One day after a House lawmaker proposed a pension reform plan that would rely on the indefinite extension of the Democrats’ 2011 income tax hike, the Paul Simon Public Policy Institute released a poll revealing that the vast majority of Illinois voters oppose a permanent increase in the income tax.
And, as the Governor prepares for a March 6 budget address, the Senate and House Republican Leaders have sent him a joint letter warning that failure to follow through on cost-saving measures in the current fiscal year will result in even greater challenges for the next budget year.
Also during the week, attorneys met in court February 20 for a hearing on four lawsuits challenging a recently-approved state law eliminating free health insurance for some state retirees, Governor Pat Quinn agreed to dole out pay raises to one Illinois union, and new Congressional corruption charges underscore the negative impact of gerrymandering in Illinois.
Republican leaders issue current-year budget warning
Senate Republican Leader Christine Radogno of Lemont and House Republican Leader Tom Cross of Plainfield sent a joint letter to Governor Quinn, House Speaker Michael Madigan of Chicago and Senate President John Cullerton of Chicago, outlining 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.
Specifically, the letter points out that the Administration has failed to reduce the state’s backlog of bills as planned, has failed to advance pension reforms, has been unable to reach anticipated cost savings during contract negotiations with the state’s largest public employee union, has not fully implemented Medicaid reforms approved last year and has also not achieved promised savings through the Community Care Program. The Republican leaders said 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 the budget concerns underscored by the Leaders have lawmakers pursuing solutions to the state’s fiscal woes, a “pension reform” proposal introduced by Representative Lou Lang of Skokie is not the way to go. The Representative proposed making the 67 percent tax increase permanent, with the additional tax revenues going toward pension payments. Representative 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.
Senate Republicans pointed out that the income tax increase was sold by Democrats as a temporary way to pay off state bills, fix Illinois’ structural deficit, and generally right the state’s fiscal ship. Extending the tax would not only be a betrayal of the taxpayers’ trust, but pointed out the additional 2011 tax revenues have not been used as promised to pay down Illinois’ overwhelming debt. Senate Republicans say that bypassing comprehensive public employee pension reform and throwing more money at the problem is not the best route for Illinois’ taxpayers—and a majority of respondents to a recent Paul Simon Public Policy Institute Poll agree.
Paul Simon poll shows public largely opposed to tax increase extension
Perhaps unsurprisingly, 63 percent of respondents to a recent Paul Simon Public Policy Institute poll oppose any proposal that would make the income tax increase permanent, as compared to the almost 29 percent who favored an extension of the tax hike. However, a significant majority of those polled did agree with one aspect of Representative Lang’s proposal—almost 57 percent favored increasing 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.
Though annual cost-of-living increases (COLA) for retirees contribute significantly to Illinois’ pension costs, 57 percent of voters polled indicated they oppose suspending retirees’ annual cost-of-living increases for six years. Voters are split 45-44 on a proposal that would apply COLA increases to the first $25,000 of retirees’ pensions. Similarly, 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) opposed that same proposal.
Lawsuits over state retiree health insurance benefits argued in court
Retiree health care benefits were the focus of a recent court hearing 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.
Previously, 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.
Though proponents of the legislation argue the state can no longer afford the high costs associated with these free health benefits, opponents say the benefits are 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’ budget problems have prompted state government to scale back in a number of other areas. However, while demands for concessions have led to a stalemate in negotiations and a possible strike by one public employee union, the Quinn Administration has handed out pay hikes to another.
The Quinn Administration has agreed to a new contract with the Teamsters Union that would give about 1,500 workers a three percent pay increase, despite the state’s deep deficits and recent credit downgrades.
Meanwhile, Governor Quinn and one of the state’s largest public employee unions, AFSCME (American Federation of State, County and Municipal Employees), remain deadlocked over a contract that expired at the end of June. News coverage of those negotiations indicates the 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
As another pair of Illinois politicians prepare for prison, the Chicago Tribune points to a silent accomplice in corruption – gerrymandering.
In a February 21 editorial, the Tribune takes aim at a system that allows 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 Governor Quinn blocked those efforts in 2011 and instead approved deeply partisan legislative and Congressional maps.