A press release from State Senator Karen McConnaughay:
McConnaughay Calls for Leadership after Budget Address
SPRINGFIELD – In response to Governor Pat Quinn’s budget address State Sen. Karen McConnaughay (R-St. Charles) emphasized the importance of leadership in these tough times for the state, she stated,
“While the Governor may have improved his rhetoric, Illinois has severe leadership and spending problems. And the two are linked, as the first intensifies the second.”
The Governor’s budget shows record high state General Revenue Fund spending at $35.6 billion dollars, which includes an increase of $1.2 billion in spending.
Karen McConnaughay
Senator McConnaughay noted,
“We were promised when they passed the temporary 67% income tax increase in 2011, that they would cut spending, reduce the pension liability and decrease the bill backlog.
“Since then, we have seen increases in spending, our backlog of bills and our deficit—and don’t forget about the multiple credit rating downgrades, making it increasingly costly to borrow money.”
When addressing pension reform Governor Quinn called on the General Assembly to put a bill before him to sign.
Senator McConnaughay stressed the need for the Governor to be an active participant in the process.
“The Governor needs to collaborate and identify opportunities to build consensus in both chambers.
“This is an all hands on deck effort that starts at the top. Leadership is sorely needed in this state and until we have that Illinois will continue on this unsustainable path.”
State of Illinois
Pat Quinn, Governor
207 State Capitol, Springfield, Illinois 62706
State Budget Fiscal Year 2014
July 1, 2013 – June 30, 2014
March 6, 2013
“Chief among the state’s financial challenges is skyrocketing public pension obligations, not just for 150,000 current and retired state workers, but for 600,000 current and retired teachers, state university employees and others around the state. While our revenues will grow by $817 million in Fiscal Year 2014, our pension obligations will grow by $933 million.”
www2.illinois.gov/gov/budget/Documents/Budget%20Book/FY%202014/FY2014IllinoisOperatingBudgetBook.pdf
http://www.budget.illinois.gov
“Total unpaid bills are planned to be reduced in fiscal year 2013 by $1.2 billion
(down to $7.5 billion).”
“Every dollar of state revenue growth in fiscal year 2014 will be absorbed by the required increase in pension contributions. The state’s 2014 budget fully funds statutory pension costs.”
“During fiscal year 2014, the backlog of bills will be reduced by $713 million to $6.86 billion by the end of the fiscal year—…”
“Pension contributions will increase by $929 million in 2014 (from $5.1 billion
in fiscal year 2013 to $6.0 billion in fiscal year 2014).”
Did you notice the $4M discrepancy from the earlier post, when describing the growth of pensions in FY 2014?
$933 million.
$929 million.
$4 million here, $4 million there, oh well.
“Pension costs have increased dramatically as a share of the budget in recent years, from 6 percent of general funds appropriations in 2008 to 19 percent in 2014.”
Page 24 of 472 has a colorful comparison pie chart that would make a nice post.
The bleeding continues.
“Employee and retiree group health insurance (GHI) is another example of a cost that has often increased faster than the overall state budget, creating a structural imbalance. GHI is categorized in the State Finance Act as a ‘section 25 liability.’ As such, payables can be deferred to a future
year—a tactic that, in the past, has been seen as preferable to negotiating employee and retiree health insurance premiums with labor unions.”
Another budget gimmick is described.
“Appropriations to the Department on Aging (DOA) and Department of Human Services (DHS) were reduced in fiscal year 2013 to $160 million below the levels that would have funded projected utilization in those programs.
“Programs in these agencies serve individuals who, because of their financial status, age and/or condition, are statutorily entitled to receive services.
“When appropriations are reduced without changing eligibility rules, the result is inadequate funding for required services.
“The fiscal year 2014 budget must increase appropriations to adequately cover expected needs in these areas, and must also make up for prior year underappropriations.
“The share of the budget dedicated to these obligations from years past increasingly cuts into state spending on higher education, K-12, economic development, public safety, transit, natural and cultural amenities, and everything else the state provides.”
We can’t allow that to happen.
It’s a vicious cycle that needs to be broken.”
Now the crime of providing overly generous pensions is layed out. Disclaimer. Not every pension is overly generous.
“Education.
General Fund recommended appropriations will increase by $472 million from fiscal year 2013 to fiscal year 2014.
However, TRS and SURS pension costs of $842 million will mean a reduced amount of state support going into the classroom itself.”
So we pay for a vacation in Hawaii instead of helping a kid learn to read. Great.
Radical Disclaimer.
Not all pensioners take a vacation in Hawaii.
“Government Services. Includes $1.1 billion of required state employee contributions.”
Is that SERS?
“Approximately 27.3 percent of the state’s all funds total operating appropriations of $62.4 billion is dedicated to education, including $5.0 billion of required pension contributions.”
I assume most of that $5.0 billion goes to TRS?
So $5.0 billion of $6.0 billion pension contribution (earlier post) goes to TRS?
Once again, overly generous pensions take precedence over paying bills and taking care of veterans.
“Debt Capacity, Issuance and Debt Service Policies. The state conducts debt affordability analyses to determine the long-term effects of debt repayment on future operating budgets. Unless otherwise necessary to offset pension liability, the state limits debt service expenditures to no more than seven percent of General Revenue and Road Funds appropriations.”
I’ve had enough.
Get rid of defined benefit pensions.
Are we trying to become the next Detroit?
They had juicy pensions at one time too, although I have no clue if they were this generous.
Disclaimer.
Not all state pensions are overly generous.
The pensions should be overhauled and reduced, the pension protection clause repealed, these people should be on Social Security like the rest of us, with a defined contribution pension or 401k to supplement.
If they want to go after the millionaires and billionaires good luck, but stay out of my wallet.