Gov. Pat Quinn on pension mess: ‘Everything is on the table’
BY DAVE MCKINNEY AND ANDREW MALONEY Staff Reporters February 22, 2012 12:32PM
Gov. Pat Quinn. (AP/Seth Perlman, File photo)
Updated: March 24, 2012 9:01AM
SPRINGFIELD — Gov. Pat Quinn took his case for a budgetary crash diet directly to state lawmakers Wednesday, pushing a grim assortment of facility closures and program cuts in a spending plan that he said wasn’t built around “budget fantasies” but rather “hard realities.”
“I’m here today to tell you the truth,” the governor said during a joint session of the General Assembly. “This budget contains truths that may not be what you want to hear. But these are truths that you do need to know.”
With Illinois still deeply in the throes of a budget meltdown, the most detail Quinn offered in his $33.8 billion spending proposal — which is up 1.5 percent — focused on the painful closure or consolidation of 59 state facilities.
Chief among those closures is the super-maximum-security prison in far Downstate Tamms, a 14-year-old prison that has been hit repeatedly for its harshness and that the American Civil Liberties Union described this week as a “vessel of human suffering and sinkhole for taxpayer dollars.”
During a speech that not once was interrupted by applause, Quinn also addressed the need to cut state spending on Medicaid services for low-income Illinoisans and pension costs for state workers and teachers. But he only spoke in glancing references to the two multibillion-dollar spending pressures that have state government on the verge of paralysis, offering no specific fixes for either problem.
In not making clear how he wants to confront those problems, Quinn strategically shielded himself from having any of his own ideas shot down immediately, put the General Assembly squarely in the driver’s seat to come up with alternatives of their own and bought time to get bipartisan buy-in to a plan.
What, if anything, emerges on the politically and emotionally volatile issues from the Democratic-led House and Senate is hard to envision since all 177 legislators are on the ballot this year, and political self-preservation is on virtually everyone’s mind.
Quinn’s relative silence on pension and Medicaid fixes appeared to frustrate the top House Republican.
“So tell us what you want. Tell us what you like. Tell us what you want passed. Be the governor and introduce some legislation, and we’ll work off it,” House Minority Leader Tom Cross (R-Oswego) told reporters.
Quinn has identified the need to cut $2.7 billion in Medicaid spending next year, and the state faces a $5.2 billion tab for public pensions in the next fiscal year, triple the amount from five years ago.
“The truth is that over the past 35 years, too many governors and members of the General Assembly have clung to budget fantasies rather than confronting hard realities, especially with respect to pension and Medicaid investments,” Quinn said.
“Today, our rendezvous with reality has arrived,” he said.
On pensions, where Quinn said “everything is on the table,” the governor said, “We need to do pension reform in a way that’s meaningful, constitutional and fair to the employees who have faithfully contributed to the system.”
Quinn put the onus on a bipartisan group of legislators formed to look at the state’s pension mess to submit a report to him with specific recommendations by April 17.
With Medicaid, the program that provides health care to 2.7 million low-income Illinoisans, Quinn warned of the program’s potential “collapse” without action.
“In order to reduce cost pressures, we need to reconsider the groups who are eligible for Medicaid, the services we cover under the program, the utilization of these services and the way and amount we pay them,” he said.
Another bi-partisan working group of legislators has Quinn’s backing to offer up cuts to Medicaid, but the governor did not attach any sort of deadline to their endeavor.
Quinn did float the possibility of legislative overtime to deal with a Medicaid fix, an extemporaneous remark that drew murmurs from his otherwise stoic audience.
“Don’t plan on going home for the summer until we get this job done,” the governor said.
House Speaker Michael Madigan (D-Chicago) praised Quinn’s address, encouraged him not to sit on the sidelines on the big unresolved issues and appeared open to the governor’s suggestion of an election-year overtime session to deal with Medicaid and pensions.
“I’m prepared to spend the summer in Springfield. Springfield’s a nice town in July and August,” the speaker said.
During Quinn’s speech, there also wasn’t any clear road map offered toward significantly paying down the unprecedented $8 billion backlog of unpaid bills that the state has been pushing from one budget cycle to another as the problem worsens. Under the governor’s plan, only $163 million would be devoted toward that purpose
Quinn’s plan didn’t include any new tax increases, and the governor abandoned a push to borrow $8 billion to devote to the state’s unpaid vendors.
While most key details of the governor’s speech had trickled out during the week, one new proposal to emerge was a push to end what Quinn called a “corporate loophole” involving oil companies that do business in Illinois. They now avoid paying state corporate taxes on income they derive from oil drilling rigs in the Gulf of Mexico and other offshore areas.
Ending that break, Quinn’s administration estimated, would result in a $75 million windfall for the state.
“Part of the loophole revenue can be used to provide targeted tax relief for hard-working families and businesses across Illinois,” he said.
Besides Tamms, Quinn also wants to close Illinois’ only maximum-security prison for women in Downstate Dwight, six halfway houses, two juvenile prisons, four mental institutions and close to two dozen other offices.
The closures and consolidations are expected to net $88.9 million in savings and result in more than 1,110 layoffs, according to administration budget documents.
“The 59 closures and consolidations are hard but necessary,” the governor said. “They impact every region in our state, but the need for lower spending in our budget gives us no choice.”
State government’s largest employee union, AFSCME Council 31, called Tamms and the Dwight Correctional Center “irreplaceable” and warned the prison-system moves could pose a danger to staff and to the public.
But Senate President John Cullerton (D-Chicago) welcomed a broad discussion about facility closures.
“Everything should be on the table. If we can provide for the prisoners, if we can provide for the people who are in mental health institutions ... and house them elsewhere in an efficient way and we can save money, we ought to look at it,” Cullerton said on “Illinois Lawmakers.”
Two areas in Quinn’s budget proposal avoided cuts: veterans programs and education. The governor called for a $50 million increase in Monetary Assistance Program grants for low-income college students and a $20 million boost on early childhood education programs.
In a statement, Mayor Rahm Emanuel praised Quinn for safeguarding school funding and for his bluntness about the state’s unsustainable pension bill.
“I applaud the governor’s decision to be honest with the taxpayers about the state’s pension obligations. The hardworking families who rely on public pensions deserve honest answers, as do the taxpayers who have to honor those pension obligations. The time has come to deal with the state’s pension obligations and I commend the governor for being forthright today,” Emanuel said.
Cook County Board President Toni Preckwinkle praised Quinn’s “honest and forthright” manner in staring down the state’s budgetary pressures but questioned whether the administration is fully considering the potential toll Medicaid and human-service cuts might take on Cook County Hospital.
“It is currently unclear if that is accurately recognized in the governor’s proposed budget,” Preckwinkle said in a prepared statement.
Other top Republicans didn’t balk at the governor’s threatened closures but zeroed in on the slight spending growth in Quinn’s plan.
“It amazes me it’s taken him this long to reach the conclusion and the reality of the condition we’re in,” said state Sen. Bill Brady (R-Bloomington), Quinn’s 2010 gubernatorial opponent. “But his budget proposal today still calls for higher spending and does nothing to give Illinois families and businesses any confidence that last year’s tax increase will expire as scheduled.”