Thursday, March 29, 2012

House plan could cut all areas of government

By Jamey Dunn  

All areas of government could see cuts under a measure approved by the Illinois House today.

House Resolution 706 lumps Medicaid spending in with obligations, such as the pension payment and debt services, that would be paid before any other areas of spending are considered. The plan calls for $6.6 billion in Medicaid spending, which assumes that the legislature will be able to come up with the $2.7 billion reduction in Medicaid liability called for by Gov. Pat Quinn. If projected Medicaid spending for Fiscal Year 2013 is more than the $6.6 billion, the additional costs would come out of all other spending areas. The House also approved an identical resolution, House Joint Resolution 68, that the Senate could take up for a vote.

The proposal also sets aside $800 million to pay overdue bills. Of that, $500 million would go toward Medicaid bills, generating a federal match that would allow the state to pay off $1 billion, or about half of its current backlog of Medicaid payments.

But addressing all these issues upfront meant that other areas of the budget would suffer. Rep. David Harris, who worked on the bipartisan resolution, estimated that money for state operations would be cut by almost $900 million. “I do not think anyone in this House should feel good about House Resolution 706. It reflects the terrible situation that your state is in. Yet it is the right thing to do,” said Harris, an Arlington Heights Republican.

Rep. John Bradley, who presented the resolution on the House floor, said that today’s vote was the start of what will prove to be a painful budgeting process. “This is going to be the beginning of many difficult choices that we’re going to have to make. We should not take this lightly. We should not take this cavalierly. The decisions beginning today are going to be hard.”

Opponents called on the legislature to slow down instead of locking itself into a spending plan that calls for cuts to education, human services and public safety. Bradley, a Marion Democrat, said money for each area of spending was decided by taking the averages of historical spending in the area.

“I’ve been doing this for 20 years, and this is the worst process I have ever seen,’ said Rep. Rosemary Mulligan, a Des Plaines Republican. “I think this is a very complex situation to be reduced to this kind of minutia,that we put out with a resolution that says this is how were going to do it. …What you’re really doing is, you’re basically wrecking the budget for the people in the state of Illinois.”

House Speaker Michael Madigan said: “This is not something that is the result of a quick judgment. This is something that was done in a very deliberative manner.”

Some argued that lawmakers should consider raising new revenues before opting for drastic cuts. Rep. Will Davis, a Homewood Democrat, said that lawmakers should “engage in a discussion” about new revenue before passing a measure that would likely result in cuts. “We can’t get enough of us in this chamber to stop this process long enough to talk about additional revenue, wherever it comes from?” But Bradley said that it is the lack of support in the House for raising taxes or fees that is creating a roadblock for raising new revenues. “It’s a result of the inability to do that within this chamber. And so, whether or not there are sufficient votes within this chamber to do additional revenue, of whatever source it might be, that’s the impediment to the additional revenue, not this resolution.”

Madigan said the vote was necessary this week because next week is the start of the two-week break for legislators, and when they return, they will only be in session for seven weeks. “Given the difficulty of this task, seven weeks is not a long time. Seven weeks, given the difficulty of the task, is a rather brief time.”

Davis, who chairs the House Appropriations Committee for K-12 education, warned that members of the House budgeting committees must be prepared to make tough votes. “They’re not going to like what’s going to come out of my committee. It’s not going to be pretty. In my committee, everything will be on the table. … I hope you’re prepared to vote for that. Since we can’t stop this process long enough to talk about additional revenue, then let’s just be prepared for the pain that’s going to come in these appropriation committees.”

Quinn also opposes cuts to education. "This resolution recognizes that our Medicaid costs are unsustainable, and if major reductions are not made this fiscal year, education, public safety and our most vulnerable will get squeezed even further,” Kelly Kraft, a spokeswoman for the governor's budget office, said in a prepared statement. “The resolution also recognizes the need to pay the state’s bills that have been created over decades of fiscal mismanagement. We continue to work with the General Assembly and have proposed closing ineffective loopholes to pay these bills down.The governor proposed a responsible budget that ensures job growth, invests in education, pays our decades’ old bills, calls for $2.7 billion in Medicaid reductions and additional pension changes to stabilize the system. We do not agree with reductions in education. We feel strongly that Illinois residents want to protect and invest in education to make certain that our students do not get left behind."

Davis and some Chicago-area lawmakers also suggested that the road fund, an area of spending important to downstate legislators, be considered for cuts. Luis Arroyo, a Chicago Democrat and chair of the House public safety budgeting committee, said the road fund would be on the table for cuts. House Minority Leader Tom Cross said such threats that play on regional divides are harmful to the budgeting process. “We’re at a time where we’re going to have to confront these problems with some fiscal discipline — some cutting and some reforming, [and] try to be fair across the board to … all regions. But it’s not going to be solved by raising more revenue. We can’t do that.” He said that the budgeting process is feeling the squeeze from growing pension costs, which are “crowding out” other areas of spending. “You find yourself in a position of having very little choice but to cut.” Cross renewed his call for the approval of a pension reform plan during the spring legislative session.

Quinn said today that he thinks “fundamental pension reform” will take place this year. “This is going to be, I think, a watershed year where we really straighten out things that have gone on for far too long, and the taxpayers have been required, I think, to pay for things that just aren’t right.”

Madigan characterized the resolution as a compromise based on the amount of money the state is expected to take in next year. “Not everybody is happy with the number in the resolutions because some people would like the numbers to be higher, and some people would like the numbers to be lower. And so, this is a compromise — a compromise predicated upon the best information available to the General Assembly.”

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