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SPRINGFIELD — An independent analyst says lawmakers were far too rosy in their assessment of the state budget when they voted this week and have left the state $1.5 billion short.
Print this storyBut some lawmakers contend that the state has enough funding. The shortfall stems from lawmakers deciding to keep their scheduled contributions towards the state's pension systems, but not providing the actual revenue needed for the contributions, according to Bukola Bello, pension policy analyst for the bipartisan Center for Tax and Budget Accountability. Ralph Martire, executive director of the CTBA, said the brunt of cuts would be directed toward community care groups that receive grants from the state. "You know who's going to get hurt? All of those community-based service providers, who provide health care, who take care of home-bound seniors, who take care of abused and neglected kids, who take care of developmentally disabled adults, those are the folks that are going to lose their jobs," he said. The budget approved by lawmakers Sunday already had $5 billion in unspecified budget cuts. If there is a $1.5 billion deficit hidden on top of that, the situation could move from dire to devastating, said Charles N. Wheeler III, a professor of public affairs reporting and an expert in the budgeting process. State law mandates that Illinois annually contribute funding for the state's pension systems. Typically, contributions increase at a gradual rate after each budget year. But this budget year, the state is required to make "ramped-up" payments totaling $4 billion, a $1.2 billion jump in funding compared to the last budget year. The "ramped-up" funding comes at a difficult time for the state, when revenues are down because of the national recession. State Rep. Frank Mautino, D-Spring Valley, said the state has sufficient revenues to make the full pension payment for the budget year. Wheeler said the state may have enough revenue for the "ramped-up" payment, but it will come at a dramatic cost to other programs, such as local schools or community care. "The people who say the revenue is there are correct, but realistically, people aren't going to say, 'No, we won't send money to local schools,' or 'We will no longer provide care to poor people.' Those are the trade-offs we need to do if we want to make cuts as opposed to raising revenue," Wheeler said. There have been a number of suggestions from policy groups, lawmakers and Gov. Pat Quinn, on reducing or delaying the state's contributions to its pension systems in light of the recession. The increasing pension payments are part of the state's built-in deficit, where long-term obligations outweigh revenues. Eva Goltermann, spokeswoman for the state's Teachers' Retirement System, said funding for this budget year was crucial and delaying contributions would hurt in the long run. "This is the worst possible time to cut funding to the pension systems," she said. "The more they shortchange the systems, the greater the payments are in the out years, because you have to pay those amounts back plus interest." State lawmakers could increase taxes to raise new revenue, but many lawmakers are dubious of a tax hike's prospects — especially with an impending election. Last week, the House rejected an income tax proposal championed by Quinn and ignored another proposal passed by the Senate. State Rep. Pat Verschoore, D-Milan, said pension payments were a primary reason why he supported a tax increase. "How can you ask somebody to pay another percent (point)-and-a-half (in taxes) but then not make a payment into the pension system?" he said. The House passed a bill last week that would institute the full scheduled payment to all five of the state's pension systems. "I think lawmakers have shown their support for wanting to properly fund the state's pension systems and meet the obligations they made years ago," Goltermann said. "This isn't just a promise, this is a statute. They have a statutory obligation. And based on that vote in the House, it appears that lawmakers take insolvency of the state's pension funds very seriously." State Rep. Lisa Dugan, D-Bradley, voted in favor of the ramped-up payment because she was tired of years of mismanagement by the state. "If we don't start, if we just say money's tight again, well we'll just say that every year. Some say we should stretch it out, but that's been done before and there's that mentality that if we keep delaying payments, well we're never get it done," she said. |
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