Thursday, July 01, 2010

Quinn's budget still fluid

By Jamey Dunn

Gov. Pat Quinn unveiled his plan this morning to cut the state budget but left wiggle room for changes down the road.

Quinn says his almost $25 billion budget will cut $1.4 billion from last fiscal year's total.

K-12 education will sustain $241 million in cuts from fiscal year 2010:

  • $84 million in student transportation.
  • $68.5 million in reading improvement block grants.
  • $2.1 million from the State Board of Education's operating costs.
  • $70.5 million in support for grant programs.

Quinn vetoed all $15,670,600 allocated in the budget for hold-harmless funding, which was created to help schools adjust to a change in the funding formula. It was not meant to be permanent, and there have been past proposals to phase it out gradually.

Higher education will see a $100 million reduction from fiscal year 2010:
  • $86 million from public universities.
  • $14 million from community colleges.
Human Services will take a $312.6 million hit:
  • $49.8 million from operations, which will affect local offices as well as state hospitals.
  • $262.8 million from grants for non-Medicaid mental health and developmental disability programs. These cuts will limit eligibility for those programs and slow down the payment cycle for developmental disability service providers.
Other overall agency cuts include:
  • $17.4 million from the Department on Aging.
  • $17 million from the Department of Public Health.
  • $6 million from the Department of Children's and Family Services.
  • $15.4 million from Illinois State Police.
  • $41.9 million from the Department of Corrections, which Quinn’s plan claims will come from “better management of overtime costs and other operational expenses.”
If the state is going to hold to an agreement it made early this year with the American Federation of State, County and Municipal Employees Council 31, agencies have to make these reductions without affecting facilities such as prisons or causing closures or layoffs. In return, AFSCME agreed to forgo pay increases and find savings in health care costs.

The only agency that will see an increase in funding is the Department of Health Care and Family Services, where the budget went up by $162 million. The department will have to make a $7.2 million cut in operating costs. About $169.2 million will go toward getting certain Medicaid providers on a 30-day reimbursement cycle, which is required to capture a higher match of federal funds.

Quinn’s budget continues to rely on an extension of the elevated federal match, which is 62 cents on the dollar instead of 50 cents. It is set to expire December 31, and a six-month continuation is stalled in the U.S. Congress.

Although the budget goes into effect today, Quinn’s budget director, David Vaught, said the administration would work with agencies in July to make some tweaks. He said they also plan to borrow from special funds to help pay down the nearly $6 billion in overdue bills from fiscal year 2010. Vaught added the bills would be paid by the newly extended deadline of December 31.

Quinn also signed an executive order that seeks to find savings in agency overhead, such as travel and printing costs.

Those in the human services and education sectors say the governor can spell out his budget all he wants (including creating a website where citizens can track spending), but they can’t count on the numbers.

“It really comes down, in a sense, to more of a wish list than a reality,” said David Comerford, a spokesman with the Illinois Federation of Teachers.

While Quinn said he hopes to save as many education jobs as possible, Comerford said administrators are estimating that the majority of those laid off in the spring will not return in the fall. The $1.4 billion in unpaid bills from last fiscal year makes schools hesitant to count on getting all the money promised in this year’s budget.

“They’re going to have to pay the backlog before they can even begin to pay this year’s [appropriations]. … The state already couldn’t live up to its promises this year. There is no reason to believe the state will next year,” Comerford says.

Social service providers signed contracts with “estimated” reimbursement rates. So they have no solid numbers on what they will get paid for their services.

Don Moss, coordinator for the Illinois Human Services Coalition, said contracts had to be signed yesterday and submitted for payment authorization. “So people had no choice but to sign blank lines or numbers that may be taken away or modified.”

Moss said his organization supports $4 billion in borrowing to make the pension payment, but the legislation lacks the needed support in the Senate. Vaught confirmed today that the state will make the pension payments.

Moss characterized the borrowing as “the only way out before the election.” He said after the November election, social service providers will renew their push for an income tax increase.

Regardless of what happens in November, schools, agencies and providers who serve vulnerable populations must plan their budgets for the 2011 fiscal year with the numbers the governor’s office gave them today and then hope the money they were promised, both in last year’s budget and today’s, comes in.

“We have a very pessimistic view right now of what is coming down,” Moss said.


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