs report They sure didnt use crime stats in coming up with that number. http://www.isp.state.il.us/docs/cii/cii07/cii07_Section_II_Pg27_to_200.pdf
Comment by fed up Monday, Jun 8, 09 @ 1:37 pm
Send more money? Do they have any money LEFT???
They’re closing in on a $2 Trillion budget deficit on top of the $11 Trillion national debt. They could print more money and devalue the dollar even further if that’s what you want…
Comment by Segatari Monday, Jun 8, 09 @ 1:48 pm
-fed up, geez, lets sit here and bicker numbers. Does it make a lot of difference if x or z is correct?
According to the Illinois Violence Prevention Authority which used a wide variety of sources for their report and showing mostly 2005 yr stats, there were 110,795 reports of child abuse and neglect. There were 115, 282 reports of domestic violence and 8,586 reports of elderly abuse.
Does not matter if the numbers shown were less than they are or more, the abuse/assult/neglect is out there and slashign funds to the agencies that combat and assist is not a reasonable solution to balance a state budget.
Another report I was just reading states close to 600,000 manhours spent combating, assisting, investigating. Who is going to fall if these funds and hours are crippled? Which one of our leaders wants to stand up and say ‘I’m sorry, funds are being slashed, we can no longer spare money on such items, we must cut spending and programs’?
Comment by Princess Monday, Jun 8, 09 @ 2:44 pm
So it doesnt matter if the facts are right? Did you used to work for George W.
Comment by fed up Monday, Jun 8, 09 @ 2:52 pm
How about we start by raiding/not funding the legislators’ pension funds and then use THAT money toward the deficit. Put them in the same retirement system that the state is in - with the same rules.
Then, let the constituents vote on whether or not they deserve a raise when the time comes. Also, cut ALL earmarks from the budget…let schools hold fundraisers if they want lights for the baseball fields.
WE pay their salaries; they’re supposed to listen to their constituents - doesn’t seem to be happening. AND, it’s NOT the Obama White House…it’s the PEOPLE’s White House!!
Comment by southpaw123 Monday, Jun 8, 09 @ 3:01 pm
No fed up, my point was it does not matter if the number is 30,000 or 300,000 to the people these things are happening. You can be a number cruncher all you please, I did not write any of the reports nor do I care which figure is correct. I can about the people, because fed up, these are not ‘numbers’ they are people. Real living breathing citizens of this state that need assistance. If a number cruncher would take his/her behind out from the walls of his/her office once in a while and see how this bickering affects real people of this state we might not have such stupid chest thumping.
Comment by Princess Monday, Jun 8, 09 @ 3:08 pm
I would agree that the current structural imbalnce has at least some of its roots in the last 18 months of George Ryan’s administration, when, through no fault of his, we misjudged the extent of revenue loss we were going to encounter in 2002, 2003, and 2004. Added to that has to be the change from a production to a services based economy over the past 25 or 30 years, rendering our sales tax more and more obsolete, and a subsequent very severe national recession, once again knocking income and sales tax receipts into the toilet.
However, it is important to remember that we did acknowledge that the budget was out of balance and revenues were falling (we misjudged by how much), and Governor Ryan cut the FY03 approp bills by more than 1 billion dollars in vetoed spending, taking the GRF budget back to below its FY01 level. No other Governor in the modern (post income tax) era has done that. Then, the new Governor needed to do what Governor Edgar did with the unbalanced budget he inherited; freeze spending for a couple of years-just say “No”.
With that action the damage could have been controlled. Look at a graph of GRF spending over the past 20 years and its plain to see. Several years of increased spending at maybe a 4 or 5% rate, followed by a tamping down in Edgar first 2 or 3 years, followed by a resuming growth, followed by an actual decrease (George Ryan’s last budget), followed by growth after growth. The only flattening or decreases you see are at the beginning of Edgar’s term, and at the end of Ryan’s.
No one else apparently noticed that you have to hold spending down or cut it, during bad economic times. Here we are.
Comment by steve schnorf Monday, Jun 8, 09 @ 3:20 pm
Those of you who keep saying I’m the right person to help balance the budget, I’ve done nothing to you to deserve that.
Seriously, the people working inside government state their positions and make their arguments internally, and then support the final policy decision that is made. I have none of those constraints, and in fairness to them, you should remember that.
Comment by steve schnorf Monday, Jun 8, 09 @ 3:36 pm
Actually i was pushing Schnorf for treasurer….
I suppose I need to go create a facebook page for you…..
Comment by Ghost Monday, Jun 8, 09 @ 3:56 pm
No princess the numbers do matter because there is a huge differance between 30,ooo and 300,000. The differance is the amount of money that needs to be used to treat the problem. I bet it would matter if your house payment was $10,000 amonth instead of $1000 a month. but Its not real money its just tax money so the figures dont matter we can always just raise taxs
Comment by fed up Monday, Jun 8, 09 @ 5:12 pm
southpaw123, thanks for the swell ideas. We’ll take them a bit farther for maximum savings effect.
1) Eliminate legislative pensions now and forever and turnover net assets of GARS for deficit reduction. FY10 savings: $ 59.9 million. ($51.3 mm assets plus Gov recommended contribution of $8.8 mm) Moving the GA members (only new ones) to an SERS-style pension would have zero impact on FY 10 approps unless a Filanomics (see also Enron) spend future savings today calculation was applied.
2) “let the constituents vote on on whether or not they deserve a raise when the time comes.”
I think there is a Constitutional problem with this, so I didn’t estimate savings. They would not be substantial in any case, e.g. less than $1 million.
3) “cut earmarks from the budget.” If you mean the 972-page list of member projects, the total is $500 million, iirc. We’ll do simple math and ignore funding sources, etc, and the FY 10 “savings” would equal $500 million.
As a budgeteer, you were 1 for 3, and the 1 you picked that really saves money will never hit the chopping block. Care to play again?
Comment by Arthur Andersen Monday, Jun 8, 09 @ 5:38 pm
Not sure those member initiatives are paygo. May be bonded, so fy10 savings would be about $50 million.
Comment by Rich Miller Monday, Jun 8, 09 @ 5:44 pm
fed up, you’re agruing with me over something that does not matter to me because you are not going to convince me that any of these do-good agencies are going to be able to perform what they are meant to perform with the budget funding being leveled their way–no matter what number you put in what line. You’re merely wanting to overblow your point on a numbers issue which exactly means little whether it is a few thousand either way.
Can you pull out a report that claims domestic violence is drastically down this year over last? Can you pull out another that shows children are much safer this year compared to the funds the agencies needed or used last year?
You know full well what I am saying, yet you continue to spin around what I have actually said–surely even you can acknowledge the fact that violence against elderly, women and elderly are not greatly down over last year or the year before when x or z amount of funding was needed.
Fine, slash the budget, don’t properly fund the social agencies, crunch the numbers to suit yourself and then when the citizens begin to really suffer you can be the one to inform the public that the funding were not justified by whatever number actually needed services according to some office report. Feel better?
Lets just agree and say all of these agencies can do without 50% of their funding over previous years because you like to crunch numbers and believe we’re wasting money on too much headcount. Or, maybe can can go visit and discuss programs and services with the different agencies and get a full review of how they spent/d their funds, number of citizens they served and manner inwhich they served them. Forget the reports, go on down and do some research for yourself.
Maybe after that you can come on back and give us some real figures on how social services waste money, fabricate headcount and deserve a 50% reduction in funding. You want to nitpik numbers, I’m concerned on the clients. You’ve shown me nothing to make me believe need in the social services is down compared to funding need over the last few years.
Comment by Princess Monday, Jun 8, 09 @ 5:58 pm
Rich, I read that 972-page thing once and about passed out. My SWAG on the cash savings is pretty close to yours- I should have been more specific in my post. Thx, AA.
Princess, don’t waste your time arguing with someone who apparently thinks a “baseline” level of rape, domestic violence, and elder abuse is acceptable.
I can tell you that anyone who pitched an argument like that in front of Jim Thompson would have received the butt-chewing of their career. Suspect Schnorf would confirm the same for Gov’s Ryan and Edgar.
Comment by Arthur Andersen Monday, Jun 8, 09 @ 6:29 pm
Yellow Dog, you asked for a “comprehensive plan” to deal with the budget problem.
Here it is.
1)Immediately exempt all non-Federally funded public construction from prevailing wage mandates. Best estimate for savings, about $1-$2 billion per year at all levels. Since local municipalities, counties, townships and schools, the amount of state aid they receive can be reduced by a substantial percentage of the savings by letting them pay fair market rates for repairs, maintenance and construction. This could save between $3-5 billion of the $26 billion “capital plan” boondoggle, depending on how much matching Federal funds have Davis Bacon strings attached.
2) Cut Medicare eligibility from 400% of poverty level to about 200%. I haven’t been able to find a good number on this, but even assuming 600,000 recipients are affected, and the sliding scale for copays is 50% of the usual $2,600 state contribution, this has potential to save about $780 million per year.
3) HMOs for Medicaid-My HMO costs about $2,600 per person,including copays, employer match, and 2% adminstrative fees. The number should be even lower for a large group that has a high number of children covered. This is about half the average Medicaid cost. Assuming the eligibility is dropped per part 2 to about 1.85 million, that couild save as much as $2.4 billion. Take about 400 mill out for governement waste, inefficiency and corruption, and the savings should still be about $2 billion.
4) End early retirement benefits next year, When originally passed, the estimated cost of early retirement was an additional $450 million per year in pension contributions.
5)Stop “end of career” pension sweeteners like the 4 year, 6% raises and inclusion of vacation and decades of “sick” time in pensions calculations. Overall, this should reduce pension obligations by about 20%. I haven’t got a good number for scoring this, but it should be at least $200 million.
6) End the “hold harmless” payments. Districts with declining enrollment do not need increased revenues unless they have new “special needs” students, but that’s a different category.
7)Cap increases in school and municipal salary and benefit contracts to 75% of new revenues, exclusing borrowing and construction. This will allow state aid per student to be moderated to about the CPI instead of the custonmary increase of about double the CPI from state and local sources. I’m still working on how much general aid can be saved this way.
8) Line item veto every part of the capital bill that isn’t needed for life safety, or matching Federal funds. Postpone, or eliminate, all other public construction. I’m still working on quantifying this.
9)End having Spring elections for municpal elections. I understand these elections cost about $16 per vote, and add no value. There’s an easy $35 million.
Of course, a well ordered reorganization and reprioritization of state resources will be very difficult this year. We may have to borrow this year, pay it off in the next 5 years through state government reduction in expenditure.
If we raise taxes, this necessary fiscally responsible re-inventing of state government will never happen.
I believe all these policy changes are legal, but the “takers” will fight ANY reductions tooth and nail.
Mr Schnorf, I respect your opinion. What do you estimate the savings from these policy changes would be, and what legal roadbloacks are there to making them?
Comment by PalosParkBob Monday, Jun 8, 09 @ 9:15 pm
Steve Please
Ryan attempted to control spending. Give me a break. He is the one that allowed the highway maintainers to free ride there way out with the 2.5% pension enhancement and then pushed through the illinois first program that allowed every legislator to go around the state and drop dollar bills around like they were free money.
Ryan only made bad things worse. Except for those willing to pay to play.
Comment by Bill-O-Rights Monday, Jun 8, 09 @ 9:17 pm
Palos Park Bob
5)Stop “end of career” pension sweeteners like the 4 year, 6% raises and inclusion of vacation and decades of “sick” time in pensions calculations. Overall, this should reduce pension obligations by about 20%. I haven’t got a good number for scoring this, but it should be at least $200 million.
I cannot speak to the 4 year annual 6% bump since I know alot of state workers who have average a little over 0% over the last 6 years but I do not agree with your assumption about the big savings with pension sweeteners.
one recent decade of never missing a sick day will only get you less than 3 months of additional creditable service added to your retirement. I much rather see a state employee getting this as an incentive than to take off 120 sick days.
The real issue here is for years the state employees pension system was unfunded and used to balance balance the states budget.
Us tax payers did not protest this and now we have to cough up the extra cash to cover for the short falls in revenues that we are currently seeing.
Comment by Bill-O-Rights Monday, Jun 8, 09 @ 9:36 pm
I have spent the last month cleaning up storm debris in Southern Il from the May 8 inland hurricane. I work for IDOT and it seems the TAB board wants to outsource our jobs in the near future!! Southern Illinois has had floods, snow storms, 2 ice storms, major wind damage, a earthquake and a inland hurricane all since 9/11. Thats just the lower 18 counties!!
Comment by mason Monday, Jun 8, 09 @ 11:42 pm
BoR: You simply have no idea what you’re talking about. The average annual increase in GRF approps under George Ryan was the lowest of any Governor since the income tax–simple fact! Debt service increased as a result of Illinois FIRST. I have no problem having local elected officials decide at least some of the capital or other one-time projects in their areas. I’m surprised you do. And BTW, one time member initiative projects out of non-bond funds soak up dollars that would almost certainly otherwise have gone into base spending. Of course, that’s just what I know of it. You may have been in a position to know more than I did.
Comment by steve schnorf Monday, Jun 8, 09 @ 11:51 pm
PP Bob-
#1 - IL is a long-entrenched union state, not a right to work state. Public works will be largely performed by union labor for the foreseeable future…IL missed the Reagan revolution but helped initiate Obamarama. If you want to be a taxpayer in a non-union state, move south.
#4 - can’t end it for current employees or retirees, “diminished benefits” argument would prevail if it ever went to court on IL judges COLA case precedent, among other legal snares. No immediate savings for applying it to future hires.
Bill O’-
If the alternative formula is eliminated for highway maintainers, it should be done away with altogether. They have a higher on-the-job fatality rate than corrections or state police.
Comment by Six Degrees of Separation Tuesday, Jun 9, 09 @ 1:04 am
BoR-the 4 year 6% raises are currently given almost without exception to K-12 staff in the TRS pension fund.
A couple years ago the GA ended the two year, 20% per year raises just prior to early retirement that were given, and changed it to 4 years at 6% per year, compounded. The end result was that the pension amounts were virtually unchanged from the 20% bumps.
That’s why the unions didn’t put up much of a stink about it.
When I called my State Rep about this, he said the 6% bumps “solved the problem”. When I brought up the fact that it didn’t change the pension costs for the state or overall state liability, he seemed shocked that someone actually did the math.
Of course, my state rep is a VERY good actor!
Comment by PalsParkBob Tuesday, Jun 9, 09 @ 7:08 am
Bob, you and I have had this debate several times in the past, but here we go again…
1) The Early Retirement Option for TRS has never, ever had a cost estimate of $450 million in annual contributions; not even close. When originally enacted nearly 20 years ago and until about 2000, the ERO was cost-neutral. When the 2.2 benefit formula was adopted in 1998 and as teacher salaries crept upward, the old math didn’t work. The TRS Director at the time decided he would leave that problem for his successor to tidy up. By the time ERO was due for renewal in 2005, the effect on TRS’ unfunded liability in FY 2004 was about $450 million. The modified ERO now in place wherein all teachers, school districts, and teachers retiring via ERO pay more $$ restored the cost neutrality. If not, the contributions will be adjusted in 2012 or ERO will be discontinued.
You can find the documentation for all of this on TRS’ and COGFA’s Websites.
2) You are equally misinformed if you think that eliminating end-of-career raises and counting vacation/sick days toward pension eligibility will “reduce pension obligations by about 20%.”
In order to reduce the pension obligation by 20%, you would agree that those items must currently make up at least 20% of that obligation, the obligation being TRS’s total liabilities. Well, they’re not even close. The average teacher retires with around 30 years of total service, of which slightly less than 2, or 6.7%, not 20% can be attributed to sick leave or vacation days.
Even the “actuaries” hired by Filan admitted that the State underfunding cost TRS much more than any end of career pay raises. Which brings me to:
3) You clearly were not a math or finance major if you think that 6% “compounded” for four years is “the same” as 20% per year for two years. The 6% over four years (at 6% interest) is about 26.3%, and 2 20%’s totals 41.2%. Not even close.
Next time you get on here to bash schools and teachers’ unions, use real numbers.
Comment by Arthur Andersen Tuesday, Jun 9, 09 @ 9:37 am
AA-Actually, this is the first time you’ve responded to these issues.
In response,in no particular order,
3)You really need to get a calculator, and if you really worked for Arthur Anderson, it explains a lot towards its demise.
Under the 4 year 6% raises, a teacher or adminstrator making $100K would have the following salary progress:
Year 1 $106,000
Year 2 $112,360
Year 3 $119,102
Year 4 $126,248
4 year total-$463,710
Pension basis-$115,927
For the two year 20% system,
Year 1 $100,000
Year 2 $100,000
Year 3 $120,000
Year 4 $144,000
4 year total-$464,000
Pension basis-$116,000
You only calculated the last year’s salary, while the pension is based upon the last 4 years. As you can see, they ARE virtually identical!
You’re not really an accountant, are you?
2) I didn’t say that our TOTAL liabilities would be reduced by 20% by ending pension sweeteners, only new ones. The previously calculated pension comparison showed that even the “end of career” raises boosted pensions by 16%, and the accumulated days are often paid at the current, inflated rate, even if the sick days were “earned” a decade ago. How much is paid in a lump sum depends on the contract between the district and the union. Most districts give about 10 sick days per year, so over a decade a healthy teacher can accummulate 100 days, payable at the final year rates. In the previous example the lump sum would be over $68,000, or an addition of 17% to the pension basis.
I only assumed it added 4% in my calculation. That is conservatively low.
You really should apply “real world” applications to your miscalculations.
1)Regarding “cost neutral” early retirements, if a teacher is 55 and has 35 years of service, they pay nothing additional. If they have between 20 and 35 years experience, the retiree pays 11.5% of their largest salary for each year of age less than 60 and the school district pays 23.5%.
Using the previous example, the teacher would get a pension of about $86,500 per year at retirement.
If they paid for 5 years in early retirement, the total payment from the district and teacher would be about $221,000. The present worth at a 3% interest rate would require a $398,000 payment to be “revenue neutral” to the state for five years of additional pension. The contribution would be about $178K short. I simplified the calc to a single payment per year, but the result would be similar if I broke it down into monthly payments.
My guess is the way they made this “cost neutral” was to make assumptions about average service and age, that may or may not be accurate. Due to the fact that they underestimated the liability by about $450 million in 2004, There’s no reason to believe their numbers are much more accurate than my estimates.
As far as my “math literacy” I’ve taught college courses in quantitative analysis and have taken 25 semester hours of advanced math past 13 hours of elementary calculus. I’ve studied areas of math you likely couldn’t even pronounce, so save the condescention and insults!
Please note that the school districts are burdened with a $148K cost in this case to have some of their most experienced faculty, and allegedly most effective by salary schedule, stop teaching.
Schools paying a fortune to their “best” teachers not to teach the kids.
That pretty well sums up why the state is broke and public education is always in financial “crisis”!
To add insult to injury, it is not uncommon for suburban school districts to also pay the teacher’s early retirement contributioins.
Comment by PalosParkBob Tuesday, Jun 9, 09 @ 9:06 pm
One other thing I just realized about advantages to the unions for the switch from 2-20% to 4-6% raises.
While the pensions amounts are equivalent, the early retirement payments are WAY smaller for the teachers because the early retirement pre-pay is a based upon the highest salary year.
With the 20% option, the district and teacher payment would be about $252,000 based upon a $144,000 salary. With the 6% option, the payment would be about $221,000, about $31,000 less for the district and teacher.
I’ll bet they didn’t add THAT in the scoring of the costs!
Comment by PalosParkBob Tuesday, Jun 9, 09 @ 9:40 pm
Bob, smack me 100 times with an abacus, because you are 100% correct on item #3 above. FWIW, AA is not a CPA and never worked for Arthur Andersen. Those people were way too boring for me. We’ll save my vita for later, but I can crunch numbers with Springfield’s best.
Beyond that, with all due respect to your mathematical skills, you still are “laboring” under sone misconceptions.
Remember that most, if not all, sick leave is not cashed out, it is used for service credit. In Downstate TRS, it’s one or the other. In Chicago, one can have their cake and eat it, too, as they allow double-counting. To the extent any sick days and (more commonly) vacation days are paid in cash at retirement, you are correct that they would be paid at the final salary rate and not the rate at which they were earned. However, taken in combination with these 6% end-of-career raises you insist are “given without exception” vacation and sick day lump sum payments will be very costly to the school district, as they will cause the final salary to exceed the 6% cap, triggering required payments to TRS.
We’ll find out in a couple years if the required payments for ERO truly made it cost-neutral; if not, they have to be adjusted or the provision sunsets. Remember that the $450 million cost, or underestimation as you call it, was not a calculation error as much as an advanced rate of retirement by many teachers who thought the ERO would not be extended. Real world, dontcha know?
One issue we do agree on is the absurdity of schools offering up substantial sums to some of their best faculty to go away early. Just not right.
Peace, AA
Comment by Arthur Andersen Thursday, Jun 11, 09 @ 1:11 pm
Thanks for the additional useful info, AA.
FYI, I have it good authority that many suburban districts ARE coughing up the extra bucks for exceeding the 6% limit,especially for administrators who’ve done a lot of
“favors” in hiring and doling out those $50K no-bid contracts (recently expanded by the GA from $10K) for the school board and their political masters.
I really wish we taxpayers had an advocacy organization as competent as the IEA. Those folks are so slick that they could stab you in the back and pick your pocket, then send a bill for “surgical and financial services”! LOL
They really outsmarted us on the lower early retirement fees from the 6% raise plan.
I wonder how many legislators actually knew how much more the “reduction” in raises was going to cost us!
Comment by PalosParkBob Thursday, Jun 11, 09 @ 3:27 pm