Springfield, Ill. – Illinois’ fiscal challenges have been well-documented in recent months, leading many lawmakers to question Gov. Pat Quinn’s Feb. 22 budget address, which State Sen. Sue Rezin (R-Morris) said increases state spending by almost $550 million, expands state programs, and offers no suggestion on how to pay down Illinois’ tremendous bill backlog or roll back the Democrats’ 2011 income tax hike.
Gov. Quinn adopted a somber approach to his budget address, an approach that many lawmakers felt was lacking during his recent State of the State speech. A number of legislators said they were pleased the Governor acknowledged Illinois’ serious economic woes, unveiling a spending plan that largely reflected the more conservative outline his budget office released in January.
Echoing his January budget documents, Quinn proposed a freeze to almost all state spending, including the big-ticket items of healthcare, welfare and education. However, while the goals were admirable, Sen. Rezin said the budget plan offered little detail on how to achieve those goals.
Though Quinn said his plan would cut spending and roll back expenditures to the Fiscal Year 2008 level, the proposal would actually spend about $3.4 billion more than the 2008 budget and approximately $550 million more than the adopted budget for the current fiscal year. One glaring omission was a plan to pay down Illinois’ backlog of bills, which the Comptroller estimates to be around $8.5 billion.
“What the Governor unveiled will do nothing to bring fiscal responsibility to the state and will only further solidify the 67 percent income tax increase as permanent,” Sen. Rezin said. “His proposal to spend $50 million more than last year – according to his own budget numbers –is astounding. This budget makes no plans to rollback state spending to fiscal year 2008 levels as he talked about previously doing. It’s truly disappointing, not to mention irresponsible.”
Though the Democrats’ 67 percent income tax increase was pushed as a way to pay off the state’s overdue obligations, even with the tax increase revenues Quinn’s budget plan sets aside just $160 million to pay off the state’s old bills, spending 99.5 percent of every dollar the state is anticipated to collect in the coming year. Unless Illinois brings spending under control, the backlog could reach $35 billion in just five years—approximately $2 billion more than the state’s entire annual general fund budget.
“Gov. Quinn cited reducing the state’s backlog of bills as the primary reason for last year’s massive income tax hike,” Sen. Rezin said. “Yet this budget that the Governor has proposed would leave us just $160 million to pay off old bills after spending nearly every anticipated dollar the state will receive in the coming year. That equals paying 1.9 percent of the bill backlog, which hardly makes an impact.”
Many lawmakers were particularly interested in the Governor’s plan to address the state’s rapidly growing pension and Medicaid liabilities. Though Quinn’s budget proposal reflects a $2.7 billion Medicaid cut, he did not offer details on how to achieve those savings.
Senate Republicans have been long-time advocates for comprehensive reform of the state’s Medicaid system, working to address the systemic budget shortfalls and inefficiencies that threaten the state’s health care program for low-income residents and persons with disabilities. Currently, Medicaid is the fastest growing state program, expanding at a rate that far outpaces available revenues.
Though many lawmakers were pleased that the Governor is advocating for much-needed cuts to the state-financed health care program, they noted that based on the Governor’s proposal the state would still end Fiscal Year 2013 with a $4.5 billion Medicaid bill backlog. Serious changes must be made to curtail liabilities, but lacking significant reforms, the state is on track to see a $21 billion Medicaid backlog within five years.
Despite a target of reducing Medicaid spending by $2.7 billion, the proposed budget would actually see a record three million people enrolled in the Medicaid program, or an increase of more than 150,000 people this year. An increase of that size is akin to adding the entire population of Joliet to Medicaid, which already covers the cost of one out of every two births in the state.
Senate Republicans said the state needs to be more aggressive and proactive about pursuing Medicaid reforms, noting that the Quinn Administration still hasn’t filed a waiver with the federal government to allow Illinois to implement the bipartisan Medicaid reforms passed by lawmakers in 2011. Over time, those reforms would save the state billions of dollars.
“Gov. Quinn spoke on the extreme need to reform Medicaid, but it seems like he had no real idea of how to accomplish that,” Sen. Rezin said. “I agreed with him when he said that we need to prevent fraud and enforce eligibility requirements, but his administration has failed to enact reforms we passed last year that would do just that. It is definitely an area that needs to be addressed this spring, and without any sort of reform, our deficits will grow further and people might not receive the care they need.”
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 see large increases, such as a 200 percent 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.
The proposed budget also advances closure of several state facilities, including eight Department 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 Murphysboro, a Department of Agriculture lab in Centralia, a forensics lab in Carbondale, 24 local Department of Human Services’ offices, 16 state police communications centers and four state garages.
Of note, the budget would slash the state annual Road Program, reducing it by half to $1.5 billion. The Road Program for the coming year would be the smallest since Fiscal Year 1999.
Several lawmakers said they were interested in the Governor’s cuts to the state’s Road Program, since construction projects are often viewed as positive because of the jobs and commerce they create. Details of the program, which is funded through dedicated revenues, are scheduled to be released in April.
Legislation approved by Senate Committees this week includes:
Appellate Defender (SB 3489): Establishes that the Office of the Appellate Defender is allowed to continue providing training and trial assistance to state public defenders though they will no longer do so using revenue from the former Capital Litigation Trust Fund, which has gone unfunded since the repeal of the death penalty.
Child Sex Offender (SB 3258): Changes the definition of child sex offender to include offenses that may not be sexual in nature, but when committed against someone younger than 18, the offender would be subjected to the same location and residency restrictions as a child sex offender.
Code Violations (SB 3406): Requires sanitation and building inspectors to include the title and citation of the alleged code being violated along with a description of the circumstances of the alleged violation.
Condo Manager Fees (SB 3202): Caps condo manager fees at $1,000 per year.
Cook County (SB 3386): Attempts to transition the Cook County Board of Review to a paperless system by giving the Board the option to send electronic notices, and allows taxpayers to file assessment complaints electronically. (SB 2536): Establishes that in Cook County, Public Administrator’s case files should be retained in accordance with the Local Records Act, instead of being deposited with Circuit Clerk who is no longer accepting these records.
Cook County Forest Preserve (SB 2946): Allows the Cook County Forest Preserve District to establish procedures to comply with state and federal regulations concerning affirmative action and the use of businesses owned by minorities or women in construction.
Dental Oversight (SB 2941): Provides that a dentist utilizing dental assistants can not supervise more than four dental assistants at any one time for placing, carving, and finishing of amalgam restorations; the monitoring of nitrous oxide; and pit and fissure sealants.
Enterprise Zone (SB 3253): Allows the corporate authorities of the county or municipality that adopted an ordinance designating an Enterprise Zone are allowed to extend the zone for an additional 20 years.
Fund Sweeps (SB 2958): Prohibits sweeps of check-off funds, which have been used in recent years to supplement state spending.
Gaming (SB 2971): Extends the Quality of Life scratch-off lottery game for another five years; the game creates revenue that funds HIV/AIDS prevention education.
Homestead Exemption (SB 3403): Extends the senior homestead exemption to also apply to individuals with disabilities. (SB 3429): Changes the general homestead exemption from a maximum of $6,000 to a flat $6,000.
Lake County Trust (SB 3167): Allows Lake County to establish an affordable housing trust fund by ordinance or resolution and to charge a $5 surcharge on recordation of any real estate-related document in order to finance the fund.
Methamphetamine Conviction (SB 3423): Allows a first-time offender caught with less than 15 grams of methamphetamine to choose treatment under Department of Human Services’ supervision.
MWRD (SB 3438): Requires the executive director of the Metropolitan Water Reclamation District to appoint a public and intergovernmental affairs officer, with the advice and consent of the board.
Order of Protection (SB 2869): Requires the sheriff or other law enforcement official to notify the Department of Corrections (DOC) when an order of protection, a civil “no contact” order or a stalking “no contact” order is entered against an individual committed to DOC or who is on parole or mandatory supervised release.
Private Detectives (SB 3315): Provides an exemption from the provisions relating to licensure of private detectives for persons who provide computer forensics services.
Prompt Payment (SB 3284): Clarifies that interest payments required under the Prompt Payment Act are supposed to be paid on a daily basis versus a monthly basis, and exempts certain personnel information from inclusion in the Comptroller’s annual report.
Property Tax Exemption (SB 3210): Allows a school, religious, or charitable organization in, or which fall in or that are contiguous to, Chicago, to sell its property, lease the land back for its original exempted use, and then use the money for capital improvements without losing its property tax exemption. All construction projects are subject to the Illinois Prevailing Wage Act.
RTA Free/Reduced Fares (SB 2875): Requires the Regional Transportation Authority (RTA) to provide monthly to the Department of Public Health (DPH) a list of riders who receive free or reduced fares. Within two weeks of receipt, DPH must report back to the RTA any discrepancies that indicate that a ride receiving free or reduced fare is deceased.
School Bus (SB 3487): Allows a student to be transported in a multi-function school activity bus for any curriculum-related activity except for transportation between school and home.
Snow Removal (SB 3435): States that ice or snow plowed or removed from a residential driveway may not be deposited upon a public highway if local or state police determine it creates a traffic safety hazard.
Tax Abatement (SB 2503): Allows a county or municipality to grant property tax abatements for the residences of the surviving spouse of a fallen soldier.
Tax Caps (SB 3314): Requires the estimated dollar amount of a property tax increase to be calculated on the equalized assessed value, including the State Multiplier.
Tax Check-off (SB 3148): Adds the Habitat for Humanity check-off to the individual income tax return form for the 2012 tax year. (SB 3320): Allows any income tax check-off charitable fund that received less than $100,000 but more than $90,000 by Oct. 1, 2011, to be included on the 2012 individual income tax form.
Teacher Pensions (SB 3168): Prohibits school boards from hiring multiple TRS retirees to fill a position normally filled by a single full-time teacher, except for subject or administrative position shortages. Adds retiree return-to-work pension suspension exceptions to the SERS Article of the Pension Code.
Trustees (SB 3171): Seeks to restore a provision that allows persons holding less than $500,000 in trust funds to continue to act as the trustee after the funds are deposited.
Vehicle Accident (SB 3409): Provides that in the case of a vehicle accident resulting only in damage to a vehicle, a driver may move his vehicle as soon as possible off the highway to the nearest safe location on an exit ramp shoulder, a frontage road, the nearest suitable cross street, or other suitable location that does not obstruct traffic and remains at the location until the driver has fulfilled the statutory reporting requirements.
Veteran Handicapped Plate (SB 3491): States that any veteran who holds proof of a service-connected disability from the U.S. Department of Veterans Affairs, and who has obtained certification from a medical professional, is qualified for a license plate with the international symbol of access and may park in a designated handicapped parking space. Any veteran who holds proof of a service-connected disability from the VA, and whose disability have been declared 50% or more but does not qualify the veteran for a plate with the symbol of access, may make application for a special registration plate without the symbol of access; this plate does not allow the holder to park in a handicapped parking space.
Veterans Superintendent Cook (SB 3181): Provides that the veterans’ superintendent chosen by the Cook County Veterans Assistance Commission cannot take office until approved by the president or chairman of the county board.
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