Illinois...a sad State of affairs

[macrockett]

www.suntimes.com/news/brown/2096367,CST-NWS-brown11.article#

State's in hock, and all of us are on the hook
We have to pay bills, even if it means spending cuts, tax hike
Comments

March 11, 2010

BY MARK BROWN Sun-Times Columnist

Illinois: Land of Deadbeats. Who am I talking about? Me, you, your neighbor Kathy, your Uncle Bob, every last one of us who makes this state our home.

Gov. Pat Quinn delivers his State of the Budget address to a joint session of the Illinois General Assembly on the House floor at the Illinois State Capitol in Springfield, Ill., Wednesday. His plan depends largely on borrowing and letting unpaid bills pile up for another year.

Sorry, I don't mean to be impolite, but what would you call somebody going on six months late in paying their bills? Better yet, what would you call somebody six months late in paying what they owe you?

Well, as of Wednesday, our state government was working on paying its bills from last September.

And whether you like it or not, the state's bills are our bills. Our responsibility. Not just morally, but legally. We're on the hook. The whole People of the State of Illinois thing.

We can -- and probably will -- argue from now to Election Day and beyond about the budget proposals outlined Wednesday by Gov. Quinn, but I would hope we could find common ground about one aspect of what the governor had to say.

"When we fail to pay our bills, we are basically borrowing money from public schools, colleges, social service agencies, small business owners and other community partners throughout our state," Quinn said. "Paying our bills late is not right, and it's not smart."

In effect, the state is "forcing our vendors to float us a loan," Quinn said.
$4.4 billion in unpaid bills

Again, there is plenty of room for debate about Quinn's proposed solution, which is for the state to borrow money short-term through the normal credit markets to help reduce the backlog.

But give the governor credit for framing the issue in the proper context.

If we're going to borrow the money, we should at least have the decency to borrow it from somebody who has the specific intent to lend it to us, not some vendor left holding the bag because we don't have the collective willpower to either rein in spending or provide the government with the revenues it needs to pay for the services rendered.

We're not talking here about some amorphous concept of federal debt. We're talking about people who did a job, provided a service or supplied some product at an agreed price -- and now we won't pay them.

The state's backlog of unpaid bills was $4.4. billion Wednesday. I realize that when a number gets that big, that's all it is, just a number. So, it won't make much more of an impression to say the backlog is expected to reach $6 billion by June 30.

But as that number grows, the payment cycle gets that much slower, and we sink that much further into the deadbeat swamp.

In case it's not clear, this isn't one of those artificial crises. The state doesn't have the money to pay these bills.

What money it does have must go first to pay debt service on funds it intentionally borrowed, to pay general state aid to schools, to make the state payroll and, for the time being, to pay the Medicaid charges of doctors, hospitals and nursing homes.

The latter group jumped to the head of the line in front of other state vendors under the federal stimulus legislation, which requires states to pay them within 30 days as part of the price of accepting the federal funds.
Government can't cut enough

About all that accomplished was to gore somebody else's ox. It used to be the Medicaid providers who got the worst treatment from the state. Now it's everyone else, from the landlords who rent space to state agencies to the people who provide in-home health-care services to the elderly.

The state comptroller's office is left with the challenge of sorting out the rest of the bills to decide who gets paid first, which is more complicated than first-in, first-out when you run into complications like a prison in danger of a utility shutoff.

Quinn proposed increasing the state income tax by a third, with the money going to education, which would at least reduce the backlog owed to our colleges and schools, though not to the others.

I've always said I'm on board for a tax increase. I realize many of you aren't. You want the government to cut spending. So do I, but I don't think they can cut enough. It would help if Quinn had a little more credibility about his own intentions to cut spending, having failed to clearly demonstrate that as a priority in his first year on the job.

I called Illinois the Land of Deadbeats to get your attention because I know most of you take pride in paying your own bills on time and keeping the wolf away from the door. Somehow we have to translate that to our expectations for our state government.

RELATED STORIES
Gov seeks tax hike for education How education might suffer if tax fails Editorial: 1% tax hike too little Child care, AIDS prevention hit Sneed: Timing a tax hike Higher retirement age eyed State Police would lose 500 PTSD counseling, military families affected Politicians responses to Quinn's budget

[macrockett]

www.suntimes.com/news/maxedout/2096771,CST-NWS-QUINN11.article#

Gov seeks 33% tax hike for education, billions in spending cuts
QUINN'S BUDGET | 'Some difficult, painful choices'
Comments

March 11, 2010

BY DAVE McKINNEY AND STEVE CONTORNO Sun-Times Springfield Bureau

SPRINGFIELD -- Uncorking a risky election-year gambit, Gov. Quinn on Wednesday proposed a 33 percent increase in the state income tax to avoid "sacrificing the future of a generation of children."

Quinn's push to hike the tax on Illinois workers' paychecks from 3 percent to 4 percent came with a promise to devote all of the $2.8 billion in new annual revenues to education, staving off the $1.3 billion in cuts the governor aimed at the state's schoolchildren and university students if the tax hike doesn't materialize.

RELATED STORIES
Editorial: 1% tax hike too little, but better than none Brown: State's in hock, and all of us are on hook How education might suffer if income tax increase fails Child care, AIDS prevention hit PTSD counseling efforts, military families affected Higher retirement age eyed State Police would lose 500, Operation CeaseFire its funding Sneed: Timing a tax hike Politicians responses to Quinn's budget

"I believe this 1 percent for education makes sense, and I think the people of Illinois will understand," the governor said during a 20-minute budget address to both chambers of the General Assembly.

The tax hike would deal with only a portion of the historic $13 billion budget deficit that has made Illinois one of the least-solvent states.

In laying out a proposed $55.1 billion budget for the fiscal year that starts July 1, Quinn proposed $2.2 billion in program cuts, $4.7 billion in borrowing and more than $6 billion in unpaid bills being pushed off into the following year.

Pushing the increase at the same time he is running for governor effectively makes the tax hike the defining issue in his campaign against Republican gubernatorial nominee Bill Brady, a state senator from Bloomington who blasted Quinn's tax hike and called his borrowing plan "a catastrophe."

"I don't think it's going to work to bring private-sector jobs to increase taxes on families 33 percent," Brady said. "It's not going to work to bring business investment back to this state in jobs when you send a message that we're not going to solve our fiscal crisis, we're going to try to borrow our way out of it."

The tax hike Quinn proposed represents a scaling back of what he pushed last year, shortly after taking over for impeached ex-Gov. Rod Blagojevich. Quinn talked then about boosting the income tax by 50 percent, raising the rate on individuals from 3 percent to 4.5 percent.

Since that plan failed miserably in the Democratic-led House, the governor didn't have to explain why he now favors a smaller increase, even though its prospects appear iffy, at best.

House Speaker Michael Madigan, who has repeatedly condemned Republicans for refusing to put votes behind an income-tax hike, praised Quinn's courage in pushing the new plan. But the speaker actually made a compelling case against it during a televised interview after the governor's speech.

"Let's be straightforward about this. The people of Illinois, they don't want tax increases. They're hurting. The American economy is in bad shape. People are out of work. They don't want to hear about tax increases," Madigan said.

"You should admire the governor for standing up in these times and say, 'Look if we wish to maintain the fiscal integrity of this state, then we ought to do this tax increase.' That doesn't mean it's going to happen," Madigan said.

Madigan's GOP counterpart, House Minority Leader Tom Cross of Oswego, said his 48-member caucus has no interest in signing on to a tax hike without first gaining commitments to cut spending, reform pensions and Medicaid and make business-friendly changes to the state's workers compensation laws.

"Today is a political ploy to try to scare the General Assembly into supporting a tax increase," Cross said.

For his part, Quinn did deliver promises of major spending cuts, offering up painful spending reductions to programs for the developmentally disabled, military families and subsidized child-care services for the working poor.

Quinn also took aim at the State Police, cutting $25 million in personnel costs that would result in the loss of 500 positions in the law-enforcement agency.

All told, the governor put the total amount of cuts at $2.2 billion, though that publicly stated number differed from $2.7 billion in cuts outlined on a special Web site the governor launched two weeks ago to gather public input on the state's spending priorities. Quinn's budget office vowed late Wednesday to reconcile the two spending-reduction totals.

"I have made some difficult, painful choices in this budget," Quinn said earlier. "You must make tough choices as well. Either by approving a plan for new revenue for education or by passing a budget that will starve public education at every level in every community in the state of Illinois and force property taxes even higher.

"We have a tough fight ahead of us, but I believe we can get through this difficult year together," the governor said.

RELATED STORIES
Editorial: 1% tax hike too little, but better than none Brown: State's in hock, and all of us are on hook How education might suffer if income tax increase fails Child care, AIDS prevention hit PTSD counseling efforts, military families affected Higher retirement age eyed State Police would lose 500, Operation CeaseFire its funding Sneed: Timing a tax hike Politicians responses to Quinn's budget

[macrockett]

www.suntimes.com/news/maxedout/2096912,CST-NWS-quinned11.article#

How education might suffer if income tax increase fails
EDUCATION | $1.3 billion in cuts

March 11, 2010

SUN-TIMES STAFF

Gov. Quinn's bid to raise the state income tax from 3 percent to 4 percent would avert $1.3 billion in cuts he otherwise vowed to make to public schools, community colleges and universities.

If the tax-hike proposal fails, Quinn proposed cutting:

• General state aid to public school districts by $613.1 million, which would lower the amount the state spends on average per pupil from $6,119 to $5,669.

• Reimbursements to school systems for mandated programs such as special education and transportation by $401.9 million.

• Curriculum and instruction programs by $162.4 million, including $20.3 million less for bilingual education and $54.3 million less for early education.

• University funding by between 6 percent and 6.2 percent, amounting to $83.1 million in lost state dollars for nine universities.

[macrockett]

www.suntimes.com/news/commentary/2096165,CST-EDT-edit11.article#

1% tax hike too little, but better than none
Comments

March 11, 2010

We have seen the future, and it is the past -- the irresponsible past.

After watching Gov. Quinn's budget speech Wednesday -- and witnessing the hostile reaction of Republican critics minutes afterward -- we have little doubt that Illinois will continue to kick its massive financial troubles down the road for years to come, driving up deficits, underfunding vital services and borrowing heavily.

The centerpiece of Quinn's proposal Wednesday was a 1 percentage point increase in the state corporate and personal income taxes, which he blandly called a "surcharge," largely to avoid deep cuts in funding for elementary and high school education.

It's not enough, still leaving the state with a $9 billion deficit. We and others, including the Civic Federation, have argued for a tax increase twice that size as an essential component of any real solution.

But 1 percentage point looks to be all that Quinn thinks the Legislature will go for -- and he'll be lucky to get that. Tax increases in election years are only slightly more common than warm days at the South Pole.

Reluctantly, then, we find ourselves supporting this slim tax increase. Not because it's good enough, but because it's something.

We admire Quinn's savvy in tying the increase to elementary and secondary school funding, which he warns would otherwise suffer a $1.2 billion cut in state money. He knows it's a lot easier to pass a tax increase once you've rallied parents, teachers and the unions to your cause. But it is also indisputably true that the schools are in a precarious spot, with $922 million in federal stimulus money soon to run out.

We would prefer a more progressive tax increase, with breaks for lower-income people, but Quinn's team tells us they see no support for that. The real downside of Quinn's modest tax increase may be that it makes a later second tax increase -- though still badly needed -- all but impossible. No politician wants to vote for one increase, let alone two.

Asked if they would support the tax increase, Republican leaders in Springfield dismissed it as a "tactical maneuver" and complained that Quinn has done too little to rein in government spending through reforms to the pension system, Medicaid and other structural changes.

Medicaid reform? We're all for it -- which is why we support Quinn's proposal for a managed care pilot program. It would move 40,000 of the state's 150,000 elderly, blind and disabled Medicaid recipients to private HMOs to lower costs and improve care. To say Quinn has ignored the issue is inaccurate.

Pension reform? Here Quinn could do more and possibly build bipartisan support for his tax increase. We urge the governor, who says he supports pension reform, to produce a bill quickly -- within the next couple of weeks -- that lays out the details.

But even if Quinn accomplishes all this and gets his tax increase, the state still will have to borrow huge sums to balance its budget -- as much as $5 billion. This reckless practice, which the state has perfected over the years, must stop.

As in every Illinois household, borrowing to pay for basic expenses -- groceries, utility bills, rent -- only digs you deeper into a hole.

Over the last eight years, the state has sold $13.5 billion in bonds to pay its pension bills. The result? The debt service will cost the state nearly $23 billion, according to the Civic Federation. The state also borrowed $2.25 billion last year to pay its bills, costing taxpayers an extra $29 million in interest.

"And it doesn't fix anything," says Laurence Msall, president of the Civic Federation. "It doesn't reduce spending, it doesn't provide new revenues."

Borrowing makes sense only in certain limited situations, such as to bring in cash to win federal matching dollars.
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HUH? Sun Times, you championed the cause for the need for pension reform and before that is instituted you get government a pass on more money? Forget it. Cut first, then we will see if you are serious about fiscal responsibility in Illinois.

[macrockett]

www.suntimes.com/news/maxedout/2096907,CST-NWS-quinnhealth11.article#

Child care, AIDS prevention hit
HEALTH & HUMAN SERVICES | $601 million in cuts
Comments

March 11, 2010

SUN-TIMES STAFF

Gov. Quinn proposed $601 million in cuts to health and human services programs, including:

• $76.1 million in child-care programs.
RELATED STORIES
State's in hock, and all of us are on the hook Gov seeks tax hike for education, billions in spending cuts

• $104.6 million in programs for the developmentally disabled.

• $1.9 million for domestic violence shelters.

• $1.5 million for prostate cancer advertising campaigns.

• $1.5 million for grants to prevent HIV/AIDS in African-American communities.

• $1 million in grants for research on Lou Gehrig's disease.

[macrockett]

www.suntimes.com/news/maxedout/2096905,CST-NWS-quinnpensions11.article#

Higher retirement age eyed
STATE WORKERS/PENSIONS | More than $500 million in cuts

March 11, 2010

SUN-TIMES STAFF

Gov. Quinn wants to impose $503 million in cuts, affecting the current state work force and future retirees. The governor wants to save:

• $203 million by seeking employee furloughs, increasing how much state employees pay toward their health insurance and imposing travel restrictions.
RELATED STORIES
Database: Search pensions of gov't workers, survivors

• $300 million in changes to the pensions offered to state employees, though Quinn's administration declined to offer specific details about how this figure was compiled. Senate President John Cullerton (D-Chicago) expressed support Wednesday for boosting the state's standard retirement age of 60 and capping pension payouts.

[macrockett]

www.suntimes.com/news/blogentries/index.html?bbPostId=A6cPjenxVrFB6WBRpC74oxcCz5eiTf1PI0EHB5KYiIVcrr7f&bbParentWidgetId=B8k88rWwXopuz5STgLeVwBLu

Service Employees Int’l Union Gives $1.7 Mil to Ill. Gov. Quinn

Friday, March 05, 2010

-By Warner Todd Huston

The Service Employees International Union wants YOU to pay more taxes, Illinois. And, in order to get their wish, they’ve donated $1.7 million to the one candidate that has since the beginning promised to raise everyone’s taxes, Governor Pat “Mighty Taximo” Quinn.

Oh, it’s a cozy arrangement, of course. The SEIU represents many of Illinois public employees. These greedy folks want YOU to pay their way in life, you see? So, big cash goes to Quinn the Mighty Taximo so that he’ll force higher taxes so that, in turn, these public employees will get even greater pay and even more undeserved benefits that other, private sector citizens don’t get. It’s a Faustian bargain, but it is a fact, nonetheless.

As everyone else in the state is losing his job, these trough-feeders want you to pay more taxes for their comfort. Nice work if you can get it, right?

Check out this line of BS from Illinois SEIU chief Tom Balanoff who wanted to explain to the media why Illinois’ budget is in such a mess:

“This situation has not been created by overspending. This has been created by a lack of revenue.”

You see, Illinois. It’s YOUR fault because you won’t pay enough taxes to allow these thousands of employees to get rich off the state when they retire at 50-years-old.

Of course, this is the same union that was in bed with Rod Blagojevich, only our latest governor is headed to jail, so you know that scruples aren’t a concern.

It all goes to line up with our insistence that public employees unions are anathema to good government and should be eliminated.
------------------------------
Got that right, but why doesn't the Sun-Times weigh in here?

[macrockett]

www.suntimes.com/news/maxedout/2096906,CST-NWS-quinnquotes11.article#
Politicians responses to Quinn's budget
Comments

March 11, 2010

SUN-TIMES STAFF

House Minority Leader Tom Cross (R-Oswego)

''No one wants to see K-12 decimated the way he's talking about. At the end of the day, this isn't going to happen. He will not introduce a budget that provides for $1.2 billion in cuts to the education community. This is a scare tactic."

House Speaker Michael Madigan (D-Chicago)

''You should admire the governor for standing up in these times and saying, 'Look, if we wish to maintain the fiscal integrity of this state, then we ought to do this tax increase.' That doesn't mean that it's going to happen. But at least he had the courage to come before the General Assembly, address the people of the state of Illinois, and be honest.

Senate Minority Leader Christine Radogno (R-Lemont)

"What happened today, the governor just tried to back people into a corner by saying all the cuts are going to be on the backs of the children. There's not one penny cut from the state Board of Education, the bureaucracy, it's all geared towards the kids. There was no leadership in this plan at all. No new ideas.

Bill Brady, Republican nominee for governor

''Today was an embarrassing day. He asked for an extra 30 days [to give his budget address], and yet the best he could come up with was a budget that was $4 billion out of balance, a budget that left our vendors holding $6 billion in unpaid bills."

[macrockett]

State Police would lose 500, Operation CeaseFire its funding
PUBLIC SAFETY | More than $31 million in cuts
Comments

March 11, 2010

SUN-TIMES STAFF

From the public safety section of the budget, Gov. Quinn proposed cutting:

• $25.3 million from the State Police, which will reduce the head count by 500 people in the agency through layoffs and attrition.

• $6.5 million in Operation CeaseFire grants, which would eliminate all state funding for the anti-violence program.

[macrockett]

www.chicagotribune.com/news/elections/ct-met-quinn-budget-speech-0311-20100310,0,4512692.story
chicagotribune.com
Raise taxes or cut education, Quinn says
Governor calls for ‘some difficult, painful choices’

By Ray Long, Monique Garcia and Bob Secter, Tribune reporters

9:32 PM CST, March 10, 2010

SPRINGFIELD

— Democratic Gov. Pat Quinn pitched a 33 percent income tax increase Wednesday, framing the debate as a choice between finding more money or hurting schoolchildren.

But the governor's challenge to lawmakers immediately ran into Republican criticism that Quinn is holding students hostage and into a Democratic dose of political reality.

"The people of America don't want tax increases. …They're hurting," said House Speaker Michael Madigan, D- Chicago, speaking on public television's " Illinois Lawmakers."

Madigan did not say whether he'll muster the Democratic votes required to approve a tax increase this spring, noting the Republican rallying cry against higher taxes before the November election. It was clear lawmakers from both parties do not feel bound by the choices Quinn is offering.

Democratic leaders who control the House and Senate are trying to finish business by early May so lawmakers can go home and campaign. That means the General Assembly could repeat last year's tactic of postponing hard decisions in the hope that a second straight year of relying on borrowing could get them safely through the election.

Quinn warned against that approach.

"It might seem easy to close our eyes, cross our fingers and kick the can down the road," Quinn said in his budget speech. "But we can't do that. The cost of doing nothing is too great. I have made some difficult, painful choices in this budget. You must make some tough choices as well."

Republican state Sen. Bill Brady, Quinn's rival in the governor's race, called Quinn's proposals a "catastrophe."

"We cannot increase taxes in this state," said Brady, of Bloomington. "All we're going to do is push more jobs out of the state."

During his speech, Quinn tried to pre-empt Brady's attack, lashing out at Brady's call for 10 percent across-the-board cuts as a budget solution.

"That approach is both heartless — and naive," Quinn said. "Taking a chainsaw to our state budget for schools, for health care, for human services and public safety is wrong."

Without taking action, the state faces a potential $13 billion shortfall in the budget year that begins July 1. Quinn formally presented a spending plan that relies on borrowing $4.7 billion, rolling over about $6 billion in backlogged bills and cutting about $2 billion.

Quinn wants to raise the individual income tax rate to 4 percent from the current 3 percent rate — a 33 percent increase. Corporations would see the rate go to 5.8 percent from 4.8 percent.

If approved, the state could raise more than $2.8 billion, with $1.3 billion to prevent Quinn's slashing of school funding, and the rest for paying down old bills, depending on how lawmakers divide the funds.

At a minimum, Quinn has made school funding a key issue this spring, thrusting powerful teacher unions into the debate as officials estimate 17,000 teachers could be laid off. The Illinois Federation of Teachers welcomed Quinn's call for a tax increase, but said it's not large enough to deal with the state's overall money problems.

The sweeping education cuts under Quinn's no-tax-hike proposal mean the state's minimum funding level per student would drop from its current level of $6,119 a year to $5,669 a year.

According to a legislative budget analysis, Quinn also suggested a $401 million decrease in grants ranging from transportation to special education, categories that represent a significant share of state funding for suburban school districts, particularly an important issue to Republicans.

Funding for bilingual programs would be cut by $20 million, and early education, a program highlighted by President Barack Obama, also would be cut by $54 million.

House Republican leader Tom Cross, of Oswego, accused Quinn of using "scare tactics" on educators and parents fearful that jobs, salaries and programs would be cut and force local officials to raise property taxes to make up the difference.

Cross gave no sign that he's dropping his longtime opposition to a tax increase, saying Quinn "is a fella and an individual and a politician that likes to hold people hostage. ... No one wants to see (school funding) decimated the way he's talking about. I would suggest to you at the end of the day this isn't going to happen."

"We're not going to be bullied into it," said Senate Republican leader Christine Radogno, of Lemont.

For months, Madigan has made it clear he wants some Republicans to support a tax increase, saying GOP lawmakers need to show a willingness to take the tough vote. GOP support also could provide Democrats with political cover in the fall election.

"I sincerely hope that every member is prepared to cooperate, every member is prepared to do some heavy lifting," Madigan said, referring to the upcoming budget negotiations. "I have my doubts."

Quinn budget chief David Vaught said the proposal is for a permanent tax increase. A Quinn budget office spokeswoman said the governor also would support a temporary tax hike if that's what legislators send him.

Senate President John Cullerton, D-Chicago, supported Quinn's tax plan but said the increase "doesn't have to be permanent."

Cullerton said he hoped to achieve substantial savings in the next budget and down the road from an effort to retool state employee pension plans.

The governor now finds himself in the difficult position of trying to sell complex financial concepts and solutions in a heated political environment that puts a premium on quick and easy-to-digest fixes.

Perhaps nothing illustrates that better than Quinn's rationale for seeking to borrow nearly $5 billion as part of the budget-balancing equation. The cash-starved state faces a multibillion-dollar pile of unpaid bills and is legally required to pay 12 percent interest to those owed.

So, the administration argument goes, the state actually saves money when it pays those bills on time using money it can borrow at a far lower interest rate. Such a maneuver, however, can be a tough political sell, with nuances often falling by the wayside.

"A family, a business, a government cannot borrow unless it's got a plan to pay it back," said Brady, not dwelling on the intricacies of Quinn's borrowing proposal. "In the financial markets, I'm not sure he could get a loan."

Quinn's campaign said Brady's budget solutions are both vague and an "economic vision for 1910, not for 2010."

Tribune reporter Michelle Manchir contributed to this report.

[macrockett]

www.chicagotribune.com/news/opinion/editorials/ct-edit-budget-20100310,0,5288972.story
chicagotribune.com
Not even close

6:02 PM CST, March 10, 2010

"We cannot afford to duck our responsibilities."

That's how Gov. Pat Quinn opened his budget address Wednesday. Then he ducked.

He posited that we can "sacrifice the future of a generation of children" or we can raise the state income tax rate by 33 percent. But he set out a budget that would hack at school funding or whack taxpayers and would still leave the state with a grossly unbalanced spending plan.

Quinn presented a sketchy budget that calls for $2.2 billion in spending cuts — $1.3 billion of it coming from education, most from elementary and secondary schools. That would mean roughly 17,000 teacher layoffs, he warned. He called his own proposal "wrong and short-sighted."

That's an apt description of his entire budget plan, for all sorts of reasons. It begins with a nearly $13 billion shortfall and includes only those $2.2 billion in cuts, for starters. It assumes the state will borrow another $4.7 billion to pay its bills. And even then the state would still be a deadbeat, delaying payments to most of its vendors.

Quinn ignored two huge opportunities to bring the state's spending in line with its means.

•Pension reform

Quinn's booking $300 million in savings on state employee pension obligations. That suggests Democratic leaders plan to pass an extremely modest tweak in pension benefits, and call it "reform." It will affect only people who are hired by the state in the future. If that's what the leaders do, that will be a sham.

Business leaders at the Civic Committee of the Commercial Club of Chicago have set out a broad proposal for pension reform for current and future employees that would save the state $2 billion a year. It wouldn't touch benefits for retirees, but it would set higher retirement ages and lower cost-of-living increases and other savings. That has to be done and everyone — everyone who relies on this state to teach their children and protect abused kids and lock up criminals — should demand it.

•Capital spending

The state has some $500 million a year targeted to pay the borrowing costs of its $31 billion roads-and-bridges plan. That money should be used to ease the budget crisis. Quinn doesn't want to touch the capital program — he says its essential to provide jobs in Illinois.

But remember, his budget slashes money for local schools. So he's going to bankroll temporary construction jobs while he gets teachers fired. We know Quinn and lawmakers are eager to take credit for public works projects. But this state is in crisis. It can't pay its bills. The governor's going to get teachers fired. The ribbon-cuttings have to wait.

Quinn could have found other savings. His political strategy is obvious. Focus the great majority of his spending cuts on education and count on worried parents — and angry teachers unions — to pressure lawmakers to pass his tax increase, his "surcharge for education." Quinn has never been a cynical guy, but this is a very cynical move.

If he was listening, he heard House Speaker Michael Madigan applaud his "courage" for proposing a tax increase — and then throw cold water all over it. "The people of Illinois don't want tax increases," Madigan said.

A few days ago, this page laid out $6.4 billion in spending cuts that could bring the state to balance in two years. They're heavy on pension reform. Education would take a far smaller hit than what Quinn has proposed. Our suggestions, many borrowed from the fiscal wizards at the Civic Federation of Chicago, the Civic Committee and Quinn's own Taxpayer Action Board, focus on correcting the structural problems that undermine efforts to get the state's spending in line with its income.

Quinn's budget barely touches on them.

In his speech, Quinn correctly noted that the state's fiscal mess was caused not just by the recession, but by decades of overspending. It has to stop.

The governor identified the problem. But he couldn't bring himself to propose a solution. He didn't come close.

Copyright © 2010, Chicago Tribune

[macrockett]

Dear Tribune, that is what $1.7 million buys. Lets see how much the Teachers union ponies up.

The reform proposed by Quinn amounts to needing a glass of water and getting a single drip from the faucet. $300 million/ $5 billion minimum = 6%

[EagleDad]

So I have a question here - doesn't the legislature, rather that the governor (one man) determine the state budget? If not, why do we bother electing representatives at all in Illinois.

Is Quinn's budget not just one proposal? Can the senators and representatives not just say "Thanks for the input there, tax-boy, we'll keep it in mind, now go back to your mansion and shut-up, so we can get to work".

Who elected this guy king to make these decisions? Hell, for that matter who even elected him Governor?

[macrockett]

Mar 11, 2010 13:08:05 GMT -6 EagleDad said:

So I have a question here - doesn't the legislature, rather that the governor (one man) determine the state budget? If not, why do we bother electing representatives at all in Illinois.

Is Quinn's budget not just one proposal? Can the senators and representatives not just say "Thanks for the input there, tax-boy, we'll keep it in mind, now go back to your mansion and shut-up, so we can get to work".

Who elected this guy king to make these decisions? Hell, for that matter who even elected him Governor?

Lol, he kind of fell into to job...I don't remember why.

As I recall, the Gov, like the President, creates a budget with his priorities and sends it to the legislators who adjust it, put in their own crap, etc., leaving in enough of what the Gov wants so he will sign it, they vote and pass it and send it to the Gov.

[macrockett]

www.chicagotribune.com/news/opinion/ct-oped-0316-byrne-20100316,0,4101072.column
chicagotribune.com
Battling the bulge: Here’s where to slash the budget

Dennis Byrne

March 16, 2010

Two weeks ago I suggested that climbing out of our financial sinkhole requires us to fundamentally downsize our expectations of what we can milk from government ("Champagne taste with a beer budget").

Reader Dienne posted a complaint: "I'm sorry, Mr. Byrne, perhaps I missed it, but I didn't see a solution in this column — was there one? If we're all supposed to ‘downsize our expectations' of the state government, which specific expectations are you willing to downsize?"

Fair question. Let's start with all the stuff that showers down on me as a senior citizen. End free transit rides. Make seniors pay full fare, except for those who can show a need. Let's get rid of all senior perks that aren't means tested; you don't "earn" them just by the fact of growing old.

While I'm at it, we might as well include in this cleansing the many boons provided by Washington. Medicare and Social Security: Their financial underpinnings will surely collapse without some sacrifice by their beneficiaries. And, please Mr. Obama, don't even think of adding to their costs by filling the "doughnut hole" in prescription coverage or handing out another $250 one-time payment to Social Security recipients.

I have no idea how much federal, state and local benefits for seniors cost taxpayers in total; no doubt, it's a lot. Even so, sacrifices by seniors alone will not reduce our public debt, which like the Blob in the immortal horror film, is expanding to consume everything, especially programs such as Medicaid, that the poor need most. Much more needs to be accomplished, particularly with the biggest single problem: public employee compensation.

The cost of public employee pensions is eating us alive. Just about every responsible suggestion for addressing Illinois' budget calamity starts with calming the pension storm. At least go to a two-tiered system in which benefits for existing retirees are preserved, but benefits for new employees are made more reasonable.

But it's not just the pensions; Public employees generally are paid more than the people who pay them — the taxpayers. From the federal Bureau of Labor Statistics, "Employer Costs for Employee Compensation, December 2009": Total compensation costs for private employees was $27.42 hourly, but for state and local employees, $39.60 — 44 percent higher. State and local employees did better than their private-sector counterparts in wages and salaries, total benefits, paid leave, insurance, retirement and savings and legally required benefits, according to the report.

From the BLS' "Employee Benefits in the United States, March 2009":

• Medical care benefits were available to 88 percent of state and local government workers, but only to 71 percent of private industry workers. About half of private industry workers participated in a plan, compared with 73 percent of state and local government workers.

• Among full-time state and local government workers, 99 percent had access to retirement and medical care benefits. Of full-time workers in private industry, only 76 percent had access to retirement benefits and 86 percent to medical care.

• Employers' share of medical coverage for singles was 90 percent for state and local workers, but 80 percent for private-sector workers.

• Nearly 90 percent of state and local government workers had access to paid sick leave, compared with 60 percent of private industry workers.

The bureau issues certain cautions about comparing the two sectors. But the point is clear: The idea that public employees generally are paid less in wages and benefits than private-sector employees is mostly a myth. But some public employee unions don't get the point that all of us need to sacrifice. They're willing to throw their own less senior members overboard to preserve not just their existing wage and benefit levels, but to increase them.

I'm spotlighting public-sector labor costs because that's where most of the resistance to a solution arises. There are only a few ways out of the state's mess: cuts in services and personnel costs, increased borrowing and higher taxes. The state of Illinois has sunk so low I frankly don't know that doing all of them simultaneously would solve the problem in our lifetimes.

So, where to start? I go back to my original premise: All of us need to lower our expectations. There's no more blood left in this corpse.

Dennis Byrne is a Chicago-area writer and consultant. He blogs at ChicagoNow.com/byrne.

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