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Illinois state budget (2012-2013)

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Governor Pat Quinn signed the state's $33.7 billion FY2013 budget into law on June 30, 2012, after vetoing $57 million in spending approved by the Illinois General Assembly.[1]

As of July 2012, Comptroller Judy Baar Topinka said the state had a backlog of 160,000 bills to be paid totaling $8 billion.[2]

Highlights of the FY 2013 state budget:

  • 15 percent of the budget money spent went toward pensions;[3]
  • K-12 education lost $210 million from the state and with reductions in federal funds included, the reduction tops $855 million.[4]
  • Eliminated the Illinois Cares RX program.[5]

State debt

The state government had $58 billion in direct debt, two-thirds of which consisted of bonds the government issued to cover retirement payments for workers, including a $10 billion pension obligation bond that broke all previous records in 2003. Despite the borrowing, the total pension shortfall was conservatively estimated at $85 billion by some.[6] The state faces total debt of $271,111,148,000 according to a State Budget Solutions study.[7]

Legislative proposed budget

On May 31, 2012 the Illinois State Senate passed a $29.36 billion budget along party lines and sent the spending plan to the governor's desk. The spending plan was up one-tenth of one percent from the current budget. In the new budget education spending declined by nearly four percent, child welfare by almost seven percent and corrections by more than three percent. The Illinois Department of Transportation received $1.6 billion in bonding authority for highway and transit projects.[8]

The proposal reduced state spending by $317 million, or a little under two percent.[9]

The legislative proposal would have paid $1.3 billion of the state's roughly $9 billion backlog in unpaid bills, whereas the governor's proposal did not make such payments.[9]

Illinois lawmakers projected that state revenues would be $33.7 billion in fiscal year 2013, which started July 1, 2012. The state had between $6 billion and $8.5 billion in overdue bills.[10]

Governor's proposed budget

Gov. Pat Quinn presented his $33.8 billion fiscal year 2013 budget on February 22, 2012.[11] The full text of the speech can be found here.

The governor's budget increased spending by 1.5 percent.[12] The governor did not specify many cuts, saying instead he would work with lawmakers to draft solutions for issues such as pension reform, Medicaid reform and closing corporate loopholes.[13] Republicans were frustrated by the governor's lack of detail.[14] Quinn put the onus on a bipartisan group of legislators formed to look at the state’s pension mess to submit a report to him with specific recommendations by April 17, 2012.[12]

Gov. Quinn claimed that his proposed budget was smaller than FY 2012, while Republicans argued that the budget had in fact grown larger than the previous year's. Quinn's budget spent $425 million less in agency funding than the FY 2012 budget, but overall the governor's proposed budget spent $50 million more the previous year and $3.4 billion more than five years previously.[15]

The governor's budget cut projected Medicaid spending by $2.7 billion and closed several state facilities.[16][17] The Department of Corrections and the Department of Children and Family Services were to consolidate offices with a total of 59 facilities impacted.[18][12]

The governor proposed cuts of nine percent to every constitutional office and state department except education and the state police.[19] Not all state officials endorsed the nine percent cuts to their agencies. The attorney general said her office hadn't recovered from a 25 percent budget cut in 2006 and that staff lawyers hadn't gotten raises in six years.[20]

When giving the State of the State Address on February 1, 2012, the governor said that he wanted to increase college scholarships, spend more on preschool and lower taxes on natural gas, but he did not discuss possible sources of funds for his plans.[21]

Increased Expenses

The state was likely to pay more in many areas in FY 2013. The state's retirement systems released a report in November 2011 projecting that the state's pension payment would increase $5.9 billion for FY 2013, $1 billion more than it was in FY 2012. Medicaid costs were also expected to rise, and lawmakers were seeking $490 million in additional funding from the state.[22] On June 14, 2012, the governor signed into law $1.6 billion in health care and Medicaid cuts and a $1 per pack cigarette tax increase, which Gov. Quinn said was necessary to bring the system back from the brink of collapse.[23]

References

  1. The Chicago Sun Times "Quinn cuts $57 million from state budget" June 30, 2012
  2. WJBC.com "Topinka: No improvement in state budget" July 3, 2012
  3. Tri States Public Radio "Illinois Pension Debt Hurts Other State Services" July 8, 2012
  4. The Springfield Journal-Register "Schools take heavy hit in new Illinois budget" June 8, 2012
  5. The Huffington Post "Springfield Budget Recap -- The Poor Get Poorer" June 19, 2012
  6. The New York Times "Illinois Debt Takes Toll, Study Finds" Oct. 24, 2012
  7. State Budget Solutions "State Budget Solutions' third annual State Debt Report shows total state debt over $4 trillion" Aug. 28, 2012
  8. Quincy Herald-Whig, Illinois budget passes; pension bill will require a summer session, June 1, 2012
  9. 9.0 9.1 Businessweek "Democrats in Illinois Senate offer budget proposal" May 18, 2012
  10. The Quincy Herald-Whig "Illinois budget fix will require years to reduce debt, discipline to avoid frivolous spending" March 26, 2012
  11. San Francisco Chronicle "Illinois Becomes Moody's Lowest-Rated State After Downgrade" Jan. 9, 2012
  12. 12.0 12.1 12.2 The Chicago Sun Times "Gov. Pat Quinn on pension mess: ‘Everything is on the table’" Feb. 22, 2012
  13. The Chicago Tribune "Quinn's bad news budget: 'Our rendezvous with reality has arrived'" Feb. 22, 2012
  14. The State Journal-Register "Quinn's budget address lacks details on pensions, Medicaid fixes" Feb. 22, 2012
  15. Forbes "Pat Quinn's Illinois Budget: Spending Up, Program Spending Down" Feb. 27, 2012
  16. State Budget Solutions "Quinn: Medicaid must be cut back" Feb. 20, 2012
  17. The State Journal Register "Quinn's budget plan to include more state facility closures" Feb. 16, 2012
  18. The Chicago Tribune "Quinn to call for dozens of prison, human services closures" Feb. 21, 2012
  19. ABC7 "Quinn's budget address: What's expected to be cut" Feb. 21, 2012
  20. State Budget Solutions "Other Ill. officials cool to Quinn's call for cuts" Feb. 29, 2012
  21. The Chicago Tribune "Quinn shoves aside state's budget woes" Feb. 1, 2012
  22. Illinois Statehouse News "Illinois needs $1 billion more for FY13 budget" Nov. 21, 2011
  23. The Chicago Tribune "Quinn says Medicaid cuts were needed to prevent collapse" June 15, 2012