The General Assembly reconvened Monday and Tuesday in Springfield to try reach a resolution regarding the state’s deficit – an amount that has recently flip-flopped between estimates of $7 billion and $12 billion.
The House voted 101-7 on Monday, June 29 to pass a bill that would temporarily free up $2.2 billion in pension obligations.
The borrowed $2.2 billion would be granted to social services and it would allow the state to make its full $4 billion pension payment for the approaching fiscal year. However, that move does not guarantee funding for future years.
The plan grants social services 70 percent of the funding that Gov. Patrick Quinn initially sought when he proposed an increase in the state income tax from 3 percent to 4.5 percent.
Previously, state legislators had proposed cutting funds to many social service organizations as a means to balance the state’s budget. Members of the General Assembly said they heard an array of concerns from constituents on both sides of the issue.
State Rep. John Fritchey (D-11th Dist.) voted against Quinn’s prior proposal for a 50 percent hike to the income tax, but in a letter to constituents said that “the only sustainable source to [state] revenues will come through an increase in the income tax.” Fritchey vowed to support such a measure only if property tax relief was provided and there was a re-evaluation of education funding.
“I’m hearing from people that are taxed to death,” state Rep. James Durkin (R-82nd Dist.) said.
Illinois, the fifth most populous state, is ranked 33rd in the nation in terms of individual income tax collections.
Durkin said he’s sensitive to the issue of slashing social service funding, and advocated the need for bipartisan negotiations “to reform pensions and Medicaid” as a step in the right direction towards balancing the state’s budget.
State Rep. Michael Zalewski (D- 21st Dist.) said he supported the idea of a “two-tier pension system.” Under such a system, a new employee would not get the same retirement benefits as an older employee that might be protected under a grandfather clause. Lawmakers and union leaders in New York recently agreed on such a concept.
Zalewski also called for reform in Medicaid spending – the largest single state expense, accounting for 40 percent of general fund appropriations – and a freeze in state hiring.
The Medicaid population has grown at a rate of 7.8 percent annually between the years of 2003 and 2008, according to the 2009 report of the Taxpayer Action Board of Illinois, and if it continues at such a rate, Medicaid spending could reach $22 billion by 2019. This would account for 50 percent of the projected state budget, which, in turn, could result in a reduction in the allocation of funding to education and public safety.
The Taxpayer Action Board has called for improvements in technology, patient care, prevention, prescription drug cost-saving measures and a maximizing of federal matching funds for beneficiaries as instrumental steps to the revamping of the state’s Medicaid program.
The concept of reducing the Medicaid population does, however, come at a time in which the baby boomer generation will soon be eligible recipients. Currently, only 7 percent of enrollees are seniors, although they make up 20 percent of the shared cost.
“We are in the eye of the baby boomer hurricane,” state Rep. Sara Feigenholtz (D-12th Dist.) said.
Social services still remain the sacrificial lamb in the General Assembly’s effort to balance the state budget.
“If people think that by cutting these programs sick people will go away, they’re wrong,” Feigenholtz said.