And that task is big — big as in billions of dollars.
The memo from transitional budget director Tim Nuding to the governor-elect
attempts to explain how the massive holes in the state budget grew to their
current proportions and why Illinois must fundamentally change the way the state
operates.
Although the Rauner team memo does not set forth specific proposals, some
legislators and analysts on Tuesday said Rauner will almost certainly have to
call for not only cuts in state spending, but for more state revenue.
Illinois has a spending problem – not revenue one, said state Rep. Tom Morrison,
R-Palatine.
“I hear people say the state has cut itself to the bone and then I walk through
those $600,000 doors at the Capitol and I know they are wrong,” he said. “The
state is taking in more revenue today than it has at any time in its history. We
have a spending problem.”
The incoming Republican governor, to be sworn in Jan. 12, may be trying to lay
the groundwork for what may be a fierce battle to bring Illinois’ spending in
line with its income.
A three-page memo titled “Sins of the Past and Dishonest State Budgets” argues
Illinois is in horrid financial condition because of previous legislatures’ and
governors’ “giving away benefits they knew the state couldn’t afford, deploying
fundamentally dishonest budget practices and kicking the can (or the bill) down
the road.”
The memo points to spending based on heavy debt rather than on income, and it
highlights several practices or habits.
It says the practice of using borrowed cash rather than actual revenue has been
so bad it equates to driving a freight train through a loophole in a state
constitution that nominally requires balanced budgets.
The budget memo says interfund borrowing will bring an estimated tab of $650
million. And that comes on top of another $760 million that state agencies are
requesting.
The memo also addresses the need for $1.4 billion to pay only debt service on
current pension bonds.
Finally, the memo discusses the state’s unfunded pension liabilities. Were
Illinois to make only its required payments for active members of its pension
system in the coming 2016 fiscal year, that “normal” cost to bring plan funding
to 100 percent would be $2 billion.
But there’s also the amount to pay on pension liabilities incurred by not paid,
and that comes to $4.6 billion. In all, the scheduled payment from general
revenue for fiscal 2016 equals $6.6 billion.
The memo to Rauner concludes:
“When tough decisions are put off for another day, when the can is kicked down
the road to be dealt with by a future generation, this is what happens.”
Legislators respond
State Rep. John Cabello, a R-Machesney Park, said the numbers should not be
considered a surprise, and it’s time the state focus on what he calls the big
five: the elderly, the young, the disabled, education and infrastructure.
All other state spending must be seen as optional, and Republican legislators
must be willing to stand with Rauner, who has said he’s willing to take the heat
for those cuts.
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Fortunately, there are members of the General Assembly — both
relatively new and experienced, and from both parties — who
understand the size of the problem and who are willing to get after
it, Cabello said.
“There are a lot of good people on both sides of the aisle willing
to get the job done,” he said.
But given the enormity of the problems, Cabello had one word for how
tough the coming year in the statehouse could be: “Brutal.”
Rep. Joe Sosnowski, R-Rockford, said believes the state should
look at big spending cuts and increasing efficiencies before
considering any new revenue attempts.
“I’d expect many people on both sides of the aisle will be willing
to work with the governor,” Sosnowkski said. “Certainly there are
many approaches open, and I’m willing to look at anything the
governor suggests.”
State Rep. Mike Smiddy, D-Port Byron, said while he understands the
numbers, until the governor-elect puts forth some specific proposals
he risks coming off as partisan and continuing his campaign after
the election is over.
Smiddy said everyone should understand that coming votes will test a
legislator’s resolve on behalf of all taxpayers and not just on
popular standing.
“And I’m ok with that. In fact, we absolutely have to get back to
that,” Smiddy said, stressing that leadership has to be about more
than the next election.
State Rep. Frank Mautino, a D-Spring Valley and a member of
Democratic leadership who works on budget issues, said while he
respects the governor-elect’s concern and focus, he wants to see
some numbers on the table.
“Absolutely, the governor’s going to have a very big task,” Mautino
said. “But more is possible if both sides take responsibility.”
Analysts’ views
Political analyst Mike Lawrence, a longtime statehouse journalist
and former aide to Gov. Jim Edgar, said he believes Rauner is trying
to ease way for the hard announcements ahead.
Still, Lawrence said, solutions to a crisis are often more reachable
when political power is not concentrated as it was of late, with
Democrats holding the governor’s office and veto-proof majorities in
both chambers.
With shared power comes shared responsibility, Lawrence said. And
lawmakers are more like to make difficult votes when there’s a
perception that not only is responsibility shared, but so is
political risk.
David Yepsen, director of the Paul Simon Public Policy Institute at
Southern Illinois University, concurred.
“I have no doubt this is the opening salvo in a public relations
effort by Rauner’s people, and they’re right to do it,” Yepsen said.
A lot is on the line, and the public has to be made aware of how bad
Illinois budget problems really are, he said.
[This
article courtesy of
Watchdog.]
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