Gov. Pat Quinn today turned up his rhetoric on pension reform, blaming the General Assembly for inaction even as he heads into a rocky political fight to pass a $62.4 billion budget that key lawmakers in both political parties find objectionable.
“What are you waiting for?” Quinn asked lawmakers during his budget speech at the Capitol in which the applause breaks were few.
The Democratic governor’s latest call for pension reform came as he outlined a spending proposal that slashes education and other key programs. It’s a grim budget that would carry him into what could be a contested Democratic primary 12 months away.
“This year’s budget is a tough pill to swallow. But it’s only managing the symptoms of a grievous condition that threatens the fiscal health of our state,” Quinn said at the end of his budget speech at the Capitol. “If we are to ensure a bright future for the people of Illinois, we must cure this condition. We must enact fundamental pension reform.
“And so I ask you, as our greatest president, Abraham Lincoln, asked in this year’s film: ‘Shall we stop this bleeding?’”
Quinn also proposed whittling down the state’s $10 billion backlog of unpaid bills by closing what he calls corporate tax loopholes, a move that business groups say amounts to tax hikes on them. Quinn suggested suspending three so-called loopholes that bring in $445 million a year: the federal production activities break, the non-combination rule and the foreign divided allowance.
Quinn also opened the door to gambling expansion, something he has twice vetoed due to concerns about ethical safeguards.
“For example, any enhancement that we enact to gaming revenues this year should be dedicated to education, which could include teachers’ pensions,” Quinn said. “Of course, gaming expansion has to be done right. It must have tough ethical standards, a campaign contribution ban on casino operators, and no loopholes for mobsters.”
Quinn’s far-reaching threats to make big cuts in lieu of getting pension reform are one thing, but his track record of getting the General Assembly to bow to his will is less than most governors in his position because his fellow Democrats often don’t go along.
“This is the most difficult budget I have ever submitted to you,” Quinn told lawmakers.
Quinn delivered his plea for pension reform to a Democratic-dominated General Assembly that has failed to send him any bill to rein in the $96.8 billion debt despite his repeated demands for action for more than a year. He’s had difficulty getting the House and Senate to agree in the face of the politically risky and potentially unconstitutional task of cutting pension benefits.
The governor and lawmakers have readily acknowledged pension costs are the biggest impediment to putting the state on a firm financial footing. But neither the House led by Speaker Michael Madigan nor the Senate headed by President John Cullerton will get solely behind each other’s approach to reducing the pension debt as they struggle over ego, authorship and the right solution—one that inflicts the least pain but provides the most cost savings.
“So, members of the General Assembly, what are you waiting for?” Quinn said, challenging lawmakers and casting blame for their “inaction.”
In this year alone, the costs for the annual pension payment will rise to more than $6 billion—nearly $1 billion more than last year. It costs another $1 billion to make payments on loans that propped up the state’s annual pension payments in recent years. The impact is increasing chaos on a the day-to-day operating budget that Quinn pegs at $35.6 billion—a figure the House already thinks is too big. House Democrats and Republicans overwhelmingly approved a measure on the eve of Quinn’s speech that predicted the state will get about a half a billion dollars less than Quinn estimated.
Quinn today proposed suspending yearly cost-of-living increases for those with “higher pensions” until the pension system “achieves better balance.”
Along with the growth in pension spending, additional costs of healthcare for state workers, retirees and poor residents of the state largely push the state toward $2 billion in new spending pressure. When the House estimates new money coming in would be about $1.4 billion, the picture gets clearer fast.
Quinn proposed preserving spending on early childhood education and MAP grants for college students, even though he wants to cut other higher education funding.
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