January 05, 2011
Over the course of 2010 the IIFS blog explored a number of State of Illinois budget topics ranging from Medicaid/HMO funding issues to the State public pension system. Posts on the IIFS blog not only supplement IIFS publications, but also provide additional context and commentary to events in the news and State budget events.
Posts about the State Medicaid system featured prominently on the IIFS blog. “Opposition Surfaces to Medicaid HMO Plan” from January 21, 2010 discussed resistance from advocates for the disabled to Governor Pat Quinn’s plan to enroll Medicaid recipients in HMOs. “Update on State’s Plan for Medicaid HMOs” from February 8 provided further details on that plan based upon information found in the State’s request for proposals. This post from March 9 described how resistance from lawmakers to the plan was manifested via a series of bills designed to either delay the plan or allow Medicaid recipients to opt out.
Later in the year, IIFS continued tracking Medicaid issues with posts such as this one from September 9 that discussed the Illinois Division of Developmental Disabilities strategic plan to bring residential centers for the developmentally disabled in Illinois in line with national standards by 2017. This post from December 16 focused on opposition by legislators, healthcare industry officials and labor unions to efforts to reform the Illinois Medicaid system.
The primary topic of conversation on the IIFS blog in 2010 was the State of Illinois budget crisis. On February 17 the post “Impact of the State of Illinois’ Fiscal Crisis” explained how Illinois residents, state workers and service providers were being impacted by the State’s financial problems. At the time of the post, the State was over $431 million behind in payments to the University of Illinois, forcing the school to cut pay, freeze hiring and institute furlough days for employees.
During the FY2011 State of Illinois budget negotiations, the IIFS blog provided a number of posts tracking actions in Springfield. “Governor Proposes Borrowing Instead of Doubling Unpaid Bills” from March 23 discussed the Governor’s plans to bridge a projected $4.7 billion budget deficit through borrowing. “Illinois Lawmakers Propose $1.3 Billion in State Budget Cuts” from May 24 described a plan by the Illinois General Assembly to make major cuts to the budget, a move that the Federation supported, just days before the end of its regular session. However, the budget that was eventually passed was unbalanced, which led to downgrades of the State’s debt ratings, a situation this post from July 14 analyzed. This post from September 30 “Moody’s Goes Negative on Illinois Debt” explained how the State’s reliance on one-time revenue sources to close its FY2011 budget gap was damaging its credit and potentially increasing its borrowing costs.
Discussion of the State pension system was a constant theme in the IIFS blog. “Illinois’ Underfunded Pensions” from February 23 examined a Pew Center on the States report that found that of all the states’ pension systems, Illinois’ ranked as the absolute worst in terms of fiscal health. Illinois’ pension troubles stem from chronic underfunding, exacerbated by the recent economic downturn. This post from June 22, “Pension Holiday in FY2011 Estimated to Cost $12.5 Billion,” examined the long-term cost if the State of Illinois skipps its pension contribution for FY2011. The State could also borrow to make its pension payment, as this post from November 11 explained, but that move could also have severe fiscal ramifications down the road. This post from November 18 provided additional commentary about an IIFS analysis of the State’s FY2011 enacted budget and how borrowing to make the 2011 pension contribution could lead to almost a decade’s worth of higher debt service payments.
Although the State of Illinois enacted very important pension reform legislation creating a two-tier system that will reduce future pension liabilities to the State by reducing benefits for future employees, it has yet to come to grips with how it will fund its current obligations to the retirement systems. The Governor proposed borrowing to make the approximately $4 billion pension contribution the State owes in FY2011, just like it did in FY2010, but the General Assembly did not authorize the borrowing. It remains to be seen how the State will fund its required contribution to its retirement systems. Meanwhile, the pension funds continue to wait on payments from the State and sell off their already diminished assets. It is expected that the General Assembly will reconsider the pension borrowing plans in the coming weeks but a long-term plan to address the State's ever growing unfunded obligations to its retirees has not yet surfaced in Springfield.
The IIFS blog also offered additional commentary on other State budget topics. “Voters Avoid Hard Choices on State Budget” from October 21 discussed a poll by the Paul Simon Public Policy Institute that found that voters often maintained conflicting ideas about how to fix the Illinois budget deficit through cuts or revenue increases. This post from October 14 examined the State’s plan to implement performance measurement requirements for FY2012, a long-term Civic Federation recommendation.
Please continue to read the Civic Federation and IIFS blogs in 2011 for more commentary and analysis about government and policy across Illinois. Both blogs can be subscribed to via RSS feeds compatible with Microsoft Outlook and most popular web browsers. Click here for the Civic Federation feed. Click here for the IIFS feed.