On Feb. 15, Illinois Gov. Bruce Rauner will, for the third time, present his ideas for Illinois’ upcoming budget.
In 2015 he asked for lawmakers to balance a budget with a $6 billion hole in it. They responded with no budget for fiscal year 2016.
In 2016 he asked lawmakers to make $4 billion in cuts, or give him the authority to do so. They responded with no budget for 2017.
So third time’s a charm? He again is expected to ask for cuts or the ability to make them for the FY 2018 budget expected to spend $40.6 billion with only $33.5 billion of revenue. Good luck with that.
Illinois Senate President John Cullerton and Senate Republican Leader Christine Radogno have been trying to get something done, but the thin soup they’ve concocted offers a high cost to taxpayers in the form of tax hikes and big borrowing plus modest versions of the Rauner reforms. The Mexican standoff has us at 18 months without a budget, at a BBB credit rating that is barely above junk bond status, at a $130 billion pension deficit and with $10.5 billion in unpaid bills.
So here comes the Illinois Policy Institute with their proposal to live within our means. No tax increase. Balanced budget by cutting $7.1 billion. Easy peasy.
Here’s how they say it could be done.
Property tax reform, including a five-year freeze, saves $3.4 billion. They propose eliminating local government subsidies as well as reforming unfunded mandates on local government.
Self-managed pension plans, saves $1.65 billion. They suggest taking the State Universities Retirement System’s 401k-style self-managed plan and allowing all state employees to enroll. They hope the state workers decide the defined benefit plans are destined to fail and the workers opt for the safety of the self-managed plan. It’s hard to imagine even the Trump White House refusing to ride to the rescue of Miss Othmar’s teacher retirement fund, though.
Rein in the state’s biggest employee union, the American Federation of State, County and Municipal Employees, and implement Rauner’s last, best offer to save $1.1 billion. The union’s 35,000 members are the nation’s highest paid, and about 10 percent also would need to be let go.
Control Medicaid enrollment and costs, saves $415 million. Illinois spends $1 of every $4 in the general fund on Medicaid and the rolls are booming. They propose making sure people are eligible for the program, bulk buying with competitive bidding, repealing Obamacare and more outpatient surgery.
Cut back on higher education administration, saves $500 million. Half of the state’s $4.1 billion higher education budget goes toward pension costs, and the ranks have ballooned to 2,465 university administrators with more than half making at least $100,000. That while enrollment drops and tuition climbed about 6 percent per year.
Can you hear Illinois House Speaker Mike Madigan? That was just him screaming “MIDDLE CLASS!” with the sound carrying all the way from the South Side to Carbondale. That tromp, tromp, tromp is the sound of 35,000 AFSCME workers picketing. That mild clucking is state lawmakers.
But the plan is worth studying regardless of whether you buy the solutions or the math. It lays out the challenges. It again comes to the conclusion at which everyone seems to arrive.
This is gonna hurt.