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SPRINGFIELD — Illinois Gov. Pat Quinn and the Illinois Policy Institute don’t agree on much, but they do agree that the 2012 state budget is out-of-whack by more than a billion dollars, pushing unpaid bills into an uncertain future.

By Benjamin Yount

SPRINGFIELD — Illinois Gov. Pat Quinn and the Illinois Policy Institute don’t agree on much, but they do agree that the 2012 state budget is out-of-whack by more than a billion dollars, pushing unpaid bills into an uncertain future.

The Illinois Policy Institute, a nonprofit research center and free market think tank, today delivered a strong rebuke of the yet-to-be-signed state budget that lawmakers approved in May.

Collin Hitt, IPI’s senior director of government affair, said lawmakers are selling the budget as a $33.2 billion spending plan, because they are not counting $1.1 billion in unpaid bills that are being pushed into 2013.

“Thirty-four point three (billion dollars) in, $34.3 (billion) out means you retire almost no debt,” said Hitt.

Quinn’s budget spokeswoman, Kelly Kraft, didn’t dispute the numbers.

“The budget that passed is $33.2 billion. (However,) the budget does not contain substantive reductions but rather pushes off over a billion dollars of Medicaid bills into the next fiscal year,” said Kraft. “These bills will not go away and will have to be paid.”

Kraft and the IPI agree, somewhat, on how to pay those bills. Kraft said Quinn proposed a $600 million reduction in Medicaid reimbursement rates, but lawmakers “did not have an appetite” for that move. Kraft pointed to this past year’s pension reforms as another example of Quinn’s attempts to pay the state’s bills and fix the budget.

Illinois approved a two-tiered pension system that would have new employees paying more for their retirement benefits, while waiting longer to collect them. Kraft said those reforms would save more than $200 billion, over decades, but would do nothing for current state employees or Illinois’ current pension debt. The state owes $130 billion to its five government-backed pension systems — a worst in the nation.

But the governor proposed a nearly $36 billion budget for 2012, and spent much of the spring trying to convince lawmakers to spend more than the $33.2 billion, the amount on which they settled.

Hitt and the IPI insist Illinois should cut the budget to less than $28 billion.

“Illinois cannot stay on the path of what it is actually spending forever,” said Hitt. “It’s (a path) where either we have a permanent extension of record increases to state taxes, maybe further taxes.”

Hitt said Illinois would be “at 1980s levels” if the state would trim spending back to $28 billion.

The Illinois Policy Institute has released a number of reports that Hitt said highlight where Illinois could cut spending. Many of the proposals are small, eliminating urban fishing programs and ending state spending on tourism promotion. Those reports highlight the deep division between the group, which has a history of pushing for smaller government, and Quinn, who has spent his three years in office pushing for more government involvement.

Hitt said major savings, with price tags in the billions, only could be found by cutting Medicaid and pensions.

Kraft said the governor is willing to look at those cuts, but only if lawmakers are willing to follow.

The Quinn administration “continues to work with the Legislature to further address the rising costs associated with pensions and health care, two of the largest areas of spending in the state,” said Kraft. “But there needs to be an appetite to address these costs.”

State Rep. David Harris, R-Elk Grove, who helped craft the new budget, said lawmakers didn’t support Quinns’ cuts because the people affected by those cuts asked to be spared.

“We delayed payments rather than cut the Medicaid reimbursement rate because providers could not afford to get less,” said Harris. “Nobody likes (to be paid late), but everybody can live with it.”

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