Illinois state budget (2011-2012)

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See also: Archived Illinois state budgets

As of November 2011, Illinois had a backlog of unpaid bills totaling $3.5 billion.[1]

The state ended FY 2012 with a deficit of $8.3 billion, according to a September 26, 2011, study by The Civic Foundation. Its study noted that although the state reduced spending, any benefits were negated by higher pension costs and increased borrowing costs. If nothing was done before the end of the fiscal year in June 2012, the deficit would break down to $5.5 billion in unpaid bills from companies that provided services, $1.2 billion in Medicaid payments the state would push off until FY 2013, and $1.6 billion owed to companies for tax returns and health insurance bills for state employees.[2]

Special Legislative Session

A special session of the Illinois General Assembly adjourned after the Illinois House of Representatives rejected a tax relief plan for businesses but approved a budget deal to avoid closing seven state facilities and laying off approximately 1,900 employees. That legislation shifted money in the budget but kept overall spending at the same level.[3] Governor Pat Quinn signed the deal into law on December 19, 2011.[4]

Gov. Quinn initially announced plans to layoff thousands of state employees in September 2011 and close several state facilities, which he said was required to prevent the state from running out of money in spring 2012.[5] Quinn backed away from that plan and on November 10, 2011, introduced a new plan that would close six facilities, but no prisons, over two and a half years and reduce by 600 the number of developmentally disabled clients served in state-run facilities by 2014, allowing the state to close up to four of its eight developmental centers. It also called for the closing of two psychiatric hospitals by 2014.[6] The issue was moot after the new legislation in November.[3]

Also in the November special session, the legislature passed a bill to curtail abuses of public pension systems by ending double dipping for employees getting simultaneous credit from union pension systems and public systems, and also prohibiting employees from earning pension credit while on leave working for unions.[3]

Passing the budget

Gov. Pat Quinn signed the state's FY 2012 budget on June 30, 2011, with the general fund totaling $32.98 billion after the governor vetoed $376 million in spending approved by the legislature and eliminated what he said were $336 million in redundant appropriations.[7] The governor's cuts upon signing the budget included $250 million in Medicaid reimbursements, which were intended to force legislators to restructure the program. The state's budget director explained that cuts wouldn't save the state money but would actually just stall paying hospitals until next year.[8] The spending plan emerged as the result of efforts by Democratic House Speaker Michael Madigan and Republican House Minority Leader Tom Cross that produced a $33.2 billion budget that was $2 billion less than what Quinn wanted and $1 billion less than the Senate put forth.[9]

The legislature approved the budget at the end of May, using conservative revenue estimates that the House declared was the amount of tax money the state could expect to collect in FY 2012. Though Senate Democrats believe the state would collect more money than that, Senate President John Cullerton said the Senate decided to accept the House-drafted budget rather than risk a protracted overtime session.[10] One month after signing the budget, the governor explained that he knew that there were insufficient funds to operate state government for the year but that he signed it anyway to prevent Republicans from seeking even deeper cuts.[11] On June 27, 2011, Gov. Quinn said, "The budget is an on-going process. We have to work on it 365 days of the fiscal year."[12]

The state's FY 2012 Operating Budget can be found here. Illinois' Capital Budget for FY 2012 can be found here.

In April 2011, lawmakers passed legislation providing $7.8 billion for required state contributions to employee pensions and to pay back some of the funds the state borrowed by selling bonds. Cullerton said that with that legislation, the state would have approximately $26.5 billion left, about $1.2 billion less than the spending proposed by the governor. Republicans criticized the passage of a large piece of the budget prior to determining where to make cuts.[13]

The governor signed an agreement with the American Federation of State, County and Municipal Employees union to not lay off employees or close facilities before June 30, 2012, the end of AFSCME’s current state contract, but in June 2011, the governor's spokesperson said that there was not enough money in the budget to fund all salaries for fiscal year 2012.[10] Unions sued the state and on July 19, 2011, an arbitrator ruled that the governor's refusal to give raises violated the union contract. He ordered the governor to start paying the two percent increase and provide back pay within 30 days. The governor said he planned to appeal, and a judge granted the Democratic governor’s request to hold off on paying the raises pending that appeal.[14][15]

Budget highlights

To help raise revenue in Illinois, state lawmakers expanded gambling throughout the state. The bill licensed four new casinos and authorized slot machines at both O’Hare and Midway airports, as well as at local horse racing tracks. Proponents said it would bring the state more than a billion dollars through licensing fees and subsequent tax revenue, as well as create thousands of jobs. Bill supporters said the additional gaming would deliver $500 million annually for education, public safety, and infrastructure. Though detractors said the revenues were not sustaining and did not keep up with yearly inflation. Illinois tax revenues from casinos fell six percent during the past decade, from $410 million in 2000 to $384 million last year.[16]

Quinn called the expansion of gambling "excessive." Quinn embraced the notion of a casino in the city of Chicago, but said the expansive bill handed to him was more than the people of Illinois wanted to see.[17]

The budget passed by the legislature in the waning hours of the session was higher than FY 2011’s budget and was balanced by delaying the payment of billions of dollars in unpaid bills. In the proposed budget, lawmakers included funds to pay for pensions, but did not reduce the $4 billion in old bills on the desk of the Illinois Comptroller. Instead, the state would take longer to pay those bills, including Medicaid payments.[18] The $33.2 billion spending plan was about $2 billion less than what Democratic Gov. Pat Quinn wanted. Spending less was on the minds of many lawmakers after they approved a 67 percent increase in the income tax rate in January that was billed as mostly temporary.

Some of the changes sent to the governor's desk included:[19]

  • Approximately $200 million statewide cut from education spending
  • 50 percent funding for Illinois Rx, a program Quinn wanted to eliminate
  • Cutting down the number of poor people using emergency rooms for minor issues by having the state charge a co-pay of $10 — twice the regular rate — for going to emergency rooms for non-emergencies
  • Cutting in half the amount of interest the state offers when it falls behind in paying hospitals, doctors and other health care providers. Instead of two percent a month starting after 60 days, the interest rate would be one percent starting after 90 days for late payments.
  • Saving $16 million annually by no longer picking up the costs of over-the-counter drugs, such as allergy medicine, cough syrup or painkillers, prescribed for Medicaid patients.

The budget sections that took the biggest hit were education and human services. The Department of Human Services lost more than $669 million, or 17.3 percent and education spending declined $171 million, or 2.4 percent. Early childhood education lost $17 million. Mentoring for teachers and administrators were eliminated entirely. Special education for orphans took an $18 million cut. The state's main contribution to schools and general state aid dropped more than $152 million, or 3.3 percent.[20]

Schools

After back-to-back years of delayed payments and bill backlogs, local educators doubted that they would collect the money on time that, on paper, they would be due in the coming year. The state owed school districts $981 million in unpaid bills, according to the state comptroller's office.[21]

Illinois' education chief says the state hadn't provided enough money to institute a new education reform law that had been praised nationwide. State education officials said budget cuts hurt efforts to move reforms forward, including cutting a model for performance evaluations and mentoring programs.[22]

Education spending

Illinois consistently devotes approximately 27 to 28 percent of total spending to K-12 education.[23]

Fiscal Year Total Spending[24] Education Spending[25] Percent Education Spending
2009 $123.1 billion $35.3 billion 28.6%
2010 $129.7 billion $35.5 billion 27.3%
2011 $127.7 billion $35.2 billion 27.5%
2012 $125.4 billion $35.6 billion 28.3%

Pension Payment

For the first time in two years, the General Assembly agreed to pay into its Illinois public pensions and approved a plan to pay $4.5 billion in FY 2012.[26]

Medicaid

Lawmakers balanced the 2012 state budget by dragging out Medicaid payments. Quinn’s order to cut Medicaid spending increased the payment cycle again, to another 162 days. Illinois hospitals had been getting paid every 30 days because of the federal stimulus, but that stimulus expired July 1, 2011.[27]

The state notified all 211,000 participants in the Illinois Cares Rx program that they either would pay more for their drugs beginning September 1, 2011 or would be terminated from the program. DHFS expected 40,000 to 45,000 participants to lose their Illinois Cares Rx aid.[28] The changes meant a single person could not make more than $21,780 a year to qualify, down from $27,610. The base income for a two-person household went from $36,635 to $29,420. For those still participating, generic drug co-pays rose to $5 from $2.50 and brand-name prescriptions rose to $15 from $6.30.[29]

U.S. Sen. Mark Kirk told WLS news that Illinois' bipartisan legislation meant to test Medicaid recipients was overridden by the federal government. The legislation would have made it possible to ensure Medicaid recipients lived in Illinois and were low income. The legislation, designed to strengthen Medicaid's finances by cutting fraud and decreasing costs, would have saved the state millions. About 2.5 million Illinois residents were on Medicaid at the time.[30]

Money Owed and State Debt

Some lawmakers, including Gov. Quinn, supported a plan to issue bonds to raise up to $8 million to pay off the state's bills. That proposal failed. Without the bonds, the $8 billion of FY 2011 bills and obligations had to be paid off by the end of December 2011 with FY 2012 revenue, exacerbating the state's structural deficit.[31]

Illinois' widening structural deficit, huge unfunded pension liability, inability to pay its bills on time, cascading bond ratings and propensity to borrow its way out of financial problems made the state a major worry in the $2.9 trillion U.S. municipal bond market. Money raised through a new income tax hike passed in January 2011 was absorbed by Medicaid and the state's pension plans. It was not able to help pay the state's debts.[32]

The comptroller's office said that it takes the state 118 days to pay a bill, as of June 2011. As of September 2011, the state had 166,000 outstanding bills of approximately $5 billion.[33] Nearly half of that amount was more than a month overdue, according to an Associated Press analysis of state documents. Hundreds of bills dated back to 2010 and the actual amount owed was likely higher because some bills were still in the pipeline. The unpaid bills ranged from a few pennies to nearly $25 million.[34]

The Chicago-based Civic Federation in 2012 warned that the state government’s $9.2 billion backlog of unpaid bills would reach an unprecedented $34.8 billion by 2017 without immediate action by Gov. Pat Quinn and state lawmakers.[35]

The Civic Federation made several suggestions for addressing the issue:[35]

  • “Aggressive implementation” of a Medicaid reform package that passed in January 2011. The program was designed in part to boost the use of managed care and lessen reliance on institutional care for the elderly and disabled.
  • The elimination of Illinois Cares Rx, a prescription care program for the needy launched under former Gov. Rod Blagojevich that is not eligible for federal reimbursement.
  • Curtailing pension benefits for existing state retirees by limiting benefit increases to 3 percent a year or one-half the rate of inflation, whichever is less. That constitutionally questionable maneuver would extend 2010 pension reforms that imposed identical limits on workers hired after Jan. 1, 2011.

A look at a state ledger provided by the Illinois Comptroller's Office showed roughly $67 million in overdue bills primarily from businesses as of early September 2011. The late tab for cars and gasoline was $2.7 million. Auditing and management services were owed $4.5 million. Computer software cost $2.7 million.[36]

The Department of Healthcare and Family Services was so short of money that it wasn't even sending bills to the comptroller's office where they would be added to the state's vast backlog. Spokesman Mike Claffey said the department had about $1.9 billion worth of unpaid bills it hasn't submitted to the comptroller. Claffey said recently the state owed a total $1.2 billion to its insurance vendors for premium payments and to the medical providers that care for state employees and retirees enrolled in self-funded group health plans. Payments were typically running six or seven months behind, he said.[37]

Illinois ranked first nationwide when it came to nonprofit groups reporting late payments from the government, according to a survey last year by the nonpartisan Urban Institute. More than 80 percent of Illinois groups said their money didn't come on time. An analysis of state data by the Associated Press found that the backlog wasn't as dire for human services as for other parts of state government, but it still amounted to more than 31,000 bills totaling $425 million. The Department of Human Services, for instance, had $105.4 million in bills that were more than a month old as of early September 2011. They ranged from grants to nonprofit groups to food to burial expenses.[38]

Charity Funds

With Illinois' finances in shambles, the state was temporarily using tax dollars designated to support charities to pay off its bills. In all, state officials borrowed $1.176 million in fiscal year 2011 from 11 tax checkoff funds, according to figures provided by the Office of Management and Budget, on top of $434,000 that was "swept," or taken permanently, from seven funds in fiscal year 2010, part of a much broader emergency funds sweep approved by the General Assembly to address a huge budget gap.[39] The borrowing was done in stages during fiscal year 2011, which ended June 30, 2011, as state budget analysts needed to pay a backlog of bills to hospitals and other vendors. The earlier fund sweeps were approved in June 2010, the end of that fiscal year.

The Dead

The Illinois budget was so tight the state could no longer afford to pay for the burial of poor people reliant on public aid. State officials said the financial burden would fall to county governments. Until July 1, 2011, the Illinois Department of Human Services had a budget of $12.6 million for indigent burials. The fund paid about $1,650 per deceased person – $1,103 for a funeral and $552 for a burial – to be handled by a private funeral home, which would later be reimbursed. Last year, about 12,000 such cases were funded statewide.[40]

Governor's Refusal to Pay Employees Raises

With the tight budget Illinois did not have enough money to pay all employee salaries. Gov. Quinn signed an agreement with the American Federation of State, County and Municipal Employees union to not lay off employees or close facilities before June 30, 2012, the end of AFSCME's current state contract.[41]

Gov. Quinn canceled raises for 33,0000 of state employees that were to take effect on July 1, 2011.[42] The administration notified 14 state agencies and employee unions that the two percent raises wouldn't be paid as required by contract because lawmakers did not include enough money in the new state budget.[43] Quinn and AFSCME reached a deal the previous year that barred the state from laying off employees or closing government facilities. In exchange, AFSCME agreed to come up with at least $50 million in cost-cutting and delay raises. Originally, AFSCME workers were to get four percent increases July 1, 2011, but the union agreed to give up months' worth of additional pay by taking a two percent raise on July 1, 2011, and the other two percent in February 2012. Another raise, of 1.25 percent, was scheduled for January.[44]

Quinn's office said the agencies that couldn't afford the promised raises included Corrections, Human Services, Natural Resources and Public Health. Canceling the raises affected nearly 30,000 employees and saved the state more than $75 million.[45] The American Federation of State, County and Municipal Employees filed a lawsuit over the blocked raises on July 8, 2011.[46] The unions said the pay freezes were not reasonable or necessary to achieve an important public purpose.[47]

Quinn said he was prepared to defend his decision to cancel pay raises in court, explaining that he was following the law by not issuing the pay hikes, because lawmakers failed to set aside enough money to fund the increases and also maintain government functions for a full year.[48][42] Some lawmakers said Quinn's actions were not legal and that he was bound to lose in court.[49]

A decision was still pending in circuit court as of October 2011. A federal judge sided with Quinn, arguing the state’s budget crisis was so dire that denying the pay hikes was “a legitimate governmental interest.”[50]

Budget Criticisms

Through the budget process lawmakers claimed they made tough choices and "cut to the bone." However, in a budget analysis, the Illinois Policy Institute pointed out the following fluff left in the budget:[51]

  • $4,037,500 for the Upward Mobility Program: Available only to state employees who are union members, the Upward Mobility Program pays 100 percent of tuition costs at public institutions and a set amount per credit hour at select private universities.
  • $1,057,500 for state fairs: Texas has a privately-run state fair that operates without government subsidies.
  • $4,214,400 for grants to arts organizations
  • $365,400 for the Urban Fishing Program: The program provides free summer fishing clinics at stocked ponds and other fishing outreach events
  • $2,615,600 for the Sparta World Shooting and Recreation Complex: The complex was completed in 2006 at a construction cost of $31.5 million.
  • $23,836,900 for tourism promotion: Tourism grants have included $29,550 for a Lois Lane statue in Metropolis and $200,000 for Fashion Focus Chicago 2009
  • $1,267,685 for the Internship Program: Participants in the governor's and Vito Marzullo's internship programs receive $31,332 annually and full state benefits
  • $243,800 for the Foster Grandparent Program
  • $1,640,000 for the Diversifying Higher Education Faculty in Illinois Program: This program provides higher education financial assistance for "traditionally underrepresented groups."
  • $9 million for the Renewable Energy Resources Program and the Illinois Renewable Fuels Development Program: This includes $450,000 for the University of Illinois to "implement the Biogas and Biomass to Energy program," and $13,358 to the Phi Kappa Theta fraternity house at Northern Illinois University for a solar thermal energy system to "increase the utilization of alternative energy technology in Illinois."

People for the Ethical Treatment of Animals also took issue with the state's Urban Fishing Program. In a letter to Gov. Quinn, PETA chided the state for funding the program during tight economic times, as well as calling it a program that teaches children to "injure and torment defenseless animals."[52]

Another criticism the budget and the state of Illinois' financial crisis received, even before the 2012 budget was signed, was for a shortage in prison-issued underwear. Prisoners at the Taylorville Correctional Center complained about having to wear dirty underwear and socks for at least half the week, according to a recent report by the John Howard Association, which blamed state budget cuts and overcrowding at prisons. Inmates also said the boxers they received from the prison often had stains and holes, the report said.[53]

On June 27, the Peoria Journal Star reported that the state owed some $620 million in income tax refunds dating back to 2009 to businesses, and the Illinois Department of Revenue announced that "there is not enough money in the Income Tax Refund Fund" to pay the over 7,500 businesses still owed those funds.[54]

During an interview with Fox News, Rutherford said despite the financial woes of Illinois, the federal government should not help balance the state's budget. Rutherford also criticized the income tax hikes passed in January.[55]

The Daily Herald's tax watchdog reported paying for lawmakers' mileage costs the state $1.7 million a year. That's on top of the $13.1 million taxpayers spent on salaries and leadership stipends for those same legislators. The average salary is $74,185, including leadership stipends that nearly three-quarters of the legislature gets. Combined with the average annual reimbursement of $9,292, Illinois legislators' average pay is $83,477. Only lawmakers in California, New York and Pennsylvania make more on average than Illinois legislators. The median household income in Illinois is $53,966, according to the U.S. Census Bureau.[56]

State's Credit Rating

Illinois, which borrowed to make its two most recent annual pension payments, was the lowest-rated state in Moody’s estimation, at A1.[57] Standard & Poor’s has it at A.[58]

In January 2012 Moody's lowered Illinois' rating to A2 from A1. The downgrade to the sixth-highest rating came after a legislative session that “took no steps to implement lasting solutions to its severe pension under-funding or to its chronic bill payment delays,” Moody’s said in a report. Illinois, it said, has “weak management practices.” Moody’s revised its outlook on the debt to stable from negative, citing the state’s sovereign power over revenue and spending, and laws that establish the priority of payment for general-obligation bonds. The downgrade affected $32 billion of debt, according to the statement.[59] "The downgrade reflects the state's weak pension funding levels and lack of action on reform measures intended to improve funding levels and diminish cost pressures associated with annual contributions," said Standard & Poor's credit analyst Robin Prunty in a statement.[60]

In August 2012 Standard & Poor's Ratings Services lowered Illinois' rating from A+ to A because of "weak pension funding levels and lack of action on reform measures." The firm also said the financial outlook for Illinois was negative, in part because the state's temporary income tax was scheduled to expire in 2015.[61]

Illinois' credit standing took another tumble as Standard & Poor's Ratings Services downgraded the state by to A- in January 2013 and raised the possibility it could fall further. S&P placed a negative outlook on the lower rating, saying legislative consensus and action would be needed to tackle challenges, including the state's huge unfunded public pension liability.[62]

Budget Panel

Enacted in 2010 by the General Assembly, Budgeting for Results is a tool to help government agencies set priorities, meet goals, and deliver excellent services and achieve the best value possible to taxpayers. For the fiscal year 2012 budget, the first year of BFR, agencies and departments were required to justify budget requests based on results achieved in the following priority areas set by the Governor:[63]

  • Quality education and opportunities for growth and learning for all Illinois students;
  • Enhanced economic well-Being of citizens;
  • Protection of citizens’ lives and property;
  • Protection of the most vulnerable of our citizens;
  • Improved quality of life of citizens; and
  • Improved efficiency and stability of state government.

Tax Burden

A new report by Truth in Accounting indicated each taxpayer’s financial burden was $26,800. According to the report Illinois had $55 billion worth of assets (defined as both financial assets, and also including state parks, for example), but less than $19.6 billion was available to pay $130.2 billion of bills as they came due. In addition to not including pension obligations tied to current compensation in the annual budget, the report condemned Illinois because, according to the report: “Illinois habitually delays issuing its year-end financial report until after the next fiscal year’s budget process has been completed. That prevents citizens and public officials from having important information, leading to less-than-optimal public policy decisions.”[64]

As the 2012 election cycle began in Illinois, Republican candidates used the state's economy as a talking point for leadership change, with statewide officer holders criticizing Quinn's proposals for borrowing money.[65]

Proposed Budgets

Governor's Proposed Budget

In his budget address on Feb. 16, 2011, Governor Quinn asked the state legislature to consider borrowing $8.7 billion dollars to pay the state's bills.[66][67] The borrowing is a key part of the governor's $35.4 billion budget proposal.[68]

To pay off bills owed to schools, state vendors and other providers, Quinn proposed borrowing billions of dollars. Initially Quinn wanted to borrow $8.75 billion, but reduced that number to $2 billion, primarily due to lack of support in the legislature. Quinn wanted to use the funds to pay off health care providers before July 1, 2011, when the reimbursement rate from the federal government would drop and Illinois would lose out on millions of dollars.[69] Any borrowing proposal would need three-fifths support in the legislature.

The remaining $6 billion in the borrowing plan would pay down other state bills. This amount would be repaid over 14 years, the loan term originally proposed for the entire package. Of that money, $2.76 billion would go to pay what the state owes to schools, universities, community colleges, and local governments; $1.48 billion would be used for non-government service providers; $1.134 billion for health care providers; and $800 million for corporate income tax refunds. A super-majority or a three-fifths legislative majority in both chambers was required for passage because the bills would increase the state’s bond limit.[70] The House placed the revenue estimate next year at about $33.3 billion, while the Senate determined it would be about $34.3 billion. The Senate said its number was based on estimates produced by the General Assembly’s Commission on Government Forecasting and Accountability.[71]

Treasurer Dan Rutherford strongly opposed the borrowing plan. Illinois's state-backed debt had risen to $45 billion from $12 billion in 2002, with 58 percent to cover payments to pension plans, Rutherford said. With a budget calling for spending $2.4 billion more than the state expected to collect the following year, the state would create another backlog, he said. Rutherford said the state was being penalized in the bond market because of its inability to manage its budget and debt. He said the state had higher borrowing costs than other states. Illinois, which had borrowed to make its two most recent annual pension payments, was tied with California as the lowest-rated in the estimation of Moody's Investors Service at A1. Standard & Poor's had it at A+, one level above California.[72]

Rutherford called for freezing state spending and ending borrowing. He said: “Illinois borrowed another $3.7 billion in April 2011 to partially fund a pension payment; because of the state’s low credit rating, taxpayers will have to repay $1.279 billion in interest; that dollar amount is 17 percent more than Kentucky, 34 percent more than Michigan and 41 percent more than Washington which all issued similar bonds this year.”[73]

Cuts

The governor proposed doing away with Illinois Cares Rx, which cost $107 million, and lowering the Medicaid reimbursement rates by six percent, saving $552 million.[68]

Although under the governor's proposal state funding for education would rise by $231 million, the governor noted that savings could be found with the consolidation of school districts, which would lower administration costs.[67] The governor also announced that all drug and alcohol abuse programs would no longer receive state funding.[68][74]

Pensions

In the governor's proposed budget, the options for “significant long-term improvements” in its five pension systems included “seeking a federal guarantee of the debt," as well as curtailing public employee retirement benefits, borrowing more and increasing annual state pension contributions were identified as other choices.[75] U.S. Rep Peter Roskam said that there was no chance of the federal bailout of the state pension system.[75]

Legislative Budget Proposal

Illinois Senate Democrats accepted House revenue projects and crafted a 2011-12 budget that cut nearly $1 billion from the Senate’s earlier spending plan. The House placed the revenue estimate next year at about $33.3 billion while the Senate determined it would be about $34.3 billion. The Senate said its number was based on estimates produced by the General Assembly’s Commission on Government Forecasting and Accountability.[76]

House Proposal

On May 13, 2011, the House approved a $25.2 billion budget for FY 2012 which spent $600 million, or 2.4 percent, less than the previous year's budget. Under the plan, schools would receive $169 million, or 2.4 percent, less. The Monetary Award Program would lose $17 million for college scholarships, a 4.2 percent cut. In human services, Medicaid bills would be paid more slowly, many would be trimmed 1 percent and administrative spending would drop $181 million.[77]

The House version of the budget was roughly $1 billion smaller than the version approved by the Senate and $2 billion below the governor's proposal.[77]

Illinois House leaders reached a bipartisan budget agreement, but it was unclear if the House would be able to reach agreement with the Senate.[78] House leaders were backing a budget proposal that spent $200 million less on education. Gov. Quinn proposed to increase education spending by $200 million. Overall, education funding would be cut by as much as $600 million under the House plan if the federal government did not renew up to $400 million in special stimulus funds that helped counter the effects of the recession.[79] Quinn is not happy with the proposed cuts to education. He said cuts to education are an "alarm bell" because it's important to have a well-funded education system.[80]

The two chambers did not agree on revenue projects, with the House’s projecting $33.2 billion in revenue and the Senate making a $34.3 billion projection.[81] House leaders adopted a resolution that any additional revenue will be used to pay the state's outstanding bills.

Senate Proposal

Senate Democrats passed parts of a budget on May 4, 2011. Although they did not release a summary of their plan except to say that when their entire budget package was assembled, they would have cut $1.2 billion from the budget plan introduced by Gov. Pat Quinn. The plan relied on revenue projections rejected by both the governor and the Democratic House. The budget bills passed covered spending for the Departments of Revenue, Natural Resources, State Police, Labor and a number of smaller commissions.[82] They did not address funding for prisons, welfare or education.[83]

Senate Republicans initially introduced a plan to reduce spending by $6.7 billion, saying that would be more than enough to let Illinois reverse the new income tax increase and make progress on paying its overdue bills. They renewed their call to cut health care costs and slash retirement benefits for government employees, even if it required a constitutional amendment.[84] The proposed cuts included increasing healthcare premiums for state employees to save $300 million annually, saving $9 million by reducing the number of government provided cars and eliminating $2.3 million by reducing the number of state provided cell phones. The plan also included proposals to combine the office of state treasurer and comptroller for an annual savings of $12 million and eliminate funding for the office of lieutenant governor.[85] The plan also targeted $1.3 billion in cuts to Medicaid, including reducing eligibility to certain programs like All-Kids. Other ways of achieving Medicaid reform included increasing co-pays, rolling back eligibility and eliminating optional services not required by the federal government. The plan also called for implementing a Medicaid audit to eliminate fraud. Sen. Kirk Dillard said studies showed up to 10 percent of Medicaid payments were fraudulent. He said recapturing that 10 percent would amount to $1 billion. However, he said a more realistic outlook was recapturing 2.5 percent, which would amount to $250 million in savings.[86]

The Republican Senate caucus criticized the hiking of personal and corporate income tax levels in Jan. 2011, which was expected to raise about $7 billion in new revenue. The GOP leaders said even with a hike, they still had to look at cutting spending.[87]

After a working weekend over the 2011 Memorial Day weekend, the Illinois Senate on Monday added $431 million to the Illinois House’s proposed budget. The biggest portion — $151 million — funded elementary and high schools statewide. Another large portion — $49.3 million — went to mental health grants and programs.[88] The additions would be paid for with money from the general revenue fund, the state’s biggest pot of money. The Senate estimated the state would deposit $34.3 billion into the fund during the next fiscal year in tax revenue, including the income and sales tax.

Originally, the Senate passed a $34.3 billion budget, $1.1 billion more than the House’s version. Senate Democrats passed the House’s budget despite Republican opposition. The spending plan, approved by both chambers, was not small enough to pay off the state's debt quickly enough to allow a temporary income tax increase to expire in 2014, according to Senate Republicans. The budget was smaller than Quinn's original proposal of $35.4 billion. The governor could have signed the budget into law, veto the entire budget or change individual lines of spending.[89]

According to Senate President John Cullerton's office, the plan fully funded pension systems.[90]

Cullerton made no apologies during an interview last week for the way his caucus sought to hold the state’s public works bill hostage by tacking on $430 million in additional budget items.[91]

References

  1. Illinois Statehouse News "Illinois needs $1 billion more for FY13 budget" Nov. 21, 2011
  2. The Chicago Tribune "Illinois budget deficit to hit $8 billion despite tax increase" Sept. 26, 2011
  3. 3.0 3.1 3.2 Businessweek "Ill. Legislature adjourns as tax package stalls" Nov. 29, 2011
  4. The Chicago Tribune "Quinn signs law averting layoffs" Dec. 20, 2011
  5. The Chicago Tribune "Quinn plans layoffs, facility closings" Sept. 6, 2011
  6. Businessweek "Illinois lawmakers reject Quinn's closure plans" Nov. 10, 2011
  7. Reuters "Illinois governor signs budget but state's problems mount" June 30, 2011
  8. WBEZ.com "State cuts to Medicaid meant to force a restructure to the program" July 5, 2011
  9. The Chicago Tribune "Lawmakers continue to cut despite major income tax increase" June , 2011
  10. 10.0 10.1 The State Journal-Register "Employee salary shortfall looms in state budget" June 27, 2011
  11. The Chicago Tribune "Quinn signed state budget to avoid deeper cuts by Republicans" July 25, 2011 (dead link)
  12. The Kane County Chronicle "Quinn to sign state budget Thursday" June 27, 2011
  13. Businessweek "Ill. lawmakers OK money for debt, pension payments" April 15, 2011
  14. Forbes "Arbitrator: Ill. gov. must give workers pay raises" July, 2011 (dead link)
  15. The Washington Post "Judge temporarily halts union raises for Illinois state workers after governor appeals" July 22, 2011
  16. Christian Science Monitor, Illinois' new solution to huge budget crisis - gambling, June 1, 2011
  17. Chicago Sun Times, Quinn Calls Gambling Expansion Plan Excessive, Criticizes Budget Cuts, June 1, 2011
  18. State House News, Illinois Budget Spends Less, but Doesn't Cut More, May 31, 2011
  19. Chicago Tribune, Education, social services are big losers in state budget, June 1, 2011
  20. Business Week, Proposed Ill. budget hits human services, schools, June 3, 2011
  21. Chicago Tribune, Budget would cut $171 million from public schools, June 1, 2011
  22. WBEZ, State schools chief says budget cuts hurt reform , July 18, 2011
  23. State Budget Solutions "Throwing Money At Education Isn't Working" Sept. 12, 2012
  24. USGovernmentSpending.com "Illinois Government Spending Chart - Total Spending" Aug. 4, 2012
  25. http://www.usgovernmentspending.com/spending_chart_1997_2017ALb_13s1li111mcn_20t USGovernmentSpending.com "Illinois Government Spending Chart - Education Spending"Aug. 4, 2012
  26. Illinois Statehouse News"Pensions to be paid without borrowing, first time in two years" April 19, 2011
  27. StateHouse News, Quinn's Medicaid reduction means 5 months payment delay, July 7, 2011
  28. Press Mentor, Illinois Cares Rx participants being notified of cutbacks, July 15, 2011
  29. Chicago Tribune, Ill. budget cuts reduce seniors' drug benefits, July 15, 2011 (dead link)
  30. Kirk: Feds override means-testing Illinois Medicaid recipients, July 18, 2011
  31. Reuters, Illinois on track to end fiscal year owing $8 billion, June 2, 2011
  32. Reuters, Illinois on track to end fiscal year owing $8 billion, June 2, 2011
  33. The Chicago Sun-Times "Deadbeat Illinois owes billions" Oct. 16, 2011
  34. Chicago Sun Times, Deadbeat Illinois Owes Billions, Oct.17, 2011
  35. 35.0 35.1 "State action urged to stop pension debt from ballooning," Chicago Sun-TImes, January 30, 2012
  36. Jacksonville Journal Courier, Deadbeat Illinois: Unpaid bills undercut state's business partners, Oct. 17, 2011 (dead link)
  37. St. Louis Today, Official numbers hide true health care backlog, Oct. 17, 2011 (dead link)
  38. CBS Moneywatch, Nonprofits bear burden of Illinois' unpaid bills, Oct. 17, 2011
  39. News Gazette, State takes money designated for charities, repays some of it, June 26, 2011
  40. Austin Talks, The money is gone for burying Illinois’ poor, Aug. 17, 2011
  41. State Journal Register, Employee salary shortfall looms in state budget, June 27, 2011
  42. 42.0 42.1 The Chicago Tribune "State worker unions protest blocked raises" July 12, 2011
  43. Victoria Advocate, Ill. governor plans to skip $77 million in raises, July 4, 2011 (dead link)
  44. Contra Costa Times, Ill. governor plans to skip $75 million in raises, July 6, 2011 (dead link)
  45. Victoria Advocate, Ill. governor plans to skip $77 million in raises, July 4, 2011 (dead link)
  46. All Headline News, Illinois public workers file lawsuit to stop salary freeze. July 11, 2011
  47. Courthouse New, Unions Fight Pay Freeze in Illinois, July 14, 2011
  48. Forbes, Quinn: Ready for Lawsuits, July 6, 2011 (dead link)
  49. State House News, Lawmakers: Court challenges overrides likely for Quinn budget, July 6, 2011
  50. The Chicago Tribune "Arbitrator rules against Quinn on layoffs, closures" Oct. 3, 2011
  51. BND, So much for 'necessary services', June 13, 2011 (dead link)
  52. PETA, It's Time to Cast the Cruel and Wasteful $365,000 'Urban Fishing' Program Out of the Busted Budget, June 13, 2011
  53. NY Times, http://www.nytimes.com/2011/06/30/us/30brfs-Prison.html, June 29, 2011
  54. Huffington Post, Underwear Shortage In Illinois Prisons: Latest Sign Of State's Financial Woes , June 29, 2011
  55. Fox News, Illinois State treasurer on budget mess, July 6, 2011
  56. Daily Herald, You paid $1.7 million for legislators' mileage, daily allowance, Aug. 10, 2011
  57. San Francisco Chronicle "Illinois Becomes Moody's Lowest-Rated State After Downgrade" Jan. 9, 2012
  58. Chicago Tribune "S&P lowers Illinois credit rating over pensions" Aug. 29, 2012
  59. Bloomberg, Illinois Becomes Moody’s Lowest-Rated U.S. State With Debt Downgrade to A2, Jan. 6, 2012
  60. Chicago Tribune "S&P lowers Illinois credit rating over pensions" Aug. 29, 2012
  61. Fox Chicago, S&P lowers Illinois credit rating over pensions, Aug. 29, 2012
  62. Chicago Tribune, S&P downgrades Illinois to A-minus, citing pension inaction, Jan. 25, 2013
  63. Illinois Government News Network, Governor Quinn Convenes Budget Reform Commission, Aug. 22, 2011
  64. Chicago Sun Times, As debt crisis looms at state level, Illinois identified as a ‘sinkhole’, Aug. 14, 2011 (dead link)
  65. Chicago Sun Times, GOP rejects Quinn borrowing plan again, Aug. 19, 2011
  66. here
  67. 67.0 67.1 The Chicago Tribune "Quinn asking for $1.7B spending boost" Feb. 16, 2011
  68. 68.0 68.1 68.2 CNNMoney.com "Illinois governor proposes borrowing $8.7 billion" Feb. 16, 2011
  69. http://www.statebudgetsolutions.org/publications/detail/quinn-tweaks-borrowing-plan-amid-republican-opposition/ State Budget Solutions, Chicago Tribune, Quinn Tweaks Borrowing Plan, march 25, 2011]
  70. Illinois Farm Bureau, State lawmakers advance budget ideas, congressional map, May 27, 2011 (dead link)
  71. State Journal Register, Illinois Senate to accept House Revenue estimates, cut budget further, May 26, 2011
  72. San Francisco Chronicle, Illinois Must Stop Borrowing for Operating Costs, Treasurer Says, May 25, 2011
  73. http://www.pantagraph.com/news/opinion/editorial/article_5643ef12-88b3-11e0-9d0e-001cc4c002e0.html/ Pantagraph, If Gov. Quinn won't listen, Wall St. might, May 31, 2011]
  74. Daily Mail, Illinois slashes ALL state funding for drug and alcohol abuse treatment in massive cuts, Feb. 21, 2011
  75. 75.0 75.1 The Chicago Sun-Times "Top U.S. House Republican rejects federal guarantee for Ill. pensions" Feb. 23, 2011
  76. State Journal Register, Illinois Senate to Accept House Revenue Estimates, Cut Budget Further, May 26, 2011
  77. 77.0 77.1 Businessweek "Ill. House OKs deep cuts in preliminary budget" May 13, 2011
  78. Illinois Statehouse News "House versus Senate on budget?" March 30, 2011
  79. Chicago Tribune, House Democrats, GOP Join hands on Budget Plan, March 31, 2011
  80. WBEZ, Quinn Says He Won't Support Education Cuts, April 4, 2011
  81. Illinois Statehouse News "Illinois Senate sets its own budget numbers" March 16, 2011
  82. The State Journal-Register "Senators tackle easiest portions of state budget first" May 4, 2011
  83. Businessweek "Ill. Senate begins tackling state budget" May 4, 2011
  84. Businessweek "GOP senators propose $6.7B in cuts to Ill. budget" March 17, 2011
  85. Patch, Republican Senators Tout Budget Proposal, March 25, 2011 (dead link)
  86. Patch, Republican Senators Tout Budget Proposal, March 25, 2011 (dead link)
  87. Patch, Republican Senators Tout Budget Proposal, March 25, 2011 (dead link)
  88. State House News, Senate Adds 431 Million to Illinois Budget, May 31, 2011
  89. State House News, Senate Adds 431 Million to Illinois Budget, May 31, 2011
  90. My Stateline, Illinois Senate Passes Budget, May 31, 2011 (dead link)
  91. Illinois Times, The Senate president's side of the budget story, June 30, 2011 (dead link)