Illinois Republican Party

Quinn cuts some budget lines, but hikes spending overall; biz groups object
2/16/2011

By Greg Hinz - Crain's

He wants to increase spending by $1.7 billion — but says that's well below the state's "tough" new spending caps.

He does slash portions of the budget, particularly in medical expenditures — but also wants to borrow $8.75 billion and, by one account, would still have a budget deficit even after raising income tax rates.

Gov. Pat Quinn says he's done his best and Illinois finances are on the road to recovery. But business and some outside watchdogs are not at all impressed, as lawmakers and the rest of us begin to mull over the proposed $52.7-billion Fiscal 2012 budget that Mr. Quinn unveiled at high noon.

"We have taken important steps to rescue our state's finances," declared the governor, pointing to pension and Medicaid reforms that were adopted last year.

"We're on our way," he added, saying his new budget includes tough steps toward fiscal stability.

But even before it was unveiled, the budget was getting some loud raspberries from many Springfield players.

"For the first time (during the Quinn years), they're going to pay pension costs out of regular state revenues, and they are making some cuts," said Civic Federation President Laurence Msall. "It's a first step."

However, Mr. Msall immediately added, "After passing an enormous tax increase, the state deserves a budget that actually matches up expenditures to income."

In fact, he said, appropriations and income only appear to be in balance; actual liabilities are rising faster than income. The reason: "increasing expenditures."

The same message came from Tyrone Fahner, head of the Civic Committee of the Commercial Club, which represents Chicago's largest business group that, in years past, was willing to back tax hikes if they were coupled with spending cuts.

Mr. Quinn's budget increases spending $1.7 billion over last year's level and includes a $1.45-billion deficit, Mr. Fahner said. The governor also wants to raise cigarette taxes and borrow $8.75 billion, with the proceeds used not just to pay off old bills but to finance new spending.

"Once again, (Mr. Quinn) has buried his head in the sand," Mr. Fahner said. And while the budget does include some real cuts, "they're offset by increased spending."

Among the cuts outlined in the budget are $95 million less for public school busing, $522 million in reduced reimbursement to Medicaid providers and elimination of a $107-million pharmaceutical aid program started by former Gov. Rod Blagojevich.

Then there's one that will save Illinois major coin: Mr. Quinn would dispense with $300,000 in aid for the national high school rodeo.

But Mr. Quinn only talked in general terms about the possibility of cutting pension benefits for current state workers — something that groups like Mr. Msall's have been screaming for and which Illinois House Speaker Michael Madigan now apparently is willing to consider.

And he called for school district consolidation he suggested could save $100 million but gave no specifics on when.

Meanwhile, Senate GOP Leader Christine Radogno says the borrowing has "no support" in her caucus. Without some Republican votes, the borrowing plan will fail, since it needs a 60% vote in both legislative chambers.

It's going to be a long Springfield spring. I wish Mr. Quinn luck. He'll need it.

SOURCE: Crain's

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