Pritzker touts $225M in state savings before budget address

The governor credited most of the savings to new labor union deals, and said the state is exploring several agency mergers.

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Gov. J.B. Pritzker speaks Friday at the Thompson Center.

Mitchell Armentrout/Sun-Times

Days before he unveils his administration’s budget for the next fiscal year, Gov. J.B. Pritzker on Friday touted $225 million he says state officials have saved by trimming inefficient spending, optimizing operations — and potentially merging some state agencies.

The streamlined spending will save the state at least $750 million over the next three years, according to the freshman Democrat’s office.

Most of that is thanks to 20 new labor agreements with state workers’ unions that include “innovative health care plan design,” saving $175 million in this year’s budget and $650 million over three years, Pritzker said.

That’s in contrast to the “years of hostility” with organized labor, the governor said, pointing to his preferred political punching bag, Republican former Gov. Bruce Rauner.

“In the past, irresponsible management of state revenue and a failure to invest in the long-term health of our state and its people put us in a challenging fiscal position,” Pritzker said. “But today, I’m proud to announce that for the coming year, our efficiencies and initiatives will yield at least $225 million in savings and will put the state in a position to save more than $750 million over the next three years.”

The state is also trimming the fat by paying down overdue medical bills to avoid $15.7 million in late fees in this year’s budget and $25 million in the next.

And state agency heads who were ordered last summer to find room for funding cuts did just that, Pritzker said, including more than $25 million from the Department of Corrections operating budget. His administration is also counting on up to $15 million from “enhanced revenue collections” by the Department of Revenue.

Beyond that, Pritzker’s office is considering consolidating state agencies with “duplicative” functions. That could include a merger of the state departments of Labor and Employment Security, an idea the governor said they’re “exploring.”

Several business groups banded together as the Joint Employers immediately condemned the potential merger.

“Such a proposal suggests a lack of understanding of the need for [the Illinois Department of Employment Security]to act as a standalone agency and raises questions about what, if any, benefits would come from a merger,” the group said in a statement.

Two other mergers will indeed happen, Pritzker’s office said: the anti-fraud programs of the Workers’ Compensation Commission and the Department of Insurance, and the Coroner Training Board into the Department of Public Health.

The state has more than 700 boards and commissions — many deemed “duplicative, outdated and dormant” by Pritzker’s office — that are also under scrutiny.

The $225 million in potential savings represents only about 0.5% of the current fiscal year’s $40 billion budget, a number that’s only expected to balloon when Pritzker releases his second state budget in Springfield Feb. 19.

But he suggested it’s a sign of progress, again pointing to his predecessor Rauner.

“Let’s start with the situation that I walked into when I became governor, the agencies of state government had been significantly hollowed out, and if you would talk to our state agency directors, they would tell you that they walked into situations where sometimes the basic functions of government required by law weren’t being performed,” Pritzker said. “So we’re in the process here of making government more efficient and effective with the dollars that we have, and making sure that we’re restoring services that people deserve.”

Here’s a breakdown from Pritzker’s office on the $225 million in savings:

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