REPUBLICAN LEADERS ISSUE CURRENT-YEAR BUDGET WARNING
This week, Senate Republican Leader Christine Radogno (R-Lemont) and House Republican Leader Tom Cross (R-Plainfield) sent a joint letter to Governor Pat Quinn, House Speaker Michael Madigan (D-Chicago) and Senate President John Cullerton (D-Chicago), highlighting concerns that the Administration's failure to implement cost-saving measures in the current fiscal year could make Illinois’ already bleak financial outlook unmanageable over the next year.
The letter specifically pointed to the Administration’s failure to reduce the state’s backlog of bills, failure to advance meaningful pension reform, and inability to reach anticipated cost savings during contract negotiations with the state’s largest public employee union. Additionally, the letter pointed out that Quinn has not taken the necessary steps to fully implement bipartisan Medicaid reforms approved last spring, or reached promised savings through the Community Care Program. Republican leaders say that the failure to achieve these goals could result in $2 billion in lost savings for the current-year budget.
LEGISLATION INTRODUCED TO PERMANENTLY INCREASE THE 67 PERCENT INCOME TAX INCREASE
While budget concerns persist, one legislator’s proposal to address pension debt by making the 67 percent tax hike from January of 2011 permanent has drawn criticism from many, including State Senator Bill Brady (R-Bloomington).
“We need real pension reform to address this problem,” says Brady. “We can’t fix the problem by placing the financial burden on the already over-taxed citizens of Illinois. We have to treat the root problem, not just the symptoms.”
Rep. Lou Lang’s (R-Skokie) proposal would make the 67 percent tax increase permanent and would put the revenues toward pension payments. Lang’s bill would also require state workers to pay an additional 3 percentage points of their salaries toward their pensions, and increase the retirement age for public employees to 67 before they could receive full pension benefits.
Brady and Senate Republicans pointed out that the income tax increase was sold as a means to paying off debt, fixing Illinois’ structural deficit, and righting the state’s fiscal ship. Unfortunately, these revenues have not been used to pay off the state’s debt. As Brady points out, as debt has increased so has spending.
Senator Brady called the plan to extend the tax hike a “betrayal of taxpayers’ trust,” and continued saying, “You can’t fix the problem by throwing more money at it. We have to implement meaningful, comprehensive public employee pension reform if we are ever to really, fully address this problem.”
PUBLIC LARGELY OPPOSED TO TAX INCREASE EXTENSION ACCORDING TO PAUL SIMON POLL
A recent poll conducted by the Paul Simon Public Policy Institute has found that a full 63 percent of respondents were opposed to any proposal that would make the 67 percent income tax increase permanent. Only 29 percent of respondents were in favor of an extension of the increase. However, almost 57 percent agreed with raising the age at which public retirees can receive full pension benefits to 67.
Though public employee pension reform is considered by many to be the most pressing concern facing Illinois, the Paul Simon Public Policy Institute Poll indicates Illinois voters do not overwhelmingly support some of the reform proposals recently floated by lawmakers.
While annual cost-of-living increases (COLA) for retirees contribute significantly to Illinois’ pension costs, 57 percent of voters polled indicated that they oppose suspending retirees annual COLA for six years. On a proposal that would apply COLA increases to the first $25,000 of retirees pensions, voters were split 45-44. In a similar vein, 49 percent of respondents favor a proposal to increase the age from 65 to 67 at which time retirees can receive state-paid health care benefits, while an almost equal number of voters (48.6 percent) oppose that same proposal.
LAWSUITS OVER STATE RETIREE HEALTH INSURANCE BENEFITS ARGUED IN COURT
A recent court hearing focused on retiree health care benefits in response to lawsuits challenging a 2012 state law requiring state retirees with 20-plus years of state service to pay premiums on their health insurance.
Prior to the 2012 law, state retirees with 20 years or more of service received free health insurance benefits. Senate Bill 1313 repealed the state's health insurance subsidy of up to 100% and subsequently four lawsuits were filed challenging the constitutionality of the law. Those suits were consolidated into a single case in September 2012.
Proponents of the legislation argue that the state can no longer afford the high costs associated with these free health benefits, but opponents say that the benefits have been constitutionally guaranteed. Attorneys have been given an additional three weeks to file paperwork before Judge Steven Nardulli renders his ruling on the case.
QUINN GIVES ONE UNION RAISES, DEMANDS CONCESSIONS FROM ANOTHER
Illinois’ overwhelming budget woes have led state government to scale back in some areas, while demands for concessions have caused a stalemate in negotiations and a possible strike by one public employee union. Meanwhile, the Quinn Administration has handed out pay raises to another union.
A new contract agreed upon by the Quinn Administration and the Teamsters Union would give about 1,500 workers a three percent pay increase, despite the state’s deep deficits and recent credit downgrades.
At the same time, Quinn and one of the state’s largest public employee unions, AFSCME, remain in a deadlock over a contract that expired at the end of June. Reports in media have indicated that the Quinn Administration is seeking a pay freeze and increased employee contributions for healthcare. AFSCME recently began telling their members to prepare for a possible strike.
TRIBUNE IDENTIFIES A PARTNER IN CORRUPTION – GERRYMANDERING
While yet another pair of Illinois politicians prepare to face prison time, the Chicago Tribune has pointed to a silent accomplice in Illinois’ culture of corruption – gerrymandering.
In an editorial published Feb. 21, the Chicago Tribune took aim at a system that has, for years, allowed politicians to draw their own districts and pick their own voters, saying, "...pols in Illinois and many other states rigged the majority of races to all but guarantee victory to one party or the other."
The latest in a long line of corruption cases in Illinois involves former Congressman Jesse Jackson Jr. and his wife, former Chicago City Council Member Sandi Jackson. The Tribune points out, “…this state's egregious gerrymandering aided and abetted the Jackson's long crime spree."
Gerrymandering is the process of drawing political districts in order to guarantee that candidates of one political party will automatically win the seat. Senate Republicans have long supported efforts to take the drawing of political districts out of the hands of politicians and allow an independent group of citizens to draw fair and impartial districts. Majority Democrats and Gov. Quinn blocked those efforts in 2011 and instead approved deeply partisan legislative and Congressional maps.