Rep. Greg Harris • 13th District
Springfield Update • May 12, 2011
House FY12 Budget 2.0—Major Spending Cuts Approved
This week the House Appropriations Committees approved bills to cut over $2 billion from the Governor’s introduced budget. The cuts are across the board and effect every department, agency and interest group, and they are in many cases severe. However, budget cuts of this magnitude are necessary if we are to spend no more than the $33.173 billion in General Revenue Funds which is the most conservative estimate. The Senate is still working on a budget that anticipates a more generous $1.1 billion in revenue than the House, so the two budgets will still have to be reconciled.
As I told you last time, there were a variety of possible strategies to use in achieving cuts of this magnitude. All of them involve cuts to programs which are good and laudable….but the sad fact is that we cannot fund them and live within our means. The appropriations committees tried to fund core health, safety and education services at minimum levels, other programs took much more substantial cuts.
No interest group or constituency will like it, and the complaints and requests for funding increases and/or restoration are already pouring in. I am sure we will look carefully at rebalancing some specific lines if there are matching federal funds available to increase overall revenue, or if the proposed cuts jeopardize Maintenance of Effort requirements or court-ordered consent decrees, or if other revenue sources are approved.
One of the largest decisions that all the appropriations committees faced was how to address the contractual obligation of the State to pay raises for union members under the collective bargaining agreement signed by former Gov. Blagojevich, coupled with the no layoff or facility closure Memorandum of Understanding signed by Governor Quinn. The Committees felt that we could not continue to pay growing costs of state government operations at the expense of direct community-based services. Therefore, many Personal Services (Salary) lines were given major across the board cuts which will mean position eliminations across every department, and will likely invite litigation over the terms of the collective bargaining agreement, if the cuts are approved by both Chambers and signed into law.
As well, all departmental budgets for items such as travel, telecommunications, EDP, supplies, contractual services and commodities were also slashed to preserve as much money as possible to fund direct service to Illinois residents.
Reductions in governmental grants and transfers from the Federal government (mostly from the now expired ARRA program) caused substantial losses in revenue which have to be made from General Revenue Funds. For instance, the Department of Healthcare and Family Services saw a loss of over $100 million in ARRA funds, and the Department of Human Services lost $487.9 million in ARRA which now must be made up out of state sources.
Education funding from ARRA was cut as well, forcing a reduction in General State Aid, along with transportation and other Mandated Categoricals. The effects of the ARRA loss for the state means having to cut deeper into salaries, expenses and programming than we otherwise would have had to do.
Cuts to community based agencies and nonprofit providers will ultimately mean service reduction, increased need for other funding sources, layoffs, closures or all the above. Cuts to government entities such as school districts will necessitate local tax increases or cuts to programs and personnel.
There are no good ways to do this and bring our budget back into balance (even with the tax increase) without causing significant hardship.
On the positive side, there were changes made to restore some program cuts and eliminations that the Governor had proposed, because we felt that these cuts would be devastating for the most frail and vulnerable, caused irreparable harm to their health and to our communities, and would have just pushed up costs in acute care hospitalizations, law enforcement, etc. Among these programs added back into the budget and given increases are
- Addiction treatment and mental health services
- Discount prescription drugs for senior citizens
- Aid to the Aged, Blind and Disabled
- Rape Victims Assistance/Prevention
- Domestic Violence Shelters
- Supportive MH Housing
- Teen Reach
- DD grants and long term care
- Operation Ceasefire
- Community Health Centers
- Community Care Program (to keep senior citizens in their homes)
This is only a small sliver of the budget decisions which are being made. The Appropriations bills now go to the full House for approval, and then our final budget must be reconciled with the Senate version into one mutually agreeable document. It is our intent, however, to not spend more money than we have available, so that we do not dig our state deeper into the $14 billion hole in which we now find ourselves.
There are other options on the table which could further mitigate some of these cuts: decoupling from the accelerated federal depreciation schedule, bonding for debt repayment and Medicaid rate cuts and/or payment cycle changes. These are still under consideration.
Among other items which still might considered before the May 31 deadline are: Workers Comp Reform, Education Reform, ComEd rate increases/SmartGrid, further changes to the public pension systems, changes to cemetery oversight and the remapping process. As we go down this painful and unhappy path of getting our financial house back in order, I will try to keep you informed of the latest facts and developments. Of course, I always welcome your comments or suggestions at 217 782 3835 or greg@gregharris.org.