Quinn: Pension costs, tax loss pave $3.4 billion in cuts

SPRINGFIELD-Maybe Gov. Pat Quinn’s virtual pension python – ‘Squeezy’

– was right all along.

In a newly released report, Quinn’s budget office showed that rising

pension costs and the 2015 expiration of a temporary 2-percent income

tax hike translate to $3.4 billion in cuts to education, health care

and public safety between now and mid-2017.

“I think (the report) speaks for itself,” said Abdon Pallasch, Quinn’s

assistant budget director. “It’s the first time you’ve

seen how deep the cuts really are.”

By far, education and health care face the bleakest outlook from the

state’s fiscal freefall. By the administration’s estimate, state

spending on schools will drop $1.8 billion during the next three years

while health care spending will face $1.1 billion in cuts.

In that same three-year window, those big spending drops are joined by

nearly 13-percent less for human services; almost 36 percent less for

government services not including state pension or health costs; $268

million (18.7 percent) less to public safety; $24 million (30.8

percent) less to economic development; and $12 million (19.4 percent)

less to natural resources.

The grim assessment, laid out in a report released by the

administration late Friday, offers a likely glimpse of what next

year’s budget may look like under Quinn. The governor is scheduled to

lay out his Fiscal 2014 budget plan to state lawmakers on March 6.

Despite a last-minute effort last week in the waning hours of the 97th

General Assembly, Quinn was not able to bring sides together on

reaching any agreement to reign in state pension benefits, instead

allowing the debate to spill into the new legislative session.

“If the economy picks up, that helps,” Pallasch said. “Pension reform

helps, which is one of the main issues we’re focusing on.”

By 2016, without bridling in state pension costs, the report said the

state will pay $1.1 billion more to K-12 and university teachers’

pensions and $322 million more to state employees’ pensions than it

will pay this year, increases of 27.7 percent and 28.1 percent,

respectively.

A spokesman for the union representing the largest bloc of state

employees said the new estimates demonstrate Springfield’s urgent need

for more money.

“It shows that the state’s real challenge is the loss of revenue with

a scheduled expiration of the income tax,” Anders Lindall, a spokesman

for AFSCME Council 31, said Monday.

Lindall, side-stepping the organization’s stance on extending the tax

hike, said AFSCME Council 31 still supports a proposal from the We Are

One Illinois coalition that he said will raise $2 billion per year

from closing corporate tax breaks and $350 million in higher employee

pension contributions.

“The only alternative from Gov. Quinn to the unacceptable cuts to

public services, is to welsh on pension promises made to retired

teachers, caregivers and other public employees,” Lindall said.

Payments to the state’s pension systems become harder with the state

expecting nearly $4 billion less in personal and corporate income tax

revenue over the next three years because of the phasing out of the

temporary income tax increase imposed in 2011.