Wednesday, February 15, 2012

Quinn's staff expects more revenue for upcoming budget

By Jamey Dunn

Gov. Pat Quinn’s budget team indicated today that he would likely have more money to work with in his upcoming budget than initially thought.

Budget Director David Vaught told a Senate budget committee in Chicago today that there would be “some revision” in the revenue estimate that was part of a three-year budget projection released in January. That document called for about $33.1 billion in total revenues. Vaught did not give specifics on how the numbers would change before Quinn's budget speech, which is scheduled to take place in a week, but he said revenues are “trending up.”

Vaught told the committee that Quinn does not intend to make the 9 percent cuts to all areas of spending that the January projection called for. Vaught said Quinn is not planning “across the board reductions of this size and scope in all areas.” But he added, “We will have them in some areas.” Quinn has said that he does not want to reduce spending on education and health care. Vaught reiterated Quinn’s desire to reform the Medicaid and pension systems this year, calling the growing costs of both “the squeeze” on other spending. Vaught said another goal for the year is to bring down the cost of health care to the state for retired public employees. He said a previous proposal to charge premiums to some retirees over a set income level would likely be up for consideration again. He also emphasized the need to address the backlog of bills but did not share details on what, if any, new ideas Quinn may present in his speech. Quinn has supported borrowing to pay down the backlog, but so far, that plan has found a chilly reception from many lawmakers.

Vaught added that Quinn plans to look at health care and human services as two separate areas of the budget this year because advocates complained that lumping them together led to human services being cut to keep up with growing Medicaid costs.

 Steve Schnorf, a member of the Budgeting for Results Commission and a former director of the Bureau of the Budget under former Gov. George Ryan, warned against a repeat of the fight over revenue estimates that happened last spring as lawmakers started the budgeting process for the current fiscal year. The House created a smaller estimate that the Senate and Quinn disagreed with, but that was what the budget was ultimately based upon. “Starting with an agreed upon revenue number … creates buy-in from all the players,” Schnorf said. “I think that buy-in is important.”

Vaught said that the three-year projection created last year was done hastily and that his office was “a little uncertain” about the revenues that the then newly passed income tax increase would bring in. He said the estimate this year is much more certain.

Today’s hearing was held to discuss the implementation of a new budgeting system, which would focus on the desired goals of programs and allocate money based on the success of programs toward reaching those goals. The system, known as Budgeting for Results, was signed into law by Quinn last year shortly after he presented his budget plan. This will be the first budget proposed under the new law, which requires the governor to create his plan based only from existing revenue. That means that — unlike last year — Quinn cannot pitch new revenue sources and tie spending to them.

Schnorf said that plans like Budgeting for Results aren’t new. “Most administrations have an initiative of some sort like this,” he said. “You go back through the last 30 years of press clippings and you would find initiatives like this announced by administrations.” But Schnorf said he thinks Quinn and lawmakers are committed to make the program work, and he predicted it would not become “sizzle rather than steak.”

 However, Schnorf warned lawmakers that if they focus only on tangible goals when making decisions and have an eye for programs that are measured as successful, they might not like the budgeting outcomes. He said that public schools, for example, may not rate as high performers and asked lawmakers: “Does that mean we should take the money away from them and invest the money somewhere else that has a better return on investment?"

He said that promoting successful programs during tight budget times would come at the cost of other programs that may not seem successful under Budgeting for Results measures but are nonetheless important to the state. “In a time of scarcity, the only way you can reward someone for performing well is by punishing someone else,” Schnorf said. “Every dollar you spend is a dollar you don’t have. You have to take it from somewhere else.”


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