December 22, 2009
Since its beginnings in July with the overhaul of the Civic Federation’s website, the IIFS blog has focused mostly on issues related to the Illinois budget, including Medicaid, debt, and the State pension system. These posts expand upon topics discussed in IIFS research publications and events in the news.
Discussion about Illinois’ FY2010 budget and how the State was planning to bridge a two-year, $11.6 billion budget gap was the focal point for a number of blog posts. “New Borrowing Worsens Future Budget Strains” explained how the chronically underfunded Illinois public employee pension program was a major factor in Illinois’ current budget woes. “Governor Puts Off Budget Cuts” examined Governor Pat Quinn’s rationale for a proposed income tax increase and outlined a series of his proposed budget cuts.
The Governor’s plan to seek a short-term loan of $900 million to offset revenue shortfalls, on top of the $2.25 billion already loaned since May, was the focus of “State to Increase Borrowing to Cope with Budget Shortfall.” This blog post pointed out that the State was covering part of its budget shortfall by not paying its bills -- $2.9 billion of them at the end of September.
The effect of the current economic recession on employment levels – and its negative effect on tax revenues -- was the focus of this October post “Increased Unemployment Corrodes State Revenues." It noted that anticipated income tax revenue for FY2010 was likely to be $850 million less than expected when the budget was approved in July 2009.
Earlier this month, the IIFS posted an update to the State’s plans to borrow money to help keep it afloat. This post, “Update on State’s Short Term Borrowing Plans,” detailed Illinois Comptroller Dan Hynes refusal to approve the Governor’s request for new short-term borrowing, saying the borrowing “would further strain a state budget that can barely accommodate the currently scheduled debt service and critical on-going payments our office must make.”
The status of the Illinois Medicaid program also received significant attention from the IIFS blog.
A series of posts covered Governor Quinn’s decision on whether to close the Howe Developmental Center, a state-run facility for the developmentally disabled in Tinley Park, in order to cut a significant expenditure from the budget. “Governor Postpones Decision on Closing Howe Developmental Center” discussed the facility’s decertification by federal authorities in the wake of reports of substandard care and safety violations, which lost the State $40 million in federal dollars. Given the Center’s losses of about $2.2 million a month and the fact that advocates for the disabled believe that residents would be better served by integration into the community, the closing of the Center seemed likely.
On August 28, the Governor announced that Howe was to close and all its residents would be moved to other quarters by April 2010. In “Governor Closes Howe Center Despite Union Opposition,” the IIFS detailed a number of issues surrounding Howe, including overly high staffing levels and reports of abuse or neglect. “Update on Howe Developmental Center” discussed the findings of the Justice Department that the Center did not adequately protect its residents from accidents and neglect, nor provide adequate care.
A report by the Government Accountability Office (GAO) that examined the potentially fraudulent or abusive purchase of prescription drugs by Medicaid recipients and their doctors was the focus of “Medicaid Prescription Drug Abuse Alleged in Illinois and Other States.” The GAO’s report studied the financial ramifications of the practice of “doctor shopping,” in which patients see multiple doctors to obtain multiple prescriptions for drugs. Usually such patients are attempting to disguise an addiction or obtain large quantities of drugs to sell. The GAO also examined cases involving deceased patients or prescribers and cases in which drug claims were paid even though the doctors or pharmacies had been banned from prescribing or dispensing to Medicaid recipients.
The post “State Plans HMO Experiment for Elderly and Disabled in Medicaid” looked at Governor Quinn’s proposed pilot program to enroll 40,000 elderly and disabled Medicaid recipients into HMOs as a way of reducing health care costs. The cost savings would come from reducing unnecessary hospitalizations and drug expenditures.
In September, “A Consumer’s Guide to the Illinois State Sales Tax Increase” cleared some confusion about Illinois’ new sales tax increase on soft drinks, grooming and hygiene products, and candy. Much of the confusion stemmed from the State’s definition of candy, that being “a preparation of sugar, honey, or other natural or artificial sweeteners, in combination with chocolate, fruits, nuts or other ingredients, or flavorings in the form of bars, drops, or pieces.” However, exceptions were made for any products that contain flour or require refrigeration. Thusly, confections such as Twizzlers or Twix candy bars continue to be taxed at the low food tax rate.
“A Consumer’s Guide” also discussed increases to the State liquor and spirit taxes, topping off at 23.1 cents per gallon of beer or cider with alcohol content of .5%-7%, $1.39 cents per gallon of wine other than cider with an alcohol content of less than 20%, and $8.55 per gallon for liquor with an alcohol content of 20% or more.