May 1, 2012
The Civic Federation supports Governor Pat Quinn’s $57.4 billion FY2013 recommended operating budget, because it acknowledges the depth of the State’s financial problems and would put Illinois finances on the road to recovery with major structural reforms to the State’s Medicaid program and pension systems.
The Governor’s proposed FY2013 budget makes several important steps toward Illinois’ fiscal recovery. The proposal does not rely on borrowing, a departure from the State’s pattern of pushing current fiscal problems into future years. Further, the Governor’s Medicaid reform proposal aims to eliminate the program’s $2.7 billion funding gap through a combination of program changes, reimbursement rate decreases for healthcare providers (excluding doctors) and resources from an increase in the State’s cigarette tax. Governor Quinn has also made a reasonable pension reform proposal that would reduce unfunded liabilities and establish an actuarially sound funding plan that requires shared sacrifice by both current employees and taxpayers.
The Civic Federation calls on the Illinois General Assembly to either approve the Governor’s pension and Medicaid reform plans or identify reasonable alternatives. The Civic Federation also cautions that more information is needed to understand the projected savings of the Governor’s pension plan and recommends that the State carefully monitor changes in the Medicaid program and make additional changes if projected savings are not achieved. Although the Governor’s recommended FY2013 budget and reform proposals would keep the State’s backlog of bills from growing, the Civic Federation remains concerned that the State will still end FY2013 with a total of approximately $9.1 billion in unpaid bills accumulated from previous years.