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* The Republicans appear to be calculating that Gov. Quinn won’t pull the trigger on massive budget cuts…
House Republican leader Tom Cross said he doesn’t know if Quinn can “pull the trigger” on deep human services budget cuts.
“I think he’s too good a human being, too compassionate a human being to harm the social service agencies,” Cross said.
The Republicans, as you already know, want either a “month to month” budget that would drag this thing through the summer and into the fall, or a “six month budget” using available funds. The governor has rejected the second idea, but I don’t believe he’s been asked about a one-month continuing appropriation. And Mother Tribune hates the idea of putting off a budget resolution for six months…
Some of those lawmakers think they’ve found a way to finesse their dilemma: They might vote for a big tax increase — but only after they learn whether they’ll have serious primary election opponents next year. Think of this as calculated cowardice.
* As I told subscribers last week, this pension note idea is under serious consideration…
Watch for a new pension proposal that could help buy some time for the state to recover from the economic slump and free up about $2 billion during the next cash-strapped year.
Gov. Pat Quinn’s administration could propose issuing pension obligation notes, which differ from pension obligation bonds. A note is a form of short-term borrowing that would have to be repaid within five years. The state does short-term borrowing all the time. The notes could carry a lower interest rate than pension obligation bonds, which are repaid over much longer periods of time. […]
One of the largest pressure points on the state budget for the next fiscal year is the contribution to the public employee pension system. Illinois is supposed to pay about $4 billion. Quinn proposed skipping next year’s payment to free up about $2 billion to help fill what his office estimates will be an $11.6 billion deficit. The legislature rejected the idea of skipping the payment; however, the Democratic-approved budget only authorized $1.5 billion for the state’s contribution into the pension system. If enacted, money would have to be skimmed from other state programs to cover the full $4 billion payment, which is required by law. […]
With the $1.5 billion already approved, one idea would be to issue about $2.2 billion in pension notes. That would get the state to about $3.7 billion, leaving only about $300 million that the state needed to find to get all the way up to $4 billion.
* State Sen. Chris Lauzen (R-Aurora) has his own budget solution…
Call President Obama and ask him to give the state carte blanche to use the federal stimulus money as operating cash. Lauzen said he would not support a tax increase.
He’d have to call Congress. They’re the ones who passed the law.
* My weekly syndicated newspaper column looks at the budget mess and a new poll…
Usually when polls are taken about tax hikes, the respondents are “informed” about the benefits of raising more government money, whether it’s for education, public services or what have you. So not surprisingly, those polls regularly show lots of support for tax increases.
But a recent poll of 800 Illinois voters taken this month on behalf of the Illinois Coalition for Jobs, Growth & Prosperity, a business group, only asked whether Illinoisans favored raising taxes to balance the state’s budget.
Because the state is in such a deep hole, that’s pretty much all any tax hike will go for anyway - and it won’t even fully accomplish that. And because most people don’t pay a great deal of attention to state government, that’s all they probably know about the tax hike plan anyway.
So, the results probably won’t surprise you.
A whopping 73 percent opposed hiking taxes to balance the budget, while only 23 percent supported the concept.
According to the poll, 82 percent of Illinoisans believe the governor and lawmakers have not done enough to control state spending.
That’s also not a surprising number. Very few governments ever do “enough” to control spending.
The poll asked lots of questions about forcing someone else to bear the brunt of the multibillion-dollar budget deficit nightmare this state faces.
Cut pension benefits for newly hired state workers? Seventy-two percent agreed. Force the state employees union to reopen its contract and renegotiate pay raises? Seventy-four percent said, “Heck yes.” Require unpaid furloughs for state employees? Sixty-five percent were on board. Make state workers pay more for health care? Sixty-five percent wanted it. Roll back Medicaid eligibility a bit? Seventy-two percent were for it.
The survey asked just one specific question about “shared sacrifice.” Human beings tend to want somebody else to carry the load, so the answer to this question wasn’t all that amazing, either.
“Would you support closing state facilities like aged prisons, state parks, historic sites until the state’s finances improve?” the pollster asked.
“No” was the overwhelming response. Almost three-quarters, 74 percent, said they don’t want those facilities to close during the budget meltdown.
Well, too bad.
You can’t come close to balancing the budget - currently estimated at $9.2 billion in the hole - even if the General Assembly enacted all the spending reforms so widely supported in that poll. It would barely make a dent.
The only real way to close that gaping hole is to do the things that three-quarters of Illinoisans don’t want, and a whole lot more.
I assume that if voters were asked the same question about closing down rape treatment centers, drug abuse rehab facilities, scholarship funds for college students and programs for autistic and handicapped children the “no” responses might be even higher.
What about day care for financially strapped single mothers struggling to get on their feet? Home care for the elderly? The “no” responses probably would be off the charts.
We assume that because we live in the richest nation in the world that devastating governmental shutdowns like those listed above shouldn’t happen and couldn’t happen.
Unfortunately, times have changed. Gross mismanagement by Rod Blagojevich (a governor who was elected twice, by the way) and the worst economic climate since the Great Depression mean that one of two things has to happen:
1) Those programs and facilities listed above and many, many more are going to have to be shut down; or
2) Taxes will have to be raised and many of those programs might still have to be shuttered because the budget hole is so big.
I keep seeing newspaper editorials, columnists and letters to the editor practically begging for some sort of magic solution to this problem. Can’t something be done without raising taxes and still preserve vital programs and public facilities?
You have to cut where the spending is.
There is no magic bullet. President Barack Obama has said the states aren’t getting any more bailouts. Our state Constitution, which Illinois voters overwhelmingly refused to change last year, requires a balanced budget.
As I write this, legislators are scheduled to return to Springfield to attempt to deal with the budget disaster. If they can’t find a solution, the doomsday will be upon us. Maybe then Illinoisans will realize what “balancing a budget” is really about.
The budget, in the end, is about all of us. It’s our responsibility. I just hope you don’t have to find that out the hard way.
* Neil Steinberg…
After I wrote Friday about the failed tax cut leading to devastating reductions in social programs, many readers reacted by claiming the solution is to cut waste and fraud. Then there’ll be plenty of money. “It is not too much,” one wrote, “for the taxpayers to expect the corruption to stop now.”
Yes, it is. To say, “Cut waste and you’ll have enough to fund everything” is a theory, a hunch, based on distrust of government — justified distrust, to be sure. But given the tenacity of corruption in Illinois, to demand that it end before social services are funded is a straw man argument.
Corruption and funding social services are not unrelated, but one is a perennial problem and the other is a house on fire.
Which brings us back to the GOP demand for pension reforms as a condition for voting to raise taxes. The largest state employee union, the American Federation of State, County and Municipal Employees, and the Illinois Federation of Teachers and the Illinois Education Association are all opposed to tampering with pension benefits. These are pretty powerful groups that throw around a lot of campaign cash. Most lawmakers are careful about crossing them.
Wouldn’t it be fun, though, to see a bill that changes pension benefits for these groups get a vote in the General Assembly? Just to see how many Republicans are still demanding pension reforms when the vote counts.
* Interesting points on Medicaid reform…
The Taxpayer Action Board report says, “Other states have had significant success in implementing a broad-based capitated managed-care program, including North Carolina, Pennsylvania and Wisconsin.”
But taxpayer board member Dory Rand, president of the Chicago-based Woodstock Institute and an advocate for low-income people, wrote in a dissent that Illinois’ fee-for-service Medicaid program spends less per patient than those three states and 38 others.
She wrote that this data, from the nonpartisan Kaiser Commission on Medicaid and the Uninsured, supports the Quinn administration’s contention that “its management of the fee-for-service program results in lower costs to the state than if the program relied more heavily on a capitated managed-care model.” [Emphasis added]
* I built a subscriber story around this very same 1989 speech several days ago. It’s probably just a coincidence that GateHouse uses it now, I’m sure…
History has shown, though, that even the skeptical can change their minds [about tax hikes]. In 1989, House Speaker Michael Madigan, D-Chicago, delivered a speech to the House in which he picked apart Thompson’s earlier dire warnings.
“We were told that if we did not pass the $1 billion tax increase that thousands of state employees would be laid off,” Madigan said. “Well, what really happened was that nobody was laid off and in that year the administration hired 3,000 new workers.
“We were told that if we did not pass the tax increase, that one of our largest prisons, the Menard Penitentiary would be closed,” Madigan continued. “Well, as you know, Menard is still operating.”
After talking about how frugal the state had been, Madigan said, “This is a state which does not automatically see the solution of every problem expressed in a call for higher taxes.”
Towards the end of that session, Madigan announced and jammed an income tax hike through his chamber in less than a day. Then again, all the new tax money went to schools and local governments. Not a dime went into the state budget.
* Quinn wants tax vote Wednesday
* Questions loom as state lawmakers get back to work
* Quinn continues budget campaign
* Illinois Lawmakers to Resume Budget Talks
* Tax hike needed to save services, activists say
* ISBE: State funds for preschool programs could be halved
* Foster care children at risk
* Hundreds rally to save social services
* Social services held as budget hostages
* Illinois’ wavering budget problems affecting agriculture
* Illinois ag officials watching budget fight
* Should state pay $4 billion into retirement plan?
posted by Rich Miller
Monday, Jun 22, 09 @ 10:09 am
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