“This is our last, best chance to get our house in order,” Gov. Bruce Rauner said as he presented his plans for the upcoming state budget in an address Feb. 18.
“We must be willing to take actions we’d rather avoid and make decisions that may seem unpopular in the short run. The budget outlined today is the budget Illinois can afford, and that in itself is an example of “thinking anew,” he said.
Rauner said Illinois has lived too long beyond its means and acknowledged that one budget isn’t going to solve all the state’s problems. “It will take time to restore Illinois to fiscal health.
“Even after we solve this year’s fiscal crisis, we will still be left with a budget hole of $6.2 billion for the coming fiscal year,” Rauner said.
“The current budget was $1.6 billion in the hole when it was signed last year,” Rauner said. He said the Child Care Assistance Program is out of money; court reporters will begin missing payroll next month and state prisons will begin missing payroll in early April.
Gov. Rauner said major reforms are needed and at the top of his list is the pension system. He said the pension systems are $111 billion in the hole. “Even if our pension systems were fully funded, taxpayers would still be on the hook for $2 billion.”
Rauner said the pension reform plan in his budget will protect every dollar of benefits earned to date. “What you’ve earned, you’re going to get. If you are retired, you will get everything you were promised. That’s fair and it’s right.”
“All future work will be under the Tier 2 pension plan, except for our police and firefighters. Those who put their lives on the line in service to our state deserve to be treated differently.”
Under the plan, employees hired before 2011 may take a buyout option--- a lump sum payment and a defined contribution plan in return for a voluntary reduction in cost-of-living adjustments.
Rauner said these reforms will yield more than $2 billion in savings in the first year.
He also said an additional $700 million can be saved by bringing health care benefits in line with those received by taxpayers.
Rauner said education must also be a priority. Funding for K-12 is increased by $300 million in the budget proposal and he added there is a need to increase high quality early education options for our most vulnerable children. “Every dollar spent saves $7 in the future,” he said.
The budget includes reductions for local governments that would equal 3 percent of their total revenue but along with the cutback, turnaround reforms will reduce unfunded mandates.
Other budget reductions include public transportation which amount to less than 5 percent of the budget for the state’s largest transit agency.
He proposes budget cuts to Medicaid while maintaining eligibiliy levels for most lower-income Illinoisans and plans to re-implement many Medicare reform measures that were undone.
He plans to cut costs in the criminal justice system through reform, making prisons safer and rehabiliating ex-offenders.
Rauner said some of these reforms cannot be achieved through legislation alone. Some must be achieved through good faith bargaining.
“While this budget begins to fix our financial problems, the only real answer to our challenges is to become pro-growth again. We need a booming economy, businesses starting here and people and businesses moving here.
“To grow our economy, we must enact meaningful workers’ compensation reform, unemployment insurance reform, lawsuit reform, pension reform and tax reform.
We’ve got to freeze property taxes, cut the red tape inside state and local government and let people control their own economic destinies.”