DISQUS

Fan of the Game · 10 months ago

State employee payroll--I may be wrong--and if I am, please call me on it--but the others are state constitutional responsibilities (K-12 Ed., pensions) or contractual obligations. The state should honor its obligations.

Sangamon · 10 months ago

Well, the word "required" in state pension funds, would be hard to get around - and that would affect me, so it stays.

Medicaid payments, I wouldn't touch those. Many times that sort of thing is life or death.

State employee payroll. No, many people aren't getting paid what they are worth, now.

So, that leaves K-12 education. The Sun-Times has a site where you can look up any teacher's salary. Some I know personally and they aren't worth a sack of spit.

Many are worth gold. But it is the one or two slackers that can really hurt a kids education.

So, that is where I would be turning a concerning eye and try to get rid of the heavy weights and recruit some young people that really want to teach.

tubbfan · 10 months ago

Medicaid and pension obligations need to be curbed. However, current obligations also need to be met. I suggest changing the eligibility for new medicaid recipients and giving new state hires a 401K/457 retirement option only.

dave · 10 months ago

None... raise income taxes instead.

Clarity · 10 months ago

State Employee payroll.... I would do away with Shared Services at the State of Illinois. I would also offer a 5 and 5 retirement to reduce the high paid state employees.

L.S. · 10 months ago

Call it what it is, there are no cuts in these areas that are both a. resonable and b. will make a real dent in the deficit. There are some cuts that are either a or b. But none that are both. We're gonna need some new revenue.

Rich Miller · 10 months ago

===I would do away with Shared Services at the State of Illinois.===

Um, that would probably increase payroll costs.

Amy · 10 months ago

state employee payroll starting with evaluating management positions with the idea to cut positions entirely, moving to restructuring management salaries with caps, and then looking at payroll in general. the highest cost to budget is generally staff. Pensions should be funded, education is the future. Health systems must be evaluated...there will certainly be savings there, but it's not the one thing.

Merit Comp Slave · 10 months ago

That's an easy one: K-12. Not student funding but the salaries of the superintendents, principals, and other managements making WAY over 6 figures. It's obscene these some of these people are making more than than the president.

carbon deforestation · 10 months ago

Requires state payments to pension funds -

Here's why. It's the only item on that choice that delays the pain for another day. This is the worst budgetary crisis we have ever seen, in the midst of a major economic crisis. All the other options hurt people directly, hurt the current economy and hurt citizens directly and immediately.

Our state pension system is also in crisis, and deferring payments is a bad idea - but the other options are worse. We need to do 2 things to resolve the pension crisis and meet our obligations: raise taxes or direct a special revenue stream for pension obligations, end the defined benefit (pension) system for all new state employees - it is simply not sustainable

Rich Miller · 10 months ago

@Merit Comp Slave, eliminating all those salaries wouldn't total nearly a billion in state dollars.

Try again.

And, remember, simple solutions are almost never either.

BandCamp · 10 months ago

State employee payroll. Using Sangamon's logic and early retirement, the payroll is stuffed w/people getting paid way too much.

I know AFSCME is a no-get-around, but Jesus...these are tough times. Some folks I know making 70-80-90K for sitting at a desk and doing computer networking/help desk... and then others in supervisory/manager roles...these people are lucky to have a job as they would be hard pressed to find one paying them that much in this area, let alone anywhere right now.

I am not for layoffs. But the distribution of state payroll is not right.

Rich Miller · 10 months ago

Either way, it ain't a billion dollar savings, and an early retirement program shifts costs to another part of the budget.

Try again.

Justice · 10 months ago

I would get rid of the automatic union raises. Also, would look hard at the K-12 teacher salaries. They are inflated considerably given their performance overall. Unionizing teachers was a bad idea from the go as was unionizing state and federal employees.

Rich Miller · 10 months ago

None of that saves $1 billion in state money. Remember, schools have a state, federal and local mix.

Try again.

bourbonrich · 10 months ago

If a billion is cut from any of these, some sort of vital and or constitutionally required service is going to be effectively ended. Some sort of across the board reduction in funding, maybe 10% FY 10 and probably 20% of what is yet funded in FY 09.

Collar Observer · 10 months ago

can't do it - need to raise a new, socially responsible revenue source. If you call this a cop out - so be it.

He Makes Ryan Look Like a Sain · 10 months ago

There is no way to cut 1 Billion cutting state employees alone. You would have to do a little from all, but even then I don't know if that would get you there.

This Guy · 10 months ago

FYI: The Shared Services thing increased payroll enormously. Managers became deputy and assistant-deputy directors and more were hired w/ admin assistants to boot; previous work locations still exist, but transplanted users simply connect back to those locations and access the same data they did before they left, etc., etc., etc.

Lose Shared Services = cut payroll.

Muskrat · 10 months ago

Payroll. Medical costs will ultimately depend on the national health care/entitlements solution. Deferring contributions for obligations already incurred (pensions) is just foolish. Education is the only other alternative on the list, and it's riskier to cut services to kids than other state services. The State needs to take a hard look at all of things it does - regulatory, enforcement, criminal justice, infrastructure, etc. and ask which are necessary, and which are just a good idea. It sounds like some draconian libertarian exercise, but it's necessary until the numbers come up again.

The Doc · 10 months ago

A cut to pension funding is the most politically palatable, especially for this group in Springfield that has mostly avoided difficult decisions for a number of years. It will have the least short-term impact.

Fed-up · 10 months ago

Your question is illogical because you know that no one area will ever be cut while others remain untouched. The pain will no doubt be spread around. The question does, however, give you a taste of our current predicament.

Cassandra · 10 months ago

Well, if I were the queen, I would shift all Medicaid costs tho the feds except perhaps administrative costs (as is the case with the food stamp program). And those administrative costs should be carefully policed and should not exceed what it costs to administer Medicare.

I think we are going in the direction of a federally funded health care system in any case, and if we can afford a trillion (going for two) to bail out the banking system, we can afford to set up a federally funded system similar to (but not necessarily identical to) those in Western European democracies.

And no, this doesn't mean that folks wouldn't be able to choose their own doctor.

been there · 10 months ago

State employee payroll is the best option.

Politically, Quinn should sit down with AFSCME and explain what he's willing to do in cutting high-paid but unnecessary management wherever he finds it (AFSCME probably would be willing to help him find it) in return for some contract renegotiation that would let him terminate documented nonperformers. If he did it that way, he'd come out ok politically.

Fiscally, he'd have to get AFSCME to agree that the goal would be to eliminate $1 billion in costs.

Justice · 10 months ago

Take a percentage from all services. Reduce state payroll by getting rid of all hires from the day Blagojevich took office. Roll back union wages. Eliminate services that are of a pleasure nature or should I say a "nice to have but not a must have" type of service and that includes shutting down historic sites, state parks, and all tourist type attractions. Immediately establish new rules for pensions, going forward, and a reduced work week, reduced pay for all personnel making over $75,000 per year. Reduce contract workers, and reduce all "feel good" programs. Next....get rid of state planes, state owned cars, and cut travel in half for all employees. Get rid of state cafeterias and cut utilities by 20% in all facilities. Consolidate facilities in Chicago and reduce the DHS workforce there by 20%, by moving the jobs, at a lower pay, back to Springfield.

eastern illinoisan · 10 months ago

None of the above. Cutting Medicaid eligibility would be really foolish at present as it would deny Illinois between $2.3-2.9 billion in additional federal funding. The federal stimulus package includes additional medicaid funding to states on the condition that eligiblity not be restricted below the levels in place in July 2008.
Cutting rates to providers, when they are already being paid very late and in many cases very little, doesn't make much sense.
The Illinois state employee/population rate is the lowest in the nation already. Many would argue that it is too low and that some critical safety functions are currently undermined by the low staffing eg. nursing home inspections, ensuring safety for the developmentally disabled in group homes, other public safety, emergency preparedness to name just a few. Additionally, given the downturn, many more Illinoisans are in need of services such as Food Stamps, WIC, TANF, unemployment benefits, Liheap, Medicaid - so now is not the time to cut staffing at local offices.
Pensions are already underfunded and stiffing them more costs in the long run.
Noone in their right mind would suggest cutting funds for education. There may be some arguments about redistributing education funding but certainly not cutting it.
The only real option to balance the budget is to increase revenues and to lobby hard to maximize federal funds from the stimulus package.

Rich Miller · 10 months ago

@Fed-up, as I explained above, this is not "illogical" at all. This first billion is actually the easiest because, as the comptroller just noted, our deficit for this fiscal year alone appears to be $6 billion.

There will be more pain besides this one little cut. That's the point of the question.

Concerned Observer · 10 months ago

I was going to say cut K-12 funding, but then I did some quick math. Cutting $1B from K-12 funding requires a slice of $1,137,656 from EVERY school district in Illinois. (yes, that's an average...still).

That's just not feasible. So it'd have to be a cut of state payroll, right? But if the average state employee makes, let's say, 60K a year...we'd have to cut 16,667 employees.

Well, that ain't happening.

So I'm going with a cut in medicaid benefits. I know that makes me a heartless b-----d, but I think it's the only feasible option of the above. We have to pay providers, or the medicaid benefits won't be usable. We have to pay pensions because it's required by the law. So...that's the only option we have.

South Side Mike · 10 months ago

Well, Rich, you said one area, so I won't do a mix of payroll and schools, just schools. Fiscally, K-12 education is ripe for plucking. Politically, the pension contribution will be the choice.

* Medicaid reimbursements to private and not-for-profit providers: Already laughably low and late, with few providers willing to accept new Medicaid participants. My wife had a follow-up appointment with a practitioner when we were on All-Family and the state paid less than $15. How much less can you cut it before no doctor at all accepts it?
* Medicaid benefits to participants- Medicaid already doesn't cover preventative care like physicals; Will it cut Rxs when someone gets sick?
* Required state payments to the pension funds- has been pushed back too many times already, and already may bankrupt the state. However, politically, I see this being palitable because, hey, we've done it for the last 20 years, why not make it 21?
* State employee payroll- still bloated, but I don't know by $1 billion this year alone. Plus the unions, who would have to take a haircut, will raise real hay.
* K-12 education- the sacred cow in every state, and everyone's afraid to touch it. Politically, this won't be done, but it should be. IL spends way too much on education for the results. Small districts need to merge, saving on super salaries and admin staff (journey of a thousand miles, Rich). Pet programs need to be cut for basic literacy and math skills. Tech budgets can and should be peeled back. Classroom sizes will have to get bigger. It's absurd that public schools can't do the job for $6500/kid when Catholic schools make do on half that amount. Fiscally, this area has the biggest bloat, because Education departments never have to do real cuts. Politicians are so afraid of the education lobby that they apologize for small increases in funding.

BandCamp · 10 months ago

Ok Rich, I change my answer.

Cut Medicaid benefits to participants. Why? Because they are old and sick anyway and it's the inherent dynamic forces that allow only the fittest persons or organizations to prosper in a competitive environment or situation. Darwinism.

GA Watcher · 10 months ago

I don't think we can afford to cut $1B in any of the areas list. We are way behind in Medicaid payments and reimbursements already. Reducing them by $1B will put additional financial burdens on health care providers and the sick.

Illinois already ranks last or near among the 50 states in support to public schools. Taking $1B from there would only increase property taxes, the most dreaded tax of all. Those salaries for school administrators which previous bloggers complained about are despicable, but they are a bigger hit on local property tax bills than they are a drain on any support the State provides.

Governors and General Assemblies of the past have underfunded State pensions for years. If it hasn't already, that problem is coming to a head.

With State employee payroll, most state agenices are woefully understaffed already. If we think State services are inadequate now, they will get worse if we cut $1B from this line item.

The answer is to raise taxes. Unfortunately, we should have done it in Blago's first term before the economy really tanked. It will be a very difficult sell now.

At least the Governor, Senate President Cullerton and Speaker Madigan have said they are willing to discuss all possibilities. Potential increases in the gas tax and the income tax have been mentioned recently. If we are looking at all possibilities, though, let's look at expanding the sales tax base. We could generate over $3B if we extended the sales tax to professional, administrative and personal services.

South Side Mike · 10 months ago

Conserved Observer, what you said just made the education job easier. I knew IL had a ton of school districts, just not that many of them. At $60K, that would be 19 jobs/district. Given that the average benefit package on top of wages should be more like $75k, and you would only have to cut 15 positions/school district, on average. Will it hurt, yes. Doable, probably.

South Side Mike · 10 months ago

Rich, did you mean Medicaid alone (for the indigent) or Medicare (for the elderly) or both?

Rich Miller · 10 months ago

Medicare is federal.

Rich Miller · 10 months ago

South Side Mike and others. You're forgetting that the state funds only a portion of schools. Cutting payroll and using those numbers as state savings does not compute.

Try again.

Cassandra · 10 months ago

Has anyone looked at the net value of offering another state employee early retirement program that is fair but not lavish.

This would indeed shift costs to the retirement systems but it likely would also allow for hiring new folks at lower salaries into those jobs (thus reducing unemployment costs to the state budget) and reducing unemployment is a major state and federal priority. And if those folks didn't need to be replaced...unnecessary jobs are eliminated sans bureaucratic bloodshed.

bockrand · 10 months ago

The state employee payroll has been shrinking ever since Rod got "elected" to his first term by gradually choking small agencies. That area is just going to get worse. 'Concerned', I don't think eliminating 16,000 state employees is that farfetched.
The employee balance will shift to look more like the actual population, the haves and the have nots; large agencies and a few small ones. This will bring state services to a crawl.

South Side Mike · 10 months ago

Rich, unless the state's funding is allocated so that it pays XX% of each person's salary, cutting 15 payroll positions to save $1 million in response to a $1 million cut from the state is closing the gap. The trick, so to speak, would be to be the first to cut, before counties/municipalities cut their contributions. Yes, this shoves more funding of education to localities, creating even more of an imbalance in school spending, but it works, temporarily.

By The Numbers · 10 months ago

Rich, this is a good question. Here is generally what it would mean:

$1 billion cut to Education
- The State currently spends $7 billion or so on education, out of about $20 billion spent in combined state, local and federal education money. $1 billion would be the smallest percentage hit on the overall education budget, but would hit hard the schools in low-income and rural communities that depend HEAVILY on state support.

$1 billion cut to Medicaid
- This would be the equivalent of cutting almost 1 million children off of healthcare.
- Or, this would be cutting all 500,000 adults off of healthcare, and then 250,000 kids
- Or, this would be cutting all seniors off of Medicaid
- Or, it would be cutting half the disabled adult population off of medicaid
- Or, obviously, some combination of the above.

$1 billion cut to state employee payroll
- This would mean probably around 13,000 layoffs

puzzler · 10 months ago

Why do state-funded colleges and universities get a pass? Does anyone know the total payroll for state workers?

Vote Quimby! · 10 months ago

State Payroll. As a state employee it is hard for me to say that, as I would probably get lopped, but it is the only thing that makes sense. You save money immediately, next year and even further down the road due to lowered pension costs. Although there are state employees who are worth their money, it is painfully obvious many are political hires or civil service lunks who have no real clue about working for a living. When I lived in Springfield I met more than a few people who would be lucky to get a job at a car wash, but made good money at the state. When hard times hit, you gotta cut personnel...

wordslinger · 10 months ago

Pensions.

The rating agencies won't like it, but who cares? They're the people who gave the Triple A ratings to the sub-prime mortgage securities.

It will cost more in the long run, but we're in an immediate, dire emergency. And as Mr. Keynes said, in the long run, we're all dead.

MikeintheSuburbs · 10 months ago

As is illustrated by the above discussion, anything you do in any particular area will trigger endless policy debates, with the result that nothing will happen. Quinn can kiss any re-election goodbye if he tries to raise taxes. Remember what happened to Dawn. This leaves what I think is the best approach, which is to figure out what percentage of the total budget the six B represents, and cut everything by that amount. This way everyone can feel the pain. What do you suppose would happen if the federal government had to balance the budget every year?

Six Degrees of Separation · 10 months ago

20% across the board cut in state personnel. This means layoffs and hard choices. Cut the hacks and make sure most of the people left standing are good and competent people, and that they are not given the tired mantra "do more with less". Reduce the scope of their jobs to what is essential to make their departments function and cut the red tape, "make work" programs and policies and fluff.

Jake from Elwood · 10 months ago

Man, I am glad that I do not have to make this decision.
A couple of points to consider:
1.Now is not the time to cease payments to the Pension funds as the equity markets are down and will eventually rise. You are purchasing equities at their 5-to-10 year lows. Buy low and sell high. A redo for future State employee pension benefits is a fix, but not the immediate "cut" anticipated by the question.
I guess my ax would fall on the level of medicaid benefits provided. Easy for me to say because my employer has decent health insurance, right?

Leroy · 10 months ago

Pensions.

You'll save the other $5 billion during the resulting state employees strike.

tanstaafl · 10 months ago

By the Numbers - Eliminating 13,000 to reach $1B only works if the ones eliminated make $76,000+ per year. The approx. payroll is 80,000, so you are talking cutting 1 in 5 employees. In reality you are talking cutting more than that, 1 in 4 or 1 in 3, since the first people laid off will be the lower paid staff (those making a lot less than $76000). If people think service in state offices is bad now, wait till that happens.

what the? · 10 months ago

For those who like to pick on state employees, consider that in FY08 the state paid a total of $4.7B in payroll (from comptroller web site - expenses by object 1120) and that is only to cover the paycheck - it does not include the state's share of social security, retirement or insurance. To save $1B, somewhere around 15% to 20% of the state's workforce would have to be eliminated - not a realistic task.

Cut Medicaid benefits. The state has expanded eligibility the last few years so roll back eligibility. Additionally, under the federal rules for Medicaid there are required services for certain classes of individuals and optional services - trim the optionals.

If i could throw an additional option on the table, look into reductions to Higher Education funding...

Concerned Observer · 10 months ago

SSM, I was looking at two separate issues. I first thought about cutting the ed. money, but decided most districts couldn't afford to lose well over one-million dollars.

I then thought about cutting state payroll, and that's where I assumed the $60K/person salary.

Just making sure you followed me there.

Good, tough question, Rich.

By The Numbers · 10 months ago

Payroll is not 80,000 - closer to 50,000.

Irish · 10 months ago

I don't know if you can realize a billion dollars in savings in any one area while still offering any type of programs in that area. The closures that were done in IDNR supposedly would have saved $2 million. So there would have to be many more such closures to get to a billion dollars. I don't know if the citizens of the State are ready to have State Services cut that much.
You gave us the option of cutting funding to education but you only gave us the K-12 option. I think there is more areas for savings at the university and college level. I really think we need to look very closely at what is spent at our State Colleges and Universities. Some of the furnighings for alumni reception centers and college deans are way over the top. I think we could cut the extravagance out of these budgets and still keep tuitions affordable and true education at a high quality. Some of these institutions are used by corporations as research and development facilities because professors, deans, and board members, also sit on the boards of the corporations. Are the schools being adaquately compensated for this service? I'll bet not. A complete audit of these institutions might well reveal an opportunity for a billion dollars worth of savings and revenues.

By The Numbers · 10 months ago

And the $75k estimate includes salary, benefits, office support, etc.

Dooley Dudright · 10 months ago

Cut K-12. (Cue copious sarcasm.) Because that's what we've done now for 35 years: the state shirks its "primary responsibility" for elementary education under a plain reading of Article X of the state constitution, and time and time and time again surreptitiously (and shamelessly) shifts it to the property tax. (Oh, and, in the meantime, also handcuffs the local districts with tax caps. And, ha, forces them to go to local referenda and beg voters for new money, ha, ha, fat chance. And, ha, ha, ha, allows exploitation of the TIF system (by what measure is the Chicago Loop "blighted", anyway?) and permit municipalities to strip revenues from the schools that way. And ha, ha, some more, allow horrible district dichotomies like New Trier and East St. Louis continue to widen, where the haves can comfortably afford more property tax and the have-nots are completely maxed out on assessed value and screamingly high tax rates already.

And why does this happen? Because as every Governor and legislator since 1973 knows, Illinois ain't got no stinking "primary responsibility" for education. For this, merely look to Blase v. Illinois, 302 N.E. 2d 46 (1973), which established that the "primary responsibility clause" of Article X does not require the state to fund 50% or more of the costs of public education.

Stiff the locals and stiff the kids. Again. So that we can staunch the budget hemorrhage in Springfield.

End of diatribe. We now return to regular programming.

Anders Lindall · 10 months ago

Rich and all,

Two pieces of very important context for those considering the slash-state-employee-payroll option:

(1) Total state employee payroll is perhaps approx $3.5 or $4 billion, so a $1 billion cut would mean the layoff of more than 1/4 of the state workforce. In terms of jobs, that means throwing some 15-20,000 people out of work. In terms of services, it would mean the release of thousands of prison inmates, put thousands of individuals with mental illnesses and developmental disabilities in the street, curtail child protection and state police, close veterans homes and state parks, etc.

(2) As many have noted, most recently President Cullerton in his inaugural remarks, Illinois already has the nation's fewest state employees per capita.

Rich Miller · 10 months ago

===we need to look very closely at what is spent at our State Colleges and Universities===

Higher ed budget has been almost completely flat for six years. That's one reason why they were excluded. It's also pretty small expenditure by comparison to the other items listed.

The choices I gave you are the real biggies. Stick to them, please.

ArchPundit · 10 months ago

Largely, I view this as a trick question. We already have spent much of the money and the bill is coming due.

In the short term we'll underfund the pensions more, but the only way out this mess is with tax increases.

==* 12:01 pm - Hynes says we’ll have a “carry over debt” from this fiscal year of $4.28 billion, plus $1.5 billion for spending that has not yet been appropriated.

IOW, we simply need to catchup on one years worth of debt next year. We aren't going to do that, so there is going to have to be a plan to:

1) Cut spending as it can be
2) Issue bonds to cover the shortfall in the short term and pay it back over time
3) reduce pension contributions again
4) raise taxes to eventually pay off bonds and make pensions stable.

With any luck, Medicaid will be fundamentally restructured under a form of universal health care and also create some savings down the road.

And remember, this doesn't include the money for things like parks that Quinn has promised to reinstate and corrections including Pontiac. Not huge costs in the overall budget, but enough to make this all the harder.

Anon · 10 months ago

Given the limited choices, it would have to be employee payroll. You can't cut reimbursements to health care providers who have already performed their services. Cutting Medicaid would result far too often in either the healthcare industry eating the costs of providing services or people not receiving needed care. Cutting education funding would throw the burden back on local property taxes, which may be ok as a long-term goal, but would be disastrous to poorer districts if done overnight. Stiffing the pension fund is not cutting costs, it is simply borrowing (which must be off the table or you wouldn't be cutting) and at a higher rate than if the state simply issued bonds.

TaxMeMore · 10 months ago

How much did tobacco tax revenues decline when the tax rates were raised? (At one point we were down $300 million from before the tax increases.) How much will tobacco tax revenues increase if the tax rates were decreased? Same with several other taxes.

Sure, buy into the line that there aren't any other options to balance the budget than your list, but it doesn't make it true.

How much does California get in tax revenues from their medical marijuana program? $300 million? How much do the states where marijuana is a fine instead of a regular crime save in law enforcement and drug war costs? Springfield just announced they will make small time marijuana possession a fine instead of a cage to save money. What if we allowed industrial hemp production like they do in Canada, who turn around and sell it to US automakers? How were our casino tax revenues compared to neighbor states where smoking is allowed? How much did our sales tax and liquor tax revenues decline when smoking was outlawed in bars and how many went out of business?

There are plenty of avenues for revenue and for savings other than your list. But to be fair, if Quinn and Illinois Democrats feel forced to stick to your list then they will find some fake short-term "solution" tax increase without trying to better manage the costs in your lists and pass along the bill to our future. That is not a solution because that type of leadersip has put us into a "$9 billion" deficit.

Yes the state can save significantly in K-12 education, but they have the end the government teacher unions and high paid administrators monopoly over education.

Yes pension payments can be reduced if we immediately stop promising the very generous packages that are more than we can afford.

Yes state employee payroll can be reduced. We don't need, and don't have right now to prove that point, a Lt Governor's office and budget. We can combine the Treasurer and Comptroller offices. We can get rid of or suspend or drastically cut the Illinois Arts Council, Sports Facility Board, Tourism advertising, government program advertising, business subsidies to the likes of Motorola and Boeing and Muntu Dance Theater and "after-school programs" (RickEy) and bloated public housing subsidies (Rezko, Allison Davis) and contracts that do more harm than good, and all the non-essential luxuries that don't directly support basic living conditions of those that need help.

The more freedom we have in Illinois, the more businesses and people will want to live and work and be entreprenuerial here. That is the long-term solution. The smallest, most efficient government taking care of the basics while protecting our inherent freedoms. Are the Democrats proposals sending us in the right direction toward freedom and prosperity, or the wrong direction toward bigger, centralized, powerful, greedy, undemocratic, freedom and economy stifling government?

lake county democrat · 10 months ago

Can Illinois simply declare bankruptcy and have a judge renegotiate the pension agreements?

bluedog demo · 10 months ago

State employees starting with IDOT. The boys in the big orange trucks. 3-4 days per week at a max unless it is snowing.

ArchPundit · 10 months ago

==#Can Illinois simply declare bankruptcy and have a judge renegotiate the pension agreements?

Nope, the State Constitution guarantees benefits awarded.

STATE WORKER · 10 months ago

Governor Quinn needs to look at all of these Deputy Directors in each agency. Some have several. If your paying a Director of an agency over $100,000 a year make then earn it.

steve schnorf · 10 months ago

Aha, Rich; some of your commenters appear to finally begin to understand what I've been saying for years. To cut significant dollars, you have to either abolish most of state government except for a few agencies, or make cuts where no one, not even Rs, would be willing to make them if your goal is to attempt to balance the state budget by going after the spending side.

Cassandra · 10 months ago

I think there is an assumption that the federal
stimulus funding is a one-shot deal. It very likely isn't. In parallel discussions about the financial industry, there is recognition of the likely need for more hundreds of billions of federal investment dollars down the line.

Lord knows I bet there are a lot of state jobs that could be cut without affecting services but in this economy, that's not the way to go. The purpose of the federal stimulus, or one purpose anyway, is decrease the need to lay of state and local government employees.

That's why getting the feds to take over something major like Medicaid (and, hopefully, universal health care) is the route to take. The feds can print money and they have shown willingness to take on major debt to get us out of this economic meltdown.

Amuzing Myself · 10 months ago

First, we HAVE To pay our bills... that is, debts to vendors that provided a service to Illinois in good faith. So that's not an option.

You can't kick old people and kids off the health care rolls. So that's not likely either.

Third, you can't just across-the-board cut state employees, because that includes state troopers and prison guards. Do we really want 10% fewer of each of those?!

Fourth, if you cut education, you're going to see draconian cuts at the local level - athletic programs, music and arts programs, drastic teacher layoffs and property tax increases.

This is a statewide problem, and I think, in order for everyone to be an equal partner in this, 10% across the board cuts in government are the best way to put a dent in the mess. You can offset cuts to guards and cops with the elimination of a large number of "Deputy Directors" and the like, many of which are political hacks with no business in those jobs anyway. To make up the rest, you put in a plan to work on the pensions without obligating the full amount this year, hoping the economy grows enough to start working on it in the next year or two.

As a proponent of efficient, common sense administration of government, when you can't afford it, you don't spend it.

With the recent years of previous cuts, if you take an additional 10% everywhere, I think you get to about as lean a government as we can expect in this state. At that point, if there still aren't enough revenues or there is a glaring need for some service, you have a decent excuse to go to the taxpayers for something reasonable - not just a taxpayer funded bailout of years of irresponsible growth in government programs and overspending, which is what we have now.

I have absolutely zero confidence this will happen, because it's going to be too hard for politicians to bite the bullet and make the tough choice. I've seen no evidence of that in my adult like. So I see no reason to expect it now.

Pot calling kettle · 10 months ago

Sorry if I repeat, no time to read all of the fine posts above...

Pension fund holiday. We've had too many of these as is, but I don't think we can cut of medical care or cut jobs now and payments to schools need to be increased, if anything. So the pensions take a hit again.

In the long run, the state needs to up the retirement age. People live longer than they did when the retirement age was set at 65, that age is outdated. People live longer and are able to work longer. This will reduce the pension liability and make the pension holiday less of a hit to the funds.

jerry 101 · 10 months ago

I dunno...start with the least painful form of layoffs. Early retirement/buyouts. Come up with some kind of early retirement package for any and all state employees.

Then, hiring freeze. Then, offer all state employees a buyout. Basically, a voluntary layoff. Anyone who takes advantage gets 6 months severance, plus help paying for COBRA.

I don't know how much that would save, but it's a place to start in terms of reducing state payroll. It should also cause less economic pain than a general layoff, which would just exacerbate the problems in the economy.

Tax increases would have to come next. Temporary increase to 5% statewide, with a bump in the exemption to reduce the impact on low income families. At the same time, start the drumbeat to amend the Constitution to get a graduated income tax. Later on, reduce the tax on most Illinoisans back to 3%, with a 6% rate on higher income families.

Increase the corporate tax rate and cut loopholes away.

Consider a small tax on services that are currently untaxed.

Consider folding more highways into the Tollway, shifting maintenance costs to the Tollway and creating a more direct user fee. The Edens, 290, 55, and 57 could all be made into toll highways.

Freeze pay rates (no COLA, sorry state employees, I'm not getting a COLA this year either)...possibly consider a "minor" across the board pay cut...say 2.5%

Increase the SUTA.

He Makes Ryan Look Like a Sain · 10 months ago

We need to bring back Schnorf. He did it once he could do it again!! (Dont forget GS)

Budget Watcher · 10 months ago

For round numbers sake, use an annual $80,000 average per employee for salaries, payroll taxes and fringes. One billion dollars would equate to more than 12,000 employees eliminated. Also, some number of those eliminated would likely be funded completely or partially from federal funds, so elimination of the those jobs wouldn't affect the state deficit. You're probably talking about job losses around 15,000 to save a billion in state dollars, or approximately 28% of the entire workforce. Job cuts and wage concessions might be a different way to get there. Tough way to go.

Medicaid is a big-ticket budget item, but it's only 50% state funded (and soon to be less), so $1 billion in cuts would only net you $500 million. Medicaid is actually an inefficient budgetary target.

The task is daunting and it should make all of us think before we enter the ballot box next time and elect leaders who worry more about getting re-elected than about managing our state with a long term focus on sustainability.

47th Ward · 10 months ago

Anybody heard from VanillaMan today? He must be deep into his research. I'll check in later to see his suggestions...

Phineas J. Whoopee · 10 months ago

I certainly would start with employee payroll. Whether I could reach a billion dollars is debatable and in some sections I would even add payroll. For example, I certainly would increase state police traffic surveillance of speeding violators by using devices that automatically register speeders and mail them out tickets.

I would cut staff where possible, transfer funding responsibility to local governments where appropriate, privatize where necessary and look for new revenue streams.

I have never worked in State Government, however, I am confidant I could find your billion dollars with about a month of review.

Lefty Lefty · 10 months ago

Aren't IL pensions underfunded by tens of billions already? What's another billion?

Independent One · 10 months ago

Cut state employee payroll. What are they earning and what are they worth? Reduce others wages in this area. Next cut back on school employees (upper paid). I saw much of Monday's pay scale for Chicago. Who is worth $400,000? Who is worth $300,000?

Just an opinion · 10 months ago

Does the public know that whole families are employed by the State of Illinois. I wonder why it is so hard for the state to hire new employees, when families have aunts, uncles, and children that need jobs. Hey, unfair is unfair. I also think it is very ironic that part-time state reps. make about $70,000+ with their recent raise. Senators make over $80,000 per year, what a good part time job! In my opinion the legislators should step up and do the right thing, go back to a daily wage, and get paid for the two months or less that they really work. How many years does a legislator have to work to have a full pension, and their health care is very low. They do not take care of the regular citizen. Let's get together and pass some more silly laws, when the ones we have aren't even enforced!Just busy work in Springfield!

TaxMeMore · 10 months ago

"Third, you can’t just across-the-board cut state employees, because that includes state troopers and prison guards. Do we really want 10% fewer of each of those?!"

Yes we do. Do you want to continue paying to lock people in cages for possessing small amounts of marijuana? And losing their productivity and tax revenues while they are locked up and from reduced potential earnings because of the stigma of small marijuana possession conviction? Maybe Barack Obama would be better off today if he had been caught with marijuana and jailed like the tens of thousands of youth across Illinois every year that weren't as lucky as him? Yes we want to reduce the state poliece and prison system by at least 10% and start treating drug addiction from a healthcare point of view instead of a lock them up and throw away the key point of view.

publius · 10 months ago

i want to reinforce budget watcher's point---since medicaid is part grf part federal funds a billion dollar cut of state money would result in a spending cut of 2 billion---they already pay too little too late---we are a low tax state----the truth is we need a real tax increase---time for those with responsibility to tell the public the truth

Reality Check · 10 months ago

Yes we want to reduce the state poliece and prison system by at least 10% and start treating drug addiction from a healthcare point of view instead of a lock them up and throw away the key point of view.

Treatment costs more than warehousing (which thanks to Rod's neglect is essentially what state prisons do anymore). So you're talking about an increase, not a cut. Thanks for playing.

Rich Miller · 10 months ago

10 percent ain't gonna do it.

Let's stick to the question and provide real answers, please.

Stayathomemom · 10 months ago

Are there other options out there? I hate to see people getting laid off, and I hate seeing people get pay cuts. Are there lots of small things that we can cut but won't effect a large number of people?

We Can Hope · 10 months ago

Headcount - in general terms, there were 65,000 state employees under the Governor's control when Ryan left office. Approximately 12,000 took early retirement (includes agencies not under the Governor). Last figure I saw showed headcount at agencies under the Governor at 56 - 57,000. To get it out of headcount would require, for example, eliminating the entire Department of Corrections.

Rich - not only was this a great exercise, appreciate the way you moderating it, correcting those who exhibited the mental of a radio talk show callers ... or otherwise assuming miracles.

Rich Miller · 10 months ago

===Are there other options out there? ===

Those are the biggest budgetary items. Take your pick.

Budget Watcher · 10 months ago

Another problem with Medicaid cuts is that the program will grow annually by around $350 million or maybe more (state only) without doing further actions. Medicaid and SCHIP rolls have to be swelling due to the severe recession, not to mention inflationary pressures which are significant.

Medicaid cuts would have to be draconian. Further short funding of pension contributions would be incredibly irresponsible. There's almost not enough employees to available for the state to cut. This new governor, even with the federal bailout money (note, I don't refer to this as stimulus), is facing an almost insurmountable problem without resorting to a tax increase. Maybe the G.A. would reconsider the GRT idea if pitched by someone other than Blagojevich:)

Amuzing Myself · 10 months ago

Oops....meant $35 Billion

wilecoyote · 10 months ago

First of all, the Stimulus funds are to be used for infrastructure (roads, bridges, levees, school renovation). It is not intended for deficit reduction but for job creation and most of it is to be sent to local governmenst after the State takes their cut. Also, the K-12 funding mix usually means more unfunded mandates imposed on local govt. by the State.

Rich Miller · 10 months ago

Pension fund payments.

Just the "ramp" increase for next fiscal year is $1.2 billion. Redo the ramp over the subsequent years.

Again, that's just the "easy" one, and it ain't so easy. $5 billion to go if the stimulus bill passes. $8 billion if not.

South Side Mike · 10 months ago

Well, thinking about it some more, I realized I was addressing benefits paid by Medicaid. The state could save some money by cutting the rolls. First, roll back the legal and illegal expansions of Medicaid. Yes, there might be additional federal dollars lost, but if the state saves $100 million, it's still saving $100 million.

This is a good question, and yet by limiting it to one of these areas, there will be some talk radio-esque responses. I would second the notion of putting the detailed state checkbook online (or for all disbursements >$5000). It might just prevent a few checks from folks like Rickey Hendon to "preferred" after-school programs that serve two people.

The state will likely need a tax increase in addition to severe cuts. Nobody should be happy, but that's going to be the punishment for a few decades worth of avoiding the real revenue and spending reform. Quite sobering news.

Phineas J. Whoopee · 10 months ago

I find it hard to believe that after the two most corrupt Governors in our state's history that the budget and payroll is so lean, however, I know there are far more people on this blog in tune with the state's finances than me so I would give them the benefit of the doubt.

The problem is the voters don't believe any politician right now and will strongly punish a tax increase.

cermak_rd · 10 months ago

K-12 Education. The locals won't raise their property taxes to make up because they can't in a downturn and they know it. So schools will have to improvise. Maybe have one teacher teach two grades at once or use distance learning to combine classes in different schools or even across districts. Also might spur small rural districts to consolidate.

Sick of it · 10 months ago

instead of just an early retirement allow any state employee to buy service time. That would provide an influx of money into the retirement system while the markets are low and potentially let the state cut it's contribution somewhat for the year.

VanillaMan · 10 months ago

I would cut a billion from each of them, and save $5 billion.

There are no sacred cows here.

* Medicaid reimbursements to private and not-for-profit providers - I would sit down with providers and come up with a figure that would pay them enough to stay open and get a check immediately to settle the accounts.

* Medicaid benefits to participants - I would implement tougher means testing and limit procedures allowable for benefits. I would limit Medicaid to under 18 years of age and to those over the age of 75.

* K-12 education (state portion of state/federal/local funding mix) - I would cut the state portion by $1 billion and let the school boards figure out how to survive on their own. I would close schools identified as having failed test scores. They have had years to make their schools work, and it is time to close the crappy performers and shuffle the resources to schools that educate.

* Required state payments to the pension funds - I would cut $1 billion from the payments owed. I would restructure the repayment plan and meet with officials to reduce pension costs. This is one of our structural deficits that have to be completely gutted. It cannot be saved as it is. So I would cut $1 billion this year to start that difficult project.

* State employee payroll - This is the most difficult part because we do not have excess here. But I would start by shutting down Chicago state offices and relocating them to Springfield. I would shut down the Thompson Center and sell it. Those who wish to be employed by the State of Illinois will need to work at the state capitol of Springfield. The Springfield cost of living is significantly cheaper than Chicagoland and salaries and benefits would reflect Springfield costs, not Chicago's - for the $1 billion is savings.

Everyone has to take a hit. There are no sacred cows in Illinois. By answering today's QOTD in this manner, I am displaying a recognition of the severity we face, the severity of the disfunction currently within our state government, and a need to completely reform state government by using this fiscal crisis to spur a new direction for Illinois.

We are broke. Our state has been underperforming for a decade. We must have radical change now, or we risk becoming another Michigan. There is no future here unless we stop extorting wages in the form of taxes from our citizens for a government that does not function. Demanding more taxes is not an option.

OK - you can all play "holier-than-thou" and go Blagojevich on us by posturing that my ideas are unworkable, heartless and evil. But you know where Blagojevich lives, right? Not in this world. Time to live in this one, right?

And, look - if you follow my ideas, everyone will know that everyone is taking a hit. We'll also have $5 billion to mend the holes in our fiscal situation. But even if we do squeeze out $5 billion out of these five areas, if we do not reform our structural deficit, we will not be better off in 2010, 2011, or 2012. Look at what has happened...

We had an economic boom. Our national economy grew to it's largest extent ever - but Illinois didn't boom. Our structural deficits were already tanking our state, even during the good times. We have to fix our fiscal structure or we are throwing good money at black holes with no improvement.

Today's crisis is the time to address these problems. No one is going to win. Everyone takes a hit. State government has to get skinny. Now.

Yellow Dog Democrat · 10 months ago

- Parole all non-violent drug offenders (that's roughly 13,000 @ $40K per head), place them into community-based monitoring. Savings: $520M. Added cost: $100M. Net Savings: $420M.

- State employee payroll: $580M, split between:
--- $300M Renegotiation of all employee contracts, rolling back salaries (but not benefits) to preserve headcount.
--- $280M Elimination of 2500 - 3000 Administrative positions, with atleast 500 coming from the governor's political appointees.

Yellow Dog Democrat · 10 months ago

Ah, Steve Schnorf, voice of wisdom.

Rich, will we have the revenue question tomorrow?

Cynic · 10 months ago

Another vote for state payroll. There's a lot of money wasted on personnel that are inefficent, incompetent or both. From what I've seen, the 80/20 rule definitely applies (20% of the people do 80% of the work).

The savings isn't limited to just salary -- it's also benefits (primarily health insurance and pension) and overhead costs. The $1B figure might be a bit high, but I imagine one couldget pretty close with no discernable disruption of services.

TaxMeMore · 10 months ago

"Treatment costs more than warehousing (which thanks to Rod’s neglect is essentially what state prisons do anymore). So you’re talking about an increase, not a cut. Thanks for playing."

Drug addiction and recreational drug use are not the same things as we see everyday with alcohol. And there are no marijuana addicts that require us to pay for their treatment. So yes, we are talking about a big cut. Thanks for playing.

lake county democrat · 10 months ago

Arch: It's in the state constitution? Wow, I'm starting to the constitutional convention might not have been such a bad idea after all!

Ok, how about the Daley/Blago approach: how much would Illinois State Beach Park fetch? What if we throw in a casino license?

cynically anonymous · 10 months ago

At the least, start with state payroll. Only start from the top. DHS, for example, has a whole lot more "Executive staff" making over $100K than it ever did before - and a whole bunch of them don't do much of anything. I know that's only a drop in the bucket, but you've got to start somewhere. And if you get rid of the excess at the top, you can also eliminate a number of contracts that were given to friends and families, and all the contractual workers that were hired at huge salaries so the position doesn't show up in the count of "state employees".
Just a thought.

Reality Check · 10 months ago

@ TaxMeMore

You said you wanted to change the system to treat drug offenders instead of simply incarcerate them. That has a (sizable) cost.

Now you seem to be claiming you simply want to release drug offenders. That, of course, would not require added investment in treatment programs. But it is not what your first post advocated. Further, I don't think you would get a lot of public support/political will behind simply putting drug felons back into communities with no treatment.

IMO we do need to expand treatment programs for drug offenders. But we need to understand and accept that creating such programs requires investment by the state. It will likely yield long-run savings but it incurs significant start-up costs.

Little Egypt · 10 months ago

Take the Medicaid system back to where it was before Blago. Remove those who have been placed in the system because of going around JCAR, especially people who can afford health insurance at a much higher rate but are riding the State's gravy train. As I recall the high salary for qualifying for the "new" family plan was $80K. They can pay their own insurance.

Change the LEGISLATIVE pension system to keep people like Granberg from working one day on the State payroll and increasing his pension by $40K per year.

Limit the salaries for administrators in the Illinois school system. Small districts must consolidate with larger ones. If you have a school system that has only 500 children or less, everyone would benefit from consolidating with a larger system.

Privatize the State pension system (may be the wrong word here) but put all new hires into a 401(k) and at least stop adding new people to an already broken system. This will eventually happen to Social Security so it may as well happen to anyone in a State retirement system (and that includes legislators).

I agree with Quinn when he says State agencies need to be "fumigated". I interpret that to mean the political hires, the ghost employees. There are those who have legitimately gone through the Civil Service System and are properly placed in State positions. They shouldn't have to lose their jobs in order for a political hack to keep his/hers.

Privatize the Thompson prison. In fact, let outside companies build more prisons as we need them and let's get out of the prison business. I'm betting the prisons could be run more efficiently than the State runs them. Guards would keep their jobs - they just wouldn't be State employees any longer.

Finally, raise the income tax for a limited number of years. Make Blago's prediction come true. I can't help but believe Blago would have had to do this either this year or next. If he didn't, heaven knows what kind of condition this State would be in without it. He has been pretty proud of the fact that he hasn't raised (income) taxes but in a perfect world, could he have been re-elected to a third term if he didn't. People can deal with the financial reality we are facing in all aspects of our lives and I believe they could deal with an income tax hike as well. With unemployment as high as it is and rising, I'm just not sure if we would realize a net increase with an income tax hike. I think one will minus out the other.

Cheswick · 10 months ago

State payroll. Keep the workforce the same, but give them a one-day a week mandatory furlough. Their salaries - whether hourly or salary - get cut accordingly. In theory that would cut payroll by one-fifth. See how much that would put back in the state coffers for a year.

(This is not an original idea as I believe it's what they're going to do in California.)

Reality Check · 10 months ago

Cheswick - Not possible. You can't go a day without state police, child protection workers, prison employees, nurses in veterans homes and mental health centers, etc. These are 24-7 operations.

Anyway, even if it was possible, which it ain't, you're only proposing a 1/7 reduction to state payroll. That'd equal about half the billion dollars Rich asked you to cut.

Arthur Andersen · 10 months ago

Sick, Federal law doesn't allow the purchase of unearned service, or "air time" unless it is part of a statutory early retirement program.

The only way to build an ERI that doesn't hurt SERS would be to have the employee pay the full cost for both he/she and the State; that number would be prohibitively expensive for most State workers, easily exceeding a year's pay for the purchase of only three years of service.

Rich, the $10 billion POB issue is now under water, all the systems are less than 50% funded, and the 3 State systems are the worst of all. Cutting contributions or re-ramping is the worst possible option at the worst possible time. IF the State doesn't have the cash nor the will to raise sufficient revenue, a bond issue should be seriously considered. Not a taxable POB-no liquidity in the market. Just a straight, level pay, short maturity, GO Bond, to cover this year's increase. Concurrently, no mumbo-jumbo about "this is like refinancing your house," or "we're just recharacterizing the debt" will be allowed.

Failing that, go after payroll, and I don't mean the good workers at AFSCME or in other bargaining units. Broaden the cuts to higher ed, where the average "academic professional" is well into six figures, and K-12 administrators (see "Platinum Parachute" in Monday's Sun-Times)and the savings meter will add up faster than the total on a gas pump hooked to a Hummer in July.

tanstaafl · 10 months ago

Cheswick - Are you also willing to work only 4 days a week and take a 20% pay cut?

Cheswick · 10 months ago

Reality, Don't most people work a five day work week? Anyway, I didn't mean everybody would have the same day off, or that a department would close on the furlough day.

So, for the furlough plan to work, I guess we'd have to cut some of the workforce off the top.

Cheswick · 10 months ago

tanstaafl, I said mandatory. It wouldn't be voluntary.

stallion · 10 months ago

The State needs to take the lead from the private sector...I would bet that most the people in the Thompson Center do not need a office to come into...they can do the same work from home or the road on a lap top...Almost 100% of meetings can be done on the phone or net meeting....Close a few of the State run hospitals and sell the land...I think there is about nice piece of land in Tinley Park worth about 500 million. Staff reductions would come from the closings...Sell the Thompson Center....no idea what that would be worth.....There are many options out there....change the way you do business...Think out of the box.

tanstaafl · 10 months ago

Cheswick - Are you a state employee who have his pay cut 20%?

I find it interesting that many people think the state employees should take furlough days w/o pay, but these same people do not want their jobs cut.

Irish · 10 months ago

To those who would cut state payroll; I would ask if they are really ready for the consequenses of such an action. During Governor Edgars Austerity program deep cuts were made in the State headcount. Within the next year or so there were several terrible cases of neglected children discovered in Chicago. Everyone wrung their hands and said Oh my how could this have happened. It happened because the case load of each DCFS employee had doubled because of the cuts in headcount and they were not able to handle them all. So before you say payroll should be cut ask yourself if you are prepared for one fifth fewer state troopers on the roads, one fifth fewer employees at the DMV's. Towns with populations of 25,000.00 or less would probably not have their own DMV. There would be garbage and litter at the parks and recreation areas and probably no facilities if they were open at all. Lines for job service and unemployment assistance would be a lot longer. You might have to drive many miles to find a Job Service office. Repairs to roads and signs along the highway would be minimal. Less EPA oversight will probably mean more polluters and a degradation of our water. Etc.Etc. I am not saying that state employees are off limits. I am just asking if those who would cut them are prepared for what will follow. It has been my personal experience that most people do not grasp the corelation between less state workers and less services. I have heard many people comment that cuts should be made, and then heard those same exact people ask " Why don't you offer this anymore?" or " Why is that closed it didn't used to be?" or " Why does the KOA have a pool and you can't swim here." So remember the old adage," Be careful what you ask for you just might get it"

tanstaafl · 10 months ago

Something people who suggest staff cuts / furloughs should consider. IT services run 24/7. Right now there are many areas where there is only 1 person who has operational knowledge of the relavant data systems. These people already are essentially on call 24/7 putting in OT when there are system failures. If you start cutting staff, when problems arise (as they will) downtime will be lengthened due to lack of staff with expertise. If the person is off on furlough day, time and a half will have to be paid to call that person in to fix the problem.

steve schnorf · 10 months ago

Most of our state spending in Illinois is pass-thru; grants to community agencies who provide mental health, DD, adoption services, etc, Medicaid payments to vendors, school aid grants, etc. We have the lowest number of state employees per capita of any state in the Union.

It won't be at all easy. If some of the stimulus money can be used as replacement dollars, we might get 400 or 500 million GRF from education.
We might (MIGHT) save some more from Medicaid by slightly lowering certain provider rates, but its an inefficient savings because of the increased FMAP under stimulus.

You could probably do an across the board cut in non-entitlement lines and pick up a hundred million or two. If the agencies cooperate, and are given some flexibility they could probably live with that.

Based on my experience, the state will never get a salary freeze, much less a reduction thru AFSCME, but if you could a one-year freeze might save around a hundred million.

Tinker around some more and we might get another hundred million or two from misc cuts and changes, but we're about done as far as I can see.

If you're serious, you then start eliminating agencies, boards, and commissions, but you would have to eliminate 40 or more to get another 500-750 million GRF.

My overall take: it can't be anywhere close to done on the spending side. Unless, of course, we have VM take it over, talk to a few people like he suggests, cut checks from empty accounts, and so forth, and it would be a snap.

Little Egypt · 10 months ago

The State needs to change the budget process so that at the end of the fiscal year, agencies do not lose any surplus money they have. What happens now is a spending spree the last month of the fiscal year. Let them keep the surplus instead of losing it. It wouldn't save a great deal of money but would stop the wasteful spending on furniture and other "luxury" stuff the agencies can do without.

jerry 101 · 10 months ago

Rich's idea to push off funding the pensions into the future is probably the best idea in this economy.

All of you who are advocating slashing and burning payroll through massive layoffs are going to make the economic problems in this state worse, including inflicting further harm upon the state's budget.

If you tear a billion dollars worth of salaries out of the budget, then that means that we lose about $30 million in income taxes, so you really need to cut $1.03 billion.

Inflicting unemployment on that many people also means loses to sales taxes and gas taxes (they won't spend as much, and they won't be driving to work).

So that's probably another $60 million in state revenues lost, so you're up to $1.1 billion.

If What the @ 12:22's figures are correct, and total salaries were $4.7 billion in Fiscal 08, then fiscal 09 salaries would be a baseline of $4.84 billion (3% COLA, no further growth). Eliminate that cola, and there's $140 million.

A further 3% reduction in salaries, across the board (not necessarily feasible, but...) would represent another $140 million. So, there you are at $280 million.

So, if you do an early retirement package, then you shift some costs to the Pension system, but you could clear out a lot of people at the top of their salary ranges.

If there are 65000 state employees, the current average pay rate is $72k. If 2% of employees take advantage of early retirement, then you'll save about $50 to $100 million. Depends on the terms of the buyout package.

$330 million.

Instituting a hiring freeze probably won't go far. Aside from retirees, we probably won't see a lot of people voluntarily leave their jobs in this economy.

So, part of the problem has to be solved by adjusting how state money is passed through to localities. We have more units of local government than any State in the country, If I recall correctly.

While a lot of those local units support themselves through funds from local property taxes and the like, many do get state money (such as schools, which get a portion of their revenues from the State).

By consolidating the number of districts, we can save money that is being passed through. Consolidate high school only school districts into the nearest k-8 district.

That will eliminate some positions in a more targeted manner than broad slash and burn layoffs would. High level salary positions like superintendents will get hit all over the state, and many will have the opportunity to take early retirement.

Delay some payments into the pension system, even though now is the time to "buy low" - unfortunately, we got nothing to buy with.

Systematic savings may be achieved through moving more roads into the tollway system as well. Gas taxes can be used for state highways and local road projects, and the tollway, which charges a direct user fee, will be responsible for maintaining the roads that fall under it's purview.

The rest is going to require a tax hike, preferably an income tax hike.

tanstaafl · 10 months ago

Jerry 101 - Add to your costs of slash and burn the amount of unemployment which the slashed positions will draw. This will decrease the savings.

Cheswick · 10 months ago

tanstaafl, Hey, I'm just trying to answer the question. The fact that only 1 person has operational knowledge of a job is another problem that we never should have got ourselves into.

steve schnorf · 10 months ago

Pushing pension funding off is how we got here. If we hadn't deferred pension payments in the past, our pension spending next year would be down the better part of $3 billion.

tanstaafl · 10 months ago

Cheswick - we got into that situation due to the former Gov's policy of not filling positions when people left. He would then brag about how he reduced head count.

You still haven't answered my question to you. If state employees are going to take a 1 in 5 day furlough, will you also take a 1 in 5 day furlough?

Six Degrees of Separation · 10 months ago

I would venture many of the better state employees would find work elsewhere if faced with an across the board 20% pay cut....leaving a less competent, less experienced work force behind. Good performance should be rewarded, and bad performance should be dealt with. That's why I suggested a targeted 20% reduction in the overall state work force rather than a draconian pay reduction for all that would render all state services less effective.

Little Egypt · 10 months ago

Rich, I'm reading a lot of good ideas here. We can always hope that the legislators are reading this.

Pot calling kettle · 10 months ago

State payroll could probably be cut, but it would take at least a year or two to do it properly. Each department would need to be examined to determine where cuts could be made and what the impacts to government services would be.

Our last Gov. cut headcount, but cut from the lower wage bottom and added to the higher wage top. Even though he made a big deal about lowering the number of state employees, my understanding is that the resulting savings were minimal.

It looks like the whole structure of employment in the state needs to be repaired (front line vs supervisory staff as well as which departments are over staffed and which are too low). Until that task is accomplished, I don't see how you can save serious money without risking serious harm which would have a high cost in the long run.

Likewise, cutting medical care for the poor and eduction for everyone has very serious long term consequences. I do not know much about the medicaid system, so I leave that to others. The schools have been underfunded OR incorrectly funded for years. Cuts to education are a bad idea. The main area for cuts would be admin, and if money could be saved there, it should be redirected to the classroom.

The pension system is in trouble for two reasons: underfunding & too-early retirement. While cutting funding for a year or two is not a great idea, the impact can be offset by raising the retirement age to 68 or even 70. The number of people living into their 70's and 80's is much higher than it was when the retirement age was set at 65 and the system is not structured to accommodate all of those retirees. Given a choice between losing their job and having to work a few extra years, I think most people would take the latter. This solution can be put into place more quickly and with less long term impact than any of the others.

Yellow Dog Democrat · 10 months ago

FYI, the most recent headcount of state employees i can find is 63,000. That was from FY '04, but I think its still pretty close.

Steve Schnorf would be my pick to head the Office of Management and Budget. That out to save us about $500 million. But here's some other moneysavers, that look at the whole spending equation: not only appropriations, but also tax expenditures:

Cap the sales tax reimbursement for retailers. There's another $50M (I wouldn't go as far as Meeks and eliminate it completely).

Pass all of the $400 million in corporate tax loophole provisions that have been on hold, now that there's a grown-up in the Governor's office.

Sales Tax Reform:
- Lower the overall state portion of the sales tax from 5% to 4.5%
- Expand the sales tax base to include consumer services
- Close the exemption on goods and services purchased over the internet
= $1.5 Billion in revenue

Pension Obligation Bonds ($16B borrowed over 40 years at 6%) - $320M a year in interest payment savings

Bill · 10 months ago

Don't cut anything. Raise some taxes. Lot's of them.

WCIL · 10 months ago

Cut the state payroll but do it from the top down. Cut the highest paid employee from each office. We all know the little people are who does the work anyway, why cut a lot of them when we can get rid of some high priced deadwood.

eastern illinoisan · 10 months ago

I guess quite a few are not reading the posts before them. If we cut Medicaid eligiblity below the level it was in July 1, 2008, we loose $2.3-2.9 billion in federal funds. Plus if we cut Medicaid by $1 billion, we loose $500 million in federal funds. So suggesting that we roll back eligibility to pre Blago times or pre the last expansion etc will cost us not save us.

Vanilla Man: there are a variety of eligiblity categories mandated under federal law. They include persons with disability, persons receiving TANF, pregnant women. So you can't limit to children and those over age 75.

What the?: The mandatory services are the expensive ones - hospital, nursing home etc. The optionals which Illinois has previously cut and then reinstated save virtually nothing (like less than $10 mill) except for dental and dental for children is required and the dental package for adults is really puny and to cut it you have to be willing to say that seniors in nursing homes can go without dentures. Some states like Missouri have indeed cut some optionals like prostheses but most of us think it is pretty draconian to say to a poor amputee "buy your own leg." Rx is technically an optional but we already have a 3 drug limit before medical review and no state has cut off drugs. It wouldn't make sense, those needing them would then be in the emergency room.

Are there a few areas that we could cut in Medicaid? - yes a few and maybe we could wring $75-100 million out of the program, which would save us half that amount as we get a 50:50 federal match.

Anyone that knows much about the Illinois Medicaid program will tell you, there isn't much fat there. Funding healthcare for those who most need healthcare (persons with disability and seniors and pregnant women)costs a good deal of money. Illinois is a below average cost state - not as low as Wisconsin or CA but pretty low and the administrative cost is very low. Claims processing which is all done in house here in Illinois is the most cost effective in the nation.

So while ideologically, some may like the idea of "cutting Medicaid" - it isn't a realistic option if you need to reach a figure like $1 billion in savings.

Cheswick · 10 months ago

tanstaafl, I don't work for the state. To answer your question, I have had a job where I was forced to take a pay cut without a reduction in hours. I've also been unemployed.

VanillaMan · 10 months ago

Vanilla Man: there are a variety of eligiblity categories mandated under federal law. They include persons with disability, persons receiving TANF, pregnant women. So you can’t limit to children and those over age 75.

Yeah, I knew that. I don't have a problem with these mandated rules when I posted earlier.

Jerry 101 - your dire predictions only come true if those laid off never find work. That doesn't happen. You can easily half those figures.

Reform Now! · 10 months ago

I have always been baffled by state and local pensions. No one in the private sector has a constitutionally protected right to a pension. 31 states have various government pension protections embedded in their constitutions.

Why should government workers, regardless of how hard working, dedicated, etc. some my be)above all else have a pension right none of the rest of us have? There are plenty of hardworking people in, for instance, the nonprofit sector who are paid less than government workers and have no right to a pension.

When companies are in the dire straights that our state is now in, they can declare bankruptcy and get rid of their devastating pension obligations. State and local government have no such recourse.

Think about it from a good government perspective: If government workers didn't have pension rights and came into government for the same reason that people pursue other callings, would we not have fewer people doing nothing but hanging on till they could collect their pensions?

Okay, government workers hanging out here (rather than working), have at me. Yes to con con.

D Wareham --- Taylorville · 10 months ago

For all you people that say cut payroll Illinois has the lowest number of full-time equivalent state government employees relative to population among all states. So how many more do ya want to cut??? What state service do you want to loose???I believe you could cut every state employee and still be in the hole. Blago alraedy cut us to the bone. I guess we could get rid of all the bosses. I'd go for that

Six Degrees of Separation · 10 months ago

Yes to con con

I await 2028 with bated breath...hope I still have a pulse by then.

Six Degrees of Separation · 10 months ago

the impact can be offset by raising the retirement age to 68 or even 70

Are you talking about state employees? Most are collecting a pension by age 60. I believe a raising of the retirement age for people in the existing system would be looked at by the courts as an unconstitutional diminishing of pension benefits. Future employees, maybe...we'd see the benefits in about 30 years.

Concerned Voter · 10 months ago

1. Across the board percentage cuts from all agencies. (Many agencies are already hurting so spread the pain around).
2. New pension/benefit rules for any new hirees. Without a union ok, it would be difficult to change pensions/salaries for current employees.
3. The legislators lead the way by freezing salaries for all state elected officials for 5 years and establishing new rules for their pensions also. People complain about the state employees and there pensions, but the legislators get a sweet deal too.
4. As much as I hate to say it. A tax increase. I would prefer to see a sales tax or vat type so all players in the economy pay, again spread the pain around. Or a state income tax increase.

Capitol View · 10 months ago

Sell LaSalle County to developers, and sell Vermillion County to Indiana.

To those of you who want to cut back funding to hospitals and human services providers, don't worry about it. Based on current underfunding and late funding, we will lose over 10% of these providers in the next few years, if they have not alrady closed their doors. Fewer facilities and programs mean more waiting lists for vulnerable individuals and families, and more deaths for poor persons mean fewer state agency clients to serve, right?

Raise taxes and be able to sleep at night.

Reminder: there are no pockets in shrouds. Spend your money now on charities and essential government programs, and earn your way to heaven. Accept your social responsibility.

Taxhound · 10 months ago

First start with the suspension of pay to all members of the General Assembly. While it will barely scratch the surface, they approved the spending that got us into this mess. And if they are not being paid they will spend less time is springpatch further harming the state. Next implement a zero based budget process. Under this concept every nickle of proposed spending has to be justified. While this is an immense undertaking, it is the only way to truly identify the myraid of programs that don't accomplish anything except create jobs for bureaucrats. Sacred cows must be slaughtered. Eliminating the redundent, archaic and worthless programs will enable the personal cuts as well as the overhead that goes with them.

wordslinger · 10 months ago

=...enact conceal carry…reduces crime rate and need for far fewer law enforcement personnel.==

Justice, I previously advocated retiring the phrase "thinking outside the box," but I think an exception needs to be made in your case. Proposing to arm the citizenry as a means of reducing the state budget deficit is certainly out of the box... or something.

Justice · 10 months ago

Wordslinger....thought you would appreciate that. Just a zinger in favor of conceal carry. Carry's no weight other than that, though I think it could help a smidgen. We really need to scale back services and the non life threatening benefits.

You Go Boy · 10 months ago

Early Retirement Incentives can work if the number reduced are not replaced , and when they are replaced, at lower pay. Blago significantly reduced the number of employees, but obviously not their cost. Waste, Fraud are more than cliche's...they exist and if the proper emphasis and manpower were directed (say Medicaid Fraud), it would certainly help.

Arthur Andersen · 10 months ago

pot wrote: "The pension system is in trouble for two reasons: underfunding & too-early retirement."

The first one, underfunding, is the big problem. The general demographic issue of folks living longer is manageable if the actuarial assumptions are evaluated frequently and contribution rates tweaked as needed. Setting a normal retirement age at 55 or 60 is not extravagant if the pension fund is fully funded. Oops.

One of Illinois' many pension fiascoes has been the enactment of various early retirement without discount "window periods" that allowed people as young as 50 to retire and draw a full pension in some cases. The explosion of State workers being added to the pricier "alternative formula" (the one that started out for State Police and now has everyone from sign hangers to arson investigators in it-retire at 50 with 27 years-no discount-80% pension) has been another burden on SERS; 1 in 3 SERS members is now in the alternative formula. Couple all these cost pressures with the lousy investment returns, especially at ISBI, and the outlook is bleak.

PS: Taxhound, Senator Burris called. He wants you to stop using his buzzword, zero-based budgeting, that he suggested for the State in 1975.

tanstaafl · 10 months ago

The problem with the early retirement in the past, lowere level employees took the retirement and then the Blogo administration added a bunch of high paid middle and upper management people to shuffle papers.

Six Degrees of Separation · 10 months ago

AA-

The Alternative Service formula applies mainly to State Police, front-line Bureau of Corrections, and IDOT Highway Maintainers, no? If these occupations are truly dangerous with about the same mortality and injury rates for in-service employees, it's hard to justify changing one to a lesser formula. And once it's changed upward, it's permanent due to IL's constitutional protection of state pensions which voters resoundingly affirmed last year.

Concerned Voter · 10 months ago

Not debating about whether pensions are good or bad, but just a little info.

Some state jobs rightfully get a higher pension percentage, state police and some jobs that are dangerous fine. Others maybe don't deserve the alternative formula.

Many state employees retirement is the of avg annual salary of last 4 yrs multiplied by (1.67 percent for every year of service) and have a rule of 85 (yrs of service plus age = 85 can retire w/no penalty) They would have to work 45 years to get the max of 75%

So a worker who started at 21, works to 53, has 32 years of service. If the avg 4 of salary was $45000, they would get pension of just over $24000 a year.

Be prepared, if early retirements come again, state services suffer. Lots of people go, and they don't exactly prepare the people who will take over jobs. In past early out times, some office folks were hired back to help process paperwork because they left before they could train anyone else.

Rod · 10 months ago

"I have always been baffled by state and local pensions. No one in the private sector has a constitutionally protected right to a pension. 31 states have various government pension protections embedded in their constitutions. Why should government workers, regardless of how hard working, dedicated, etc....have a pension right none of the rest of us have? "

I don't know about the other 30 states, but in the Illinois university retirement system, workers do not make contributions to social security, and of course do not receive social security. In addition, the workers contribute half of the money into the fund, plus can and do invest their own money into their pension when transfering their pensions from out of state. The idea behind the constitutional protection is to prevent politicians from using the pension contributions of retired workers for other purposes.

NIEVA · 10 months ago

State payroll would also include C M S which is one of the biggest jokes of all time! Allow agencies to do there own purchasing and billing would save hundred of millions per year.

TaxMeMore · 10 months ago

RealityCheck, not all drug "offenders" are drug addicts. Not all drinkers are alcoholics. You may be assuming everyone we catch with drugs needs to be forced into drug treatment and thus costs would increase. I am not. That is why you misunderstood perhaps. Marijuana is not a chemically or physically addictive drug, unlike alcohol and nicotine and many "legal" drugs. There are no withdrawal symptoms to treat medically. Marijuana arrests of small amounts make up almost half of our drug arrests. So if we approached this from a medical science perspective instead of a punishment and moral authoritative control perspective, costs to treat the people truly addicted to meth and coke and heroin etc, would be more than made up by the savings in not arresting small time marijuana possession. People caught with marijuana don't need treatment or jail.

Drug "felons" like Barack Obama and Michael Phelps and George Bush and Bill Clinton and half the Illinois General Assembly and half the US Congress would not be better off if they were caught with a joint and forced into treatments centers instead of prisons. Mostly, anyway.

If we keep calling them drug "offenders" when begging for uneccessary, wasteful marijuana treatment tax dollars but calling them drug "felons" when protecting enforcement and prison dollars, of course the public won't want drug "felons" released. But we are talking about drug felons exactly like Barack Obama and Michael Phelps. Present it to the public that its a huge waste of money and does more harm than good to lock up people like Barack Obama for smoking a little pot and they will believe that.

In fact take a cue from the Netherlands, where fewer of their children and young adults use marijuana than in the US, and decriminalize and tax and regulate the sales of small amounts of it. Big, big, big, huge budget solving money right there in one swoop.

Arthur Andersen · 10 months ago

Rod 6:55, you make two good and important points about SURS members not getting Social Security (but most pay for, and receive, Medicare) and their substantial required contributions to the system. Your points are equally applicable to members of TRS.

I would like to clarify a couple of your other observations. SURS (and TRS) members don't "pay half" of the cost of their pensions; over the long run, the split is more like 20% each for the member and the State, with most of the revenue, or about 60% coming from earnings on investments. This is where TRS' and SURS' strong investment performance over the years reduces the burden on the other two sources.
Secondly, although it's a good deal for the member, the "investment" in service purchases in most cases is a loser for the pension fund for reasons only an actuary would care about.

State worker w/ an MBA · 10 months ago

Shared services = higher cost.

Under Rod CMS has grown by leaps and bounds.

We now lease all computers and office funiture from CMS. Most all this was paid for before Rod came into power but now CMS owns it all and we make monthly payments on our own property.

Go figure.

Bookworm · 10 months ago

Was CMS a creation of the Former Non-Occupant or is it older than that? Whose idea was it to have the state buying, renting and leasing stuff from itself? How was this allegedly supposed to save money?

Lynn S · 10 months ago

Sell Vermillion County to Indiana? Puh-LEEZ!! I live next to Vermillion County and have lived in Indiana, and I would be willing to bet $5 we would have to pay Indiana to take Vermillion County...

Seriously, we're going to have to look harder at schools (the idea about forcing k-8 and high school districts in the same town to consolidate is good, provided you don't have multiple k-8s feeding into the high school. Then it will get ugly.).

Treating potheads, rather than sending them to prison, is a better fiscal and human capitol policy. However, it will deprive certain politicians (I'm thinking of the former state's attorney in my county) of cheap points at election time, so it won't fly, and more's the loss to everyone else. >:-[

Taking a fine scapel to the tops of all state agencies is an excellent idea, and probably will fail for that reason. (we all know what happens when you mess with patronage...)

Moving almost all governmental functions back to Springpatch is a good idea, and might almost be doable, thanks to Blago. I would be willing to bet we can get a good price, even in this downer economy, for the Thompson Center and several other state bldgs. Those who gripe about how boring Springpatch is should be required to do something to liven it up (open stores, restaurants, performing arts, etc.).

Eliminate townships? Works great in Cook County and places like Champaign (co-terminous township City of Champaign township), but I grew up in rural Southeastern Illinois, and there are places in this state where townships perform essential government functions and are worthwhile to their residents. Can the legislature make that distinction when they approach this issue?

Sorry, Rich, probably not doing my best tonight...

Hey Guys · 10 months ago

I know that everyone hates CMS. That has always been the case. This is nothing new. What you all have to realize is that CMS is the lead Administrative agency of the GOV. Yes, the GOV. It always has been. So don't blame CMS or it employees. Put the blame in the right place. CMS never asked for any consolidations! Nor has CMS enjoyed any of the consolidations.

Peter from Bloomington · 10 months ago

State employee payroll - it's not just the money we're spending on salaries, it's the pension obligations associated with employees.

Hey Guys · 10 months ago

One more thing, if you are one of those state employees are crying about the service they are receiving from CMS, put yourself in someone elses shoes for a minute. Think of your self as a citizen of the state who needs medicaid, or any other social service the state provides. They are not getting good serice either and i think there situation is more life threatening. Stick to the question.

Bookworm · 10 months ago

The $9 billion deficit and the fact that I am a state employee partly explain why I'm up at this hour :)

Okay, if I only get to pick one, it's got to be either payroll or pensions. Yes, pensions have been neglected for too long, but they are not the most immediate need. Since not all state employees retire at exactly the same time, 100 percent funding is not an absolute necessity. Getting back on a long-term plan for boosting the funding percentage a couple of years down the road (maybe after the economy has recovered a bit) and sticking to it might be a good idea. Also, now is the time to consider things like raising the retirement age or changing the formula. Most workers my age and younger (mid-40s) assume they will have to work past 65 anyway and are not counting on either Social Security or pensions to be around when they do retire.

As for payroll... yikes, we would be talking about one out of every four state employees getting canned, or else cutting everyone's pay by one-fourth, if we really wanted to get rid of a billion just there. I will admit that some cuts have to be made there if the public is going to accept enough of a tax increase to decently fund anything. If it should turn out to be my job (which doesn't pay a whole heck of a lot) that gets cut, well, c'est la vie.

Slasher · 10 months ago

State Payroll
A total reformatting of state workforce is called for. Brainstorming for starters:

Reduce state hours to 4 day work weeks and cut hours from 7.5 hrs. to 5 hrs daily for all but essential positions. Rotate workforce to cover essential days/hours.

Offer job sharing - many state employees would be more than willing to take a cut in pay to work half time. This was tried in the 80s and very popular.

Reality...Many employees are working part-time in full time positions. This is done by taking vacation and personal time weekly or just filling the excess time looking busy. Assess which jobs could be made part-time and offer it up. Same as above, many would be willing to work a three-day vs. five-day week.

Automate services like entitlement programs casework.

Like the fed. gov does for at least one day(if not more) a week... allow work from home to cut overhead costs.

Get rid of excessive layers of management.

Put a $100,000 cap on merit salaries like Obama just did. Attempt to do same with Union positions.

Get rid of non union mid-management positions. Have staff report directly to top management to cut excess.

Consolidate office locations. State is paying rent at too many locations with excess space in key building .. ex. Harris Bldg...

Get rid of blackberry brigades for mid management. It's obnoxious seeing all these mid managers carrying cells many having their personal and state phones sit side by side in meeting ... just in case the boss needs to reach them. What are landlines for. We don't need both in these tough times.

Reduce benefit time for new employees. Where else does one get 10 vacation, 12 sick days and 3 personal days at the start of employment? Vacation jumps to 25 days a year at max. Nice but come on.

This is fun and I could go on and on. It's time State government structure is brought into the 21st century.

Clarity · 10 months ago

**** Um, that would probably increase payroll costs.***** Wrong Wrong Wrong.... That is what high paid management at SS wants people to think ******* It's is a waste of money... Have someone prove that Shared Services saved a dime... It has cost millions.

Angry Chicagoan · 10 months ago

I'd reluctantly have to go for K-12 funding, and only because the peculiarities of school funding in this state create a massive collective action problem that drives school boards to give huge pay raises to employees near retirement because they know the state will pick up the benefits on a final salary basis. If it is ultimately to survive as a defined benefit program, the teacher's pension system has to be be reformed to take into account average pay over a much longer slice of a person's career in order in part to prevent this kind of one-upmanship that costs the state so much.

But presumably that change would involve labor troubles.

Ideally state education funding would involve actual classroom instruction, rather than causing collective action problems through a one-sided coverage of pensions.