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 A statement from Quinn's budget office said the practice of state
government paying for the retirement of downstate teachers and
professors "requires careful examination and reform" because
"employers need to have a stake in funding their own employees'
pension costs."
Ben Schwarm, associate executive director of the Illinois
Association of School Boards, said schools can't simply absorb
hundreds of millions of dollars in new expenses.
"It's either an $800 million cut in public education funding or ...
an $800 million property tax increase to cover the pension costs,"
Schwarm said. "Either way, I'm not sure it's the best way of solving
the problem or in the best interest of the taxpayer."
Quinn also called for "aggressive restructuring of the Medicaid
system," a topic he may discuss in his State of the State address on
Wednesday and in the budget proposal he offers Feb. 22.
Retirement and Medicaid costs were two of the biggest factors in a
report Monday from the Civic Federation that says state government's
backlog of unpaid bills could nearly quadruple -- from $9.2 billion
to $34.8 billion -- over the next five years unless officials take
action.
The group's Institute for Illinois' Sustainability predicts pension
and health costs will continue to climb, while revenues will drop
when the state's temporary income tax increase expires. The result
will be a government falling further and further behind in paying
its debts, the federation concludes.
"The governor and General Assembly must act now," Laurence Msall,
president of the Chicago-based Civic Federation, said in a
statement. "Failure to address unsustainable trends in the state's
pension and Medicaid systems will only result in financial disaster
for the state of Illinois."
The federation recommended cutting state employees' pension
benefits, making retired employees contribute toward their health
care costs, trimming Medicaid spending and applying state income taxes to
retirement and Social Security income that is subject to federal
taxes.
It did not address the possibility of making the temporary tax
increase permanent or making schools contribute to teacher pensions,
an idea mentioned not only by Quinn but House Speaker Michael
Madigan and Senate President John Cullerton, both Chicago Democrats.
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A major state-employee union sharply criticized the Civic
Federation's recommendations.
The American Federation of State, County and Municipal Employees
said the group calls for government workers to make sacrifices, but
not big corporations or wealthy individuals. It opposes borrowing to
pay overdue bills but ignores the impact on businesses and community
groups the state is failing to pay, the union said, and the report
doesn't make clear that high pension costs are largely a result of
the state failing to pay its share in the past.
"The federation's repeated omission of relevant context calls its
credibility into question," said an AFSCME statement. Danny Chun,
spokesman for the Illinois Hospital Association, said the Quinn
administration has been talking to his organization about
overhauling the state Medicaid system, including cutting payment
rates and overseeing patient care more carefully.
"This is very complicated stuff. It's not easy," Chun said. "Let's
make sure we do it right."
He said it should be done by lawmakers instead of turned over to the
executive branch, so that everything is done out in the open. That
process also might reduce the cuts as lawmakers try to protect their
local hospitals.
Quinn hinted over the weekend that in Wednesday's speech he may propose some kind of tax
relief for families. He often has talked about
making Illinois taxes more progressive by lowering the amounts paid
by the poor and middle class.
Cullerton, the Senate president, has concerns about any moves that
leave state government with even less money to operate, an aide
said.
"Everyone needs to be asking what the price tag is and how we pay
for it," said Cullerton spokeswoman Rikeesha Phelon.
[Associated Press]
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