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SPRINGFIELD  –  Illinois Gov. Pat Quinn is proposing to spend nearly $1 billion more than last year, but not a single dollar of the additional spending will go toward schools, health care, or roads.

By Benjamin Yount | Illinois watchdog

SPRINGFIELD  –  Illinois Gov. Pat Quinn is proposing to spend nearly $1 billion more than last year, but not a single dollar of the additional spending will go toward schools, health care, or roads.

Illinois, instead, will spend more on pensions for public workers and higher salaries for nearly 35,000 state employees.

The Quinn administration laid-out its new spending plan Tuesday night, the governor will deliver his budget address to lawmakers today at noon.

Jerry Stermer, Quinn’s budget director, said the new state budget is “balanced, honest, and difficult.”

Among the highlights of the $35.6 billion budget:

  • Illinois’ pension payment will rise by nearly $1 billion. The total pension payment will be nearly $8 billion, or 19 percent of the state budget.
  • State workers covered by the new contract with the American Federation of State, County, and Municipal Employees will receive close to $200 million in pay raises in the new budget. That includes back pay for raises that Illinois did not pay under a previous contract.
  • Education is taking a hit. General state aid for elementary and high schools across the state will see their funding cut by $150 million. College and universities are being told to expect a $400 million budget cut.
  • There are no tax or fee increases.

Contact Benjamin Yount at Ben@IllinoisWatchdog.org.

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7 Comments

  1. The Democratic Party is at war with the middle class

    Our state legislators, almost all Democrats, care more about government unions than our children.

    It was only two years ago Democrats borrowed billions to pay down the pension debt and then raised income taxes 67 percent after government union employees marched on Springfield, demanding a tax hike.  Evanston aldermen have raised city taxes more than 20 percent in the past five years.

    More than 90 percent of all government union campaign donations go to Democrat politicians.

    Illinois citizens have lost a ton of home equity, stock value and have been hit harder with rising taxes. And what do we get for it? Less services, more taxes.

    The Government union pension system is unsustainable and our city and state governments keep pumping more money into the pension system at the expense of the rest of us, rich and poor alike.

    A vote for a Democrat is a vote for government unions, more debt and more taxes.

    1. Pension Debt doesn’t solve problem

      There is a common misunderstanding that issuing Pension Obligation Bonds "solves the pension problem of being underfunded". WRONG.

      Issuing a "Pension Bond" just switches one type of debt for another type of debt. It's like paying off your Visa bill with your MasterCard. You may "feel" better, but you now owe MasterCard – you just increase your interest expense and buy yourself a little time.

      In Illinois, not surprisingly Pension Bonds have been misused. In June of 2003 under the "leadership" of Governor Blago, Illinois issued $10 Billion (yes Billion) of Pension Bonds, but only $7.3 Billion was invested in the Pension Funds, with the remaining $2.7 Billion used to pay interest expense and other operating expenses.

      However, Illinois taxpayers still owe $10 Billion for the bond – (money that we borrowed, plus interest)

      More recently, in June 2010 the State Legislator authorized issuing another $3.5 Billion in Pension Bonds.

      Bottom line, Pension Bonds are not risk free, don't solve the pension funding problem and effectively enables our pension funds to invest on margin. And there are fees involved. It's a shell game and the politicians do their best to "sell" their constituents that they're making responsible decisions.

      In fact, they're just "kicking the can" down the road, and guess who will pay the bills? Our children and grandchildren.

       

    2. The Democratic Party is at war with the middle class

      The public sector unions in Illinois own the Democratic Party.  Once investors stop buying Illinois' debt the party will end.  I decided to vote with my feet a long time ago and now live in Colorado.  Colorado's TABOR law limits the tax and spend liberal Democrats.  Government spending can only grow at inflation and increase in population.   

  2. Pension default

    It is obvious that the pensions will default if pension reform does not happen. By 2020, the pensions will default with no reform. Illinois cannot have 50% of its budget go to pensions, period.

    1. Stop paying?

      Reform means I don't have to pay?

      I'm for dinner reform when I go out to a restaurant. After I'm done eating,  I'll put a couple of dollars on the table and walk out. If I'm stopped, I'll have the restaurant pay for the rest.

  3. Pension mess

    Don't be fooled pension costs by a percentage of total State expenditures.  A 15 year old State law to fund the pensions fully in 50 years created this ramp up of payments now taking affect.  The law was created to avoid increases in necessary revenue when the law was enacted.  This pension funding "problem" is decades old due to a lack of political courage by State politicians to raise the extremely low State income tax many years ago.  Currently at 5% it is still very low.  However, more revenue is necessary and other than Lou Lang, what State politician is willing to admit the State needs more revenue?  

    Revenue reform is necessary.  Expanding the sales tax base to services would allow the State to REDUCE its sales tax rate and still increase revenue.  

    The Teacher pension fund underfunding is over half of the States under funded pension liability. Shifting local teachers pensions expenses back to their employers allows the State the biggest possible cost savings.  Phasing in this shift over a long period of time would give the districts the ability to budget for these expenditure increases and make them think longer when negotiationing with their employees' unions over future employee cost increases.  Because of the savings from teachers pensions fund, more State funds could be directed to the districts and that would lessen the States over dependency on local property taxes to fund education.  We currently rank 50 out of 50 is direct State funds as a percentage of total education costs statewide.

    1. Taxes too low?

      Great idea, lets raise taxes in as many ways as possible.  Let's forget that ILL taxpayers cumulative state, county and local taxes put us at the higher end of the spectrum in the nation for overall taxes.  Lets just focus on the 5% income tax rate and say we are undertaxed there, so lets raise it some more. 

      Raising state income taxes, again, adding taxes to services simply means we all will be paying more and more and more.

      While there is some merit to the argument that putting pension cost to the local district to maybe, possibly, might, keep our fingers crossed, force greater curbs and responsibility with union negotiations those local boards could also just as easily cook up schemes, like the state has done for decades, to mismanage.  I bet they mismanage.

      The school districts will tax and spend more, the state will tax and spend more, the county will tax and spend more, the local city will tax and spend more and we all will just keep paying and paying. 

      Oh, I forgot, you put great faith in the idea that higher income taxes will result in lower everything else taxes, maybe past history reflects that.  LOL!

      The state doesn't need more revenue, they need to cut spending, cut pensions.  The state has never shown integrety with the budget and their spending, they will not start now nor will they start tomorrow for that matter. 

      This 5% is too low we can raise income taxes justification is just like the ridiculous arguments about how a new tax will only cost you the price of a starbucks latte, no big deal.  Except I already have a mountain of starbuck lattes and I don't need another one forced down my throat.

       

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