As Illinois Crashes, Governor Delivers Rosy Outlook PDF Print E-mail
Thursday, 02 February 2012 01:36

Governor Pat Quinn delivered a rosy State of the State address Feb. 1, glossing over projections that within five years the state will face deficits that exceed Illinois' entire annual General Funds budget.

 

Although his own budget office has said the state must freeze almost all state spending, the Governor unveiled new spending and tax breaks that total more than $500 million.

 

And, after a 67% tax hike last year that took a week's pay out of the pockets of every Illinois worker, the Governor proposed "tax relief" that would give about $100 back to some families.

 

Despite massive red ink in the state's Medicaid and public employee retirement programs, the Governor gave only glancing nods to the problems. Although his own Health and Family Services department projects a $21 billion bill backlog within five years, the word Medicaid appeared only twice in his speech and he offered no specifics on how he plans to control costs.

 

Just two days before the Governor's speech, the widely respected Civic Federation issued a stunning report that confirmed what Senate Republicans have been saying for the past year: despite a 67% tax increase, Illinois continues along an unsustainable spending path that could wipe out basic state services and leave generations indebted just to cover the cost of today's programs.

 

Governor Ignored Scholarship Scandals
In the face of that bleak news, the Governor still proposed expanded spending. He promoted a college scholarship program, but failed to mention the scandal-plagued Legislative Scholarship Program. Senate Republicans have voluntary and unanimously decided to quit participating in the program. Despite claiming to oppose the political perk, Quinn was silent on the topic as he shared the podium with top Democrats who have allowed it to continue.

 

Senate Republicans had a variety of reactions to Governor Quinn's State-of-the-State Speech.

 

Radogno, Cross Give Their Perspective
Senate Republican Leader Christine Radogno joined House Republican Leader Tom Cross to offer a detailed response to the speech.

 

Both expressed disappointment that the Governor was not more honest and forthright about the major financial problems facing Illinois. They also said they would have liked for the Governor to offer some specifics on how he intends to reform Medicaid and public employee pensions.

 

Senators React to Governor's Speech
Several GOP Senators noted the irony as the Governor proposed $100 in tax relief for some families, after taking a week's pay from every Illinoisan last year. As Senator Kirk Dillard said, "The best tax relief would have been for Governor Quinn not to have imposed a 67% tax increase to begin with."

Sen. Bill Brady

 

It was a sentiment echoed by State Sen. Christine Johnson who said the Governor should "give our citizens back that one week of pay that he's already taken from them."

State Senator Dave Syverson said his main concern was how to create and expand jobs in Illinois and pointed out "we can't tax our way out of this problem, but we can grow our way out."

 

State Senator Bill Brady noted the Governor offered"trickles of tax relief after imposing the single largest tax increase in the history of Illinois."

 

Watch reaction from other Senators including: Senator Matt Murphy, Senator Sam McCann, Senator Kyle McCarter, Senator Shane Cultra and others, on the Illinois Senate Republican You Tube Channel.

 

Civic Federation Study Offers Bleak Outlook
The Civic Federation study is at least the third major report to independently verify what Senate Republicans warned last spring in their "Reality Check" budget plan – Illinois must take decisive steps to rein in spending or the state will face multi-billion dollar deficits before the end of the decade.

 

Previously, the Commission on Government Forecasting and Accountability and the Governor's own budget office confirmed that higher deficits and higher taxes are Illinois’ only options if they continue on this path.

 

One of the most jaw-dropping figures contained in the Civic Federation report is the projection that the state's backlog of unpaid bills could rise to $34.8 billion by July, 2017 – just over five years from now. That is even higher than the $22 billion cumulative deficit that the Reality Check plan foresaw last March.

 

The Civic Federation's $34.8 billion backlog was just one in a series of bad news projections contained in the report. Out-of-control Medicaid costs are projected to increase by more than 40% over the next five years, going from $8.6 billion to $12.1 billion. Significantly, the Civic Federation relied on figures provided by the Governor's own human services agency to arrive at that projection. In recent years Medicaid has overtaken education as the largest expenditure in the state budget.

 

The state's pension obligations are expected to rise by 35% over the next five years, while the cost for state employee health insurance could go up by 39%.

 

The Civic Federation warned that absent major cost controls, Illinois is not only on a path to make the 67% income tax increase approved by Quinn and legislative Democrats last January permanent, but uncontrolled growth could require even higher tax hikes.