Please note: The Week in Review is written by a staff member of the Illinois Senate Republican Caucus and approved by legislators. It is meant to provide constituents with information about legislative action and activities during the week.
A new study by the nonpartisan Civic Federation found that while the state’s bill backlog may shrink, Illinois’ fiscal situation is still “perilous,” said State Sen. Ron Sandack (R-Downers Grove).
One reason for that may be the increased taxation and spending that’s taking place under Gov. Pat Quinn’s watch—a record that earned him an “F” on the Cato Institute’s recently issued biennial fiscal report card on state budget actions
Quinn was one of five governors to receive an “F” from the Cato Institute. The report graded 48 governors’ fiscal policies (excluding two because of insufficient time in office and, in Alaska’s case, budget “peculiarities”), with more positive scores being directed to those who cut taxes and spending the most. Governors received lowered scores if their fiscal policies relied more heavily on increasing taxes and spending.
According to the report, Quinn has adopted tax-and-spend policies that mirror his predecessor, Rod Blagojevich—”the same approach that earned Blagojevich an ‘F’ grade from Cato in 2008.”
The Cato Institute highlighted Quinn’s reliance on taxes to shore up the state budget, including the 2011 income tax increase pushed by Quinn and his fellow Democrats, which increased income taxes, corporate taxes, and estate taxes.
Cato noted, “The 2011 Illinois tax increase was by far the largest increase of any state in many years.” Not only did the individual income tax rate increase from 3 to 5 percent, the corporate tax rate was increased from 4.8 to 7 percent. The Cato Institute points out that “Businesses in Illinois pay an extra 2.5 percentage point charge on top of the basic rate, which brings the overall rate on corporate income to 9.5 percent.” Additionally, in 2012 Quinn signed legislation pushed by state Democrats to increase cigarette taxes by $1 per pack.
However, the Cato Institute also underscored that “Governor Quinn’s spending policies are similarly irresponsible.” The report noted that state spending has increased more quickly than in many other states over the last several years, and criticized the Governor’s “penchant for issuing debt to paper over the state’s budget problems.” In the past, Quinn pressed lawmakers to approve the issuance of $7 billion in bonds as a way to pay the state’s overdue bills and meet Illinois pension obligations.
However, that backlog of unpaid bills could shrink by the time the fiscal year ends next year, according to a detailed analysis of the Illinois budget by the non-partisan Civic Federation; however, Sen. Sandack said that’s only if savings targets in the state budget are achieved.
And, that’s a big “if” according to the report, which declares: “Illinois’ fiscal condition remains perilous.”
“A Review of the Operating Budget for the Current Fiscal Year” conducted by the Institute for Illinois’ Fiscal Sustainability at the Civic Federation says the state could reduce its backlog of unpaid bills by about $1.3 billion, but only if it meets targeted Medicaid savings and achieves significant cuts in health insurance costs.
Senate and House Republicans have already expressed concerns that the Quinn Administration is moving too slowly in implementing Medicaid savings to meet the budget goals. In September, Republican leaders cautioned that $350 million in projected savings are in jeopardy because of delays in implementing reforms designed to scrub the Medicaid rolls of persons who don’t meet the program’s eligibility requirements.
The budget also assumed a $250 million savings in the state’s health insurance obligations, in part by eliminating free health insurance for retirees with 20 or more years of service. Those savings have not been implemented by the Quinn Administration because collective bargaining talks have stalled with the state’s largest employee union.
The report also declared the state budget “incomplete” because it “only funds approximately half a year for group insurance and does not include $300 million of the resources needed for full funding of Medicaid costs.”
The Civic Federation, like other financial watchdogs, continued to sound the alarms over the state’s rising retirement costs. They pointed out that pension payments now total $6.65 billion, a $910 million increase from the previous year. Pension-related payments now represent more than 20% of the state’s General Funds expenditures.
On Oct. 6, Sen. Sandack co-hosted the Mortgage Relief Project with State Rep. Chris Nybo (R-Lombard) at Downers Grove North High School. The event, part of the new Illinois Foreclosure Prevention Network, sought to help struggling west suburban homeowners take advantage of programs that could help them save their homes from foreclosure. Over 200 people were seen by representatives in attendance who counseled them on matters such as mortgage refinancing, foreclosure prevention, legal rights, credit counseling and more. Sen. Sandack said he was pleased with the turn out for the event and that so many were able to receive assistance.
Sen. Sandack participated in luncheon panel on pension reform Oct. 10, hosted by the Downers Grove Area Chamber of Commerce and Industry. The event also featured Former Speaker of the House Lee Daniels, Executive Director of IMRF Louis Kosiba, and Executive Director of For the Good of Illinois Bruno Behrend. Titled “Pension Tension,” the event served as a forum for discussion of the state’s massively underfunded pension systems and what reform could be put into place in order to return the systems to solvency. The state has thus far failed to take action on the issue while the pension liabilities continue to grow each day. Sen. Sandack said the state cannot continue to delay pension reform and he hopes to see a sensible reform solution presented to the General Assembly soon.
Sen. Sandack recently presented Laura Neiberg, Vice President of Ancillary Services and Community Health at Advocate Good Samaritan Hospital, with the Downers Grove Area Chamber of Commerce and Industry’s 2012 Enterprise Award. Sen. Sandack was presented with this award last year and was honored to present it this year to Neiberg. The chamber's Enterprise Award honors and celebrates an individual who is employed by or owns a member business, and has significantly impacted the community through personal involvement while promoting economic opportunity. Neiberg has been active in the Downers Grove community for more than 30 years. She has served on numerous boards, including the District 58 Educational Foundation, the DuPage Health Coalition, DuPage Community Clinic, Worksite Wellness Council of Illinois, Medical Fitness Association, and the Downers Grove Area Chamber of Commerce and Industry.
Lastly, Sen. Sandack spoke to the West Suburban Branch of the West Side Dental Society on Oct. 9. He gave them a state of the state, concentrating particularly on the financial condition in Illinois as well as the likelihood and necessity of pension reform in the coming Veto Session at the end of November.