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 Following months of dismal
financial news, lawmakers were prepared for a challenging, austere plan when
Governor Quinn unveiled his proposed FY 13 budget Feb. 22.
Senate Republicans hoped
that the Governor was ready for a "Reality Check."
What they got was a proposed
budget that would still increase spending over the current fiscal year and
would still expand programs with little explanation as to where the money would
come from.
While the Governor
referenced a roll back of state spending to its fiscal year 2008 level, he
actually asked to spend about $3.4 billion more than in 2008. And, the Governor
proposed spending about $550 million more than the adopted budget for the
current fiscal year.
Few legislators expected to
see expanded programs, and most were more interested in hearing the Governor's
plans to bring spending under control and assure that the 67% income tax
increase would actually be temporary.
Just weeks before, figures
from his human services agency had revealed that the state will likely face a
$21.0 billion Medicaid backlog in five years. Coupled with other costs, the
total state backlog could reach nearly $35 billion or about $2 billion more
than the state's entire annual general fund.
So, the question uppermost
in the minds of many legislators was what the Governor would suggest to dig the
state out of the financial mess. The Governor received credit for unveiling a spending
plan that largely reflected the outline his budget office released in January.
At that time, he proposed a freeze across almost all spending, including the
big-ticket items of healthcare, welfare and education.
But, while the goals were
admirable, the budget offered little detail as to how to achieve those goals. And,
there were glaring exceptions to the austerity, such as a 200% hike steered to
controversial programs that benefit only a handful of Chicago neighborhoods.
Although the 67% tax hike
was sold as a way to pay down old bills and get the state back on secure
financial footing, for the second year in a row, the money is instead being
used for new spending. The Governor's proposed budget spends 99.5% of every
dollar the state expects to receive and would leave just $160 million to chip
away at an $8.5 billion bill backlog.
Medicaid
Although the Governor
promised to lower Medicaid costs by $2.7 billion, he offered few specifics in
how to achieve the spending reductions needed to meet his goal. Similarly, while keying in on skyrocketing
public pension payments, the Governor offered little in the way of reforms and
continued to promote the idea of pushing more costs onto local property
taxpayers.
Missing from the Governor's announcement
was a serious discussion of the $34.8 billion backlog of payments that his own
administration has projected will hit Illinois within five years.
Reducing the state's backlog
of bills was cited as a primary reason for last year's massive income tax hike,
but the budget the Governor proposed would leave just $160 million to pay off
old bills. Instead, it spends 99.5% of every anticipated dollar the state would
receive in the coming year.
Despite a target of reducing
Medicaid spending by $2.7 billion, the proposed budget would actually see a
record three million persons on Medicaid during the coming year – adding
160,000 persons to the program. That is like adding the entire population of
Joliet to Medicaid – this to a program that already covers the cost of one out
of every two births in the state.
Pensions
As with Medicaid, the
Governor did not offer details or specific plans, other than his previously
announced suggestion to shift costs to property taxes. His budget did assume
that $160 million in unclaimed property would be used to help pay the state's
$5.25 billion pension obligation next year.
Education
The Governor asked to add
$32 million to state education spending, but the largest portion of that – $20
million – would be for early childhood education, rather than traditional
classrooms. In fact, the traditional per-pupil allocations under the state's
general state aid formula and mandated categorical programs would decrease.
Other specialized programs
would also see large increases, such as a 200% hike in special grants to
schools that perform poorly.
At the same time, the
Governor's plan would require local governments to assume the cost of the
State's Regional Offices of Education through the personal property replacement
tax.
Facility Closures
The proposed budget would
close several state facilities including eight Dept of Corrections closures.
The Governor proposed closing prisons in Tamms and Dwight and shuttering six
adult transitional facilities in Peoria, Decatur, Aurora, Carbondale and two in
Chicago.
The governor previously
announced plans to close the Jacksonville Developmental Center and Tinley Park
Mental Health Center. In the new budget, he would also shut down the Singer
Mental Health Center in Rockford and Murray Developmental Center in
Centralia.
Also on the cut list were
juvenile justice facilities in Joliet and Murphsyboro, a Dept. of Agriculture
lab in Centralia, a forensic lab in Carbondale, 24 local Department of Human
Services offices, 16 state police communications centers and four state
garages.
Road Construction
The budget would slash the
state annual Road Program, cutting it in half. The Road Program for the coming
year would be the smallest since Fiscal Year 1999. Details of the program,
which is funded through dedicated revenues, are scheduled to be released in
April.
FY13 Budget Proposal in Brief
Spending goes up
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Total General Revenue Funds spending of $33.77
billion is up over $500 million from last year’s adopted budget of $33.2
billion.
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Governor's own numbers show a $50 million
increase in spending over what he plans to spend in FY12.
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Spending level continues on path to make the 67%
tax increase permanent.
Total Spending is much
higher than FY08
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Governor Quinn may claim his FY13 spending level
is below FY08.
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Only true if you look at appropriated amounts
and not real spending.
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Total spending in plan is $3.4 billion over
FY08.
Programs are expanded
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Early Childhood Education – Up $20 million
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Monetary Award Program – Up $50 million
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Neighborhood Recovery Initiative – up 200% from
$12 million to $36 million
No plan to pay bills
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$160 million cash left over to pay off old bills
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That’s less than 2% of the current $8.5 billion
backlog
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Tax increase was supposed to take care of bill
backlog.
Pension Payments made in
full at $5.1 billion
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Quinn offers no specific proposals on pension
reform as part of budget plan
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On this and Medicaid, the two largest areas, he
is deferring to the legislature to bring ideas to him.
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Still supports cost shifting to downstate and
suburban property taxpayers.
Medicaid
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FY13 enrollment projected to surpass three
million. More persons on Medicaid then ever before. Adds 150,000 per year to the
program. Like adding the City of
Joliet to Medicaid every year.
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Appropriation held flat to last year. $2.7 billion short of expected costs.
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This will require a cut of $2.7 billion or
another $2.7 billion is added to backlog of bills.
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Governor offered no specific plan to reduce Medicaid
to his proposed level.
Closure of State Facilities
proposed
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Supermax Tamms, Illinois Youth Centers at
Murphysboro and Joliet, Dwight state prison;
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Adult Transition Centers in Peoria, Chicago (2),
Decatur, Aurora and Carbondale;
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Jacksonville Developmental Center, Tinley Park
Mental Health Center, Singer Developmental Center (Rockford) and Murray Mental
Health Center (Centralia);
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Close 24 local Department of Human Services
local offices;
Regional Offices of
Education funded out of Personal Property Replacement Tax again.
Annual Road Program slashed
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At $1.5 billion, FY13 annual road program is
lowest since FY99 – before Illinois FIRST.
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FY13 program would be 50% lower than last year –
program is cut in half.
Capital - Governor calls for
$3 billion in new capital bonds
No new revenues proposed to
cover these new bond payments
Debt service would be about
$200 million once all bonds are sold, over several years
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