Rauner unveils ‘budget Illinois can afford’ — major cuts to Medicaid, special needs, local government

SPRINGFIELD — After campaigning for more than two years on vague promises that he’d profoundly change business as usual in Springfield, Gov. Bruce Rauner finally laid his cards on the table Wednesday, calling for a staggering $6.7 billion in cuts to Illinois’ budget.

The Republican governor’s first proposed budget called for slashing money for human services, including $1.5 billion in Medicaid funding, $82 million in mental-health services and the elimination of a slew of programs for those living with special needs.

“The budget outlined today is the budget Illinois can afford, and that in itself is an example of thinking anew,” Rauner said in an address to the Illinois General Assembly. “For far too long, we have been living beyond our means, spending money that Illinois taxpayers could not afford.”

The budget proposal also called for about $600 million in cuts to local governments and another $387 million in cuts to higher education. However, Rauner said he would ensure that the state gives more money to fund its share of education and urged lawmakers to retain the state’s child care assistance program.

The biggest-ticket proposal that drew the most questions was a $2.2 billion projected savings for a new reform package aimed at changing the state’s chronically troubled pension system. Rauner called on shifting current members into the same pool as new hires, lowering benefits. The proposal needs legislative approval and is certain to face legal challenges.

“We cannot continue to raise taxes on all Illinoisans in order to fund the retirement benefits of a small fraction of our residents,” Rauner said.

Supporters deemed Rauner’s budget politically courageous. Detractors called it disingenuous.

In remarks to reporters after the budget address, House Speaker Michael Madigan, D-Chicago, questioned how Rauner could count on $2.2 billion in revenue from pension reform that has not been enacted and would face legal challenges. Madigan said factoring that money into the revenue calculation goes against past practice.

“The governor proposes to engage in conduct which I would consider to be reckless,” Madigan said. Madigan noted that the state is not counting savings from pension reform passed last year since it is the subject of a legal challenge.

Madigan said he would push for a new revenue source and suggested a tax on those who make more than $1 million a year. Madigan said a 3 percent tax on income that is greater than $1 million would bring in $1 billion in revenue to be designated for local school districts. Doing that, however, would take a constitutional amendment, and Madigan blamed Republicans last session for not providing critical votes to get the measure over the goal line.

In his budget address, Rauner recommended increasing K-12 education by about $300 million and $25 million for early childhood education. Rauner’s proposed budget is for the year beginning July 1, and it would spend $31.5 billion and predicts $32 billion in revenue. The remaining $500 million would be used to pay bills, the governor’s budget office said. It did not ask to raise taxes or borrow money.

“Asking for more of the taxpayers’ hard-earned money without fundamentally reforming the structure of state government would further erode public confidence and accelerate our decline,” Rauner told lawmakers. “Waste and inefficiency are rampant in the system. Illinois government is currently designed to benefit those inside the system rather than the working families of our state.”

On pensions, Rauner proposed moving all employees into a different tier system with fewer benefits. Rauner excluded police and firefighters from the mix.

“Those who put their lives on the line in service to our state deserve to be treated differently, and I believe the public will stand with me in this single case of special treatment,” Rauner said.

In Springfield, other lawmakers were also leery of aspects of the budget.

“It’s going to lead to raising local property taxes, increasing tuition costs for families and putting most harm on the most vulnerable members of our society, people with special needs,” said state Sen. Dan Kotowski, D-Park Ridge.

Kotowksi complained about cuts to programs for people living with developmental disabilities such as Autism and Epilepsy. The lawmaker said the budget calls for the elimination of programs such as Best Buddies, Project Autism and The Arc of Illinois, epilepsy services.

However, Laurence Msall, president of the Civic Federation, characterized the budget proposal as a necessary step toward bringing Illinois back to fiscal solvency.

“Governor Rauner has proposed an enormously difficult budget and we are pleased to see a comprehensive approach to balancing the state’s spending with available revenues,” Msall said. “The pain and severity of this budget is a foreseeable consequence of Illinois’ earlier failures to comprehensively address its financial crisis over the last seven years.”

Rep. Greg Harris, D-Chicago, rattled off what he called a “short list” of people who should be concerned with Rauner’s budget plan.

He said they include parents of children who want to go to college or who have disabilities, people who use mass transit or people with mental illness or substance abuse in their family.

“I think the choice [Rauner’s] made is to balance this budget on the backs of the most frail, the most vulnerable and those who do not have a powerful voice in Springfield.”

Asked if any of Rauner’s proposals are “dead on arrival,” Harris answered, “I hope so.”

Senate President John Cullerton said he wouldn’t use those words. But he did say there’s a significant problem with Rauner’s pension-reform plan. He said Rauner has a $2.2 billion hole in his budget because his pension-reform plan is likely to wind up in court — and the savings would be tied up with it.

“That’s the biggest problem that I can see so far,” Cullerton said.

Senate Republican Leader Christine Radogno and House Republican Leader Jim Durkin cautioned Rauner’s plan is a start, and the state can’t continue on its path with pensions. Radogno said “we’ll have to bridge that gap” if the savings are lost to a court battle.