Thursday, June 30, 2011

Quinn uses veto pen to revisit his budget plan

By Jamey Dunn 

Gov. Pat Quinn released his changes to the state budget late this evening. His reductions reiterate components of his original budget plan that lawmakers did not approve.

Quinn proposes to reduce the general revenue budget approved by the legislature by $376 million. The largest reduction is a $276 million cut to Medicaid funding for hospitals. The legislature approved about $2.3 billion in such funding. Quinn Budget Director David Vaught said that the reduction is meant to bring hospitals to the table to negotiate cutting their rates. In his original proposal, Quinn called for cuts to Medicaid rates that he said would save the state an estimated $550 million in the first fiscal year.

Without a change to the rates, hospitals will continue to be paid the same amount, and Quinn’s reduction would mean that the money would run out before the end of the fiscal year. “We hope that it helps convince the interested parties on this, which would be hospitals, to come to the table,” Vaught said. “We have a rate system in Illinois that’s been in effect for many years. It’s not been changed for many years. …We’re dealing with a very fast-growing industry that is growing more quickly than we can afford.” He acknowledged that some hospitals and nursing homes felt they got the short end of the stick in recently approved nursing home legislation and a workers’ compensation reform package, and that may complicate negotiations.

During the budgeting process, hospital representatives said the industry would prefer waiting longer for payments than see a  drastic reduction in the rates they are paid. “They kind of like getting 1 percent interest a month on their money, too,” Vaught said. In prepared explanations that Quinn released with his reductions, he said he was concerned about the approved budget pushing $1.2 billion of Medicaid bills from Fiscal Year 2012 into FY 2013. “Neglecting our bills today only creates a bigger problem for tomorrow — an ill-advised strategy that, together with the poor fiscal discipline exercised by previous administrations, has created and will exacerbate the staggering backlog of unpaid bills we face today.”

Quinn also eliminated the funding for the salaries of regional superintendents. He proposed eliminating regional offices of education in his budget plan but met objections from school districts and legislators. Vaught reiterated the administration’s position that local school districts can cough up the money if they want their own regional superintendent. “This is not a proposal to say get rid of their regional superintendents,” he said.

Quinn also wants to reduce transportation funding back to FY 2011 levels, which would mean an $89 million reduction. Transportation funding was cut drastically in FY 2011 and Quinn proposed another big cut for FY 2012, but the legislature did not go along.

Vaught said Quinn would prefer to see such cuts so the state could increase general state aid to schools. He said that since general aid can be spent on anything, it would allow schools to use money at their own discretion. He called it “the best fairest way to distribute state aid for schools.” Since Quinn cannot restore any funding to the legislature’s budget, Vaught said he will be lobbying lawmakers to put money back into general state aid for schools, among other areas of spending. He said Quinn’s reduction and line item vetoes are just part of the governor’s long-term vision for the state budget. “Today is the reduction part.”

Quinn made other cuts that he said reduced bureaucratic costs and eliminated redundancies in the budget.

The legislature must approve all of Quinn’s budget reductions. Quinn has been scarcely involved in the budgeting process this year, and he is pushing some of the original pieces of his proposal that did not go over well with the legislature the first time around. “In spite of the fact that he’s going to be governor for four years that he was elected, he certainly has not been able to assert the power within the office and his role in the process,” said Kent Redfield, an emeritus political science professor at the University of Illinois Springfield. Time will tell if legislators will warm to budget policy they have already rejected and welcome a governor into the process who has been a less than active player so far.

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