9/11 Commemoration; Quinn Announces Closures, Layoffs; and Federal Payroll Tax Cut Offset by State Tax Hike

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.

Springfield, IL – Many towns in the 21st District recognized the 10th anniversary of Sept. 11, 2001, and State Sen. Ron Sandack (R-Downers Grove) encourages residents to take time to reflect and remember. “It is our obligation,” he said. 

Sen. Sandack participated in a ceremony Sunday at Oak Brook Library with Sen. Kirk Dillard (R-Hinsdale) and others to honor and commemorate those who tragically passed and those who volunteered countless hours of aid as a result of the Sept. 11 attacks.

State Facilities to Close?

Also this week, in an attempt to set the stage for the legislature's annual fall veto session beginning in October, Gov. Pat Quinn announced plans to close seven state facilities and lay off more than 1,900 state employees.

While Sen. Sandack said it's important to take the governor's threat seriously, it was clear that Quinn's announcement was focused more on seeking legislative authority to reallocate funds within the state budget than on actually following through.

The problem, however, is that most of the money the governor wants to shift around does not exist, Sandack explained.

At the end of June, Quinn "cut" $376 million from the state budget, before signing the budget into law. Now, he says he wants to use about $313 million of that cut to prevent the layoffs and closure of seven state facilities and also to hand out raises that he previously promised to union members. He also said he wants $183 million for unspecified purposes to be revealed at a later date.

But, out of his total "cut," $276 million came from simply pushing off Medicaid payments that the state will owe at the end of the fiscal year. That's on top of another $1.1 billion in delayed Medicaid payments that the budget already contained.

Although the governor talked about layoffs and facility closures, budget numbers provided by his administration indicated that only about $55 million of the $315 million he is seeking would go toward those purposes. In addition, he would use $76 million to hand out pay raises he previously promised public employees. He did not specify how he would use another $183 million but indicated it would be detailed in "Phase III." (With Phase I and Phase II being the cancelling of raises for some employees and the closing of facilities, respectively.)

Facilities targeted for closure were:

• Tinley Park Mental Health Center
• Singer Mental Health Center in Rockford
• Chester Mental Health Center
• Jacksonville Developmental Center
• Mabley Developmental Center in Dixon
• Logan Correctional Center in Lincoln
• Murphysboro Youth Correctional Center

While at the time of the release, not all details were available, Sen. Sandack said that shuttering the state institutions for the disabled community is likely a good thing, despite layoffs.

“The people in those institutions can likely get far better care, with far better opportunities for their growth and development at significantly less expense from the numerous private organizations that serve them,” he said.

The governor cannot unilaterally close state facilities immediately.  The State Facilities Closure Act lays out a process that must be followed and involves legislative input through the Commission on Government Forecasting and Accountability (COGFA). 

Sen. Sandack said that overall, Gov. Quinn tried to pass blame during his Thursday afternoon press conference. 

“The governor wanted to spend more than the state was bringing in, but now he’s passing the blame saying that he was forced to make these cuts and closures,” Sen. Sandack said.  

“Events are overtaking Gov. Quinn and his fellow Democrats,” Sandack stated. “Years of mismanagement have brought us here. That post-midnight tax hike was supposed to pay the bills and make all OK, according to them, and that’s not happening. Now the governor wants to shift money around that isn’t actually there. The shifting and political maneuvering is becoming tiresome.”

Sandack pointed out that if pension reform was not addressed, the tax increase will not be temporary, the costs will only continue to balloon over the years, and more of these same tactics by the governor will be seen.

“Over $4 billion was spent this year to pay for pension obligations, and over $6 billion will be needed next year,” Sandack stated. “That will continue to increase, elbowing out room for state services over the year. Pension reform is THE issue.”

Federal Payroll Tax

Also during the week, a federal payroll tax cut proposed by President Barack Obama Sept. 8 served as a reminder that most Illinois residents never saw the first payroll tax cut that went into effect in January.

That's because the implementation of the 2011 federal payroll tax cut coincided with enactment of the state's 67 percent income tax increase, pushed through by Quinn and legislative Democrats in party-line votes in January.

Quinn and his legislative allies effectively intercepted the federal tax cut and used it to finance state government, instead of putting it into the hands of taxpayers, where it was intended to stimulate the economy.

An expansion of the federal tax cut by 1.1 percent could mean that Illinois taxpayers would actually see a small increase in their take-home pay, although the bulk of the payroll tax cut would still be offset by the state's 67 percent tax hike.