Spending Pressures Loom As Quinn Prepares Budget Address

March 06, 2013

Illinois Gov. Pat Quinn delivers his fifth budget address Wednesday. Spending pressures have grown more intense as the state has put more money into government workers' pensions.

Illinois' finances were already bleak when Quinn became governor in 2009. Despite heavy cuts and an end to the national recession, they remain to have major problems. 

Spending pressures have grown more intense as the state has put more money into government workers' pensions. That is the picture Quinn will paint during his budget address.

One imagines it would be fun as governor to give a big speech like the annual budget address if the state's bank account was flush.

Before the Great Recession, Illinois governors used the budget address to proclaim how they were going to spread the wealth, to introduce new programs, to please key constituencies, to announce that more money would flow to schools.  There was even some of that after the national economy started to spiral. But that's not the sort of budget Gov. Quinn is expected to propose in his speech.

"If you are suggesting that we didn't go through great agony thinking about the pain that is going to be experienced in school district after school district, that is not the case," said Jerry Stermer, the governor's budget director. "This is (an) extremely painful presentation that we're making."

Education used to be sacred. No politician wants to cut money going to schools, but that is what Quinn is proposing.

Stermer said state spending on teacher pensions is set to increase by $842 million in the coming fiscal year.

"These skyrocketing pension costs lead to reductions in K-12," he said. "Nearly $400 million lower than the previous year."

Overall, Illinois' pension payments are set to rise by a billion dollars next year, eating up all of the state's projected revenue growth.

Even back in those halcyon days when the economy was booming, lawmakers skipped paying the government's share into workers' pension funds, leaving the state with an unfunded liability nearing $100 billion. 

Stermer and Quinn's other top aides, Press Secretary Brooke Anderson and Chief of Staff Jack Lavin, hammered the pointl It is the ramped up pension payments that are forcing Quinn to cut state funding to education, and other areas.

"It is the direct product of inaction on pension reform,” Anderson said.

"This budget is a direct result of the inaction on stabilizing pensions," Lavin exclaimed.

"...a direct result of not having action on stabilizing our public sector pension programs," Stermer added.

They did not outline any new suggestions for overhauling pensions, though Quinn has long called on legislators to pass a bill that would reduce the state's costs. Without that resolved, Quinn's aides say he will not introduce any new programs.

Still, they didn't give much in the way of specifics about what exactly will be cut, and by how much. Some of those decisions, they are leaving in the laps of legislators, but Quinn's staff did outline some particulars.

They say the governor will continue the effort he first unveiled at last year's budget address to close prisons and state facilities like the Murray Developmental Center in Centralia. But unlike last year, they say he is not recommending any new facility closures.

They also say the governor's not expecting any mass layoffs - maybe one or two here and there.  Rather, they say new cadets will be hired by the Department of Corrections and State Police, so as to reduce overtime costs.

They say Gov. Quinn wants to maintain funding for early childhood learning programs and of so-called MAP grants that help low-income students pay college tuition.

"An honest budget that is based on actual costs and continues to eliminate gimmicks," Lavin said.

"It's balanced, honest and very difficult," Anderson noted.

"(The budget) is balanced, is honest, and is extremely difficult," Stermer said.

Quinn's $62.4 billion budget does rely on a 2011 law he signed that raised income taxes by 67-percent. But that hike is scheduled to expire in 2015.

What to do about that is already a focus for politicians looking to challenge Quinn for the governor's seat in next year's election.

But Quinn's staff brushed aside tax hike questions, saying they are focused on this, next, new budget.

A budget - they repeated - that does not propose any new tax increases or hikes in fees. But that will not stop lawmakers from continuing to look for ways to bring in more money through everything from new casinos to money brought in from fracking for natural gas to a potential tax on satellite TV providers.

Quinn himself may introduce a few ways of his own. His team hinted that on Wednesdy, he will suggest ways Illinois can bring in money to pay down a backlog of nearly $9 billion dollars in unpaid bills  - a backlog built up as Illinois spent money it didn't have.

It is likely that will include closing so-called tax loopholes, which is another way of saying "ending tax breaks."

Quinn will have legislators' attention when he presents his budget plan, but after that, there is no telling what they will do with it.

When a reporter asked Quinn aides Brooke Anderson and Jack Lavin if the governor's confident legislators will want to "play ball" with his plan, they could only say:

"Well, we'll see," Anderson said.

"Isn't that our democracy?" Lavin said. "The governor proposes a budget, and the General Assembly appropriates a budget."

Already, the House has set a spending cap that's a half billion dollars less than the governor's proposing to spend.

Story source: Illinois Public Radio