Wednesday, July 08, 2009

Gov. Quinn proposes a billion dollar cut in spending and initiates 2600 layoffs; Is there an alternative to Quinn's income tax increase?

Gov. Quinn initiates state employee layoffs and seeks to negotiate furloughs with unions

Gov. Quinn used a veto, today, of a four billion dollar appropriations bill that funded state operations as a vehicle to “recommend,” to the General Assembly one billion dollars in spending cuts. However, in addition to his “recommendations,” the Governor set in motion lay-offs of 2600 state employees, including 1000 corrections officers. [Read the Governor's plan]. Further, the Governor will also try to negotiate with unions one furlough day per month for all state employees. That is the equivalent of about a 4% pay cut, but it is better than a pay cut for the employee—from the employee’s perspective-- because the employee does get one additional day per month “off,” which would not be the case for an ordinary pay cut. The budget savings to the State for these layoffs and furloughs total to about $310 billion dollars.

Additional spending cuts in education, Medicaid, etc.

Also recommended to be cut were $140 million in Medicaid, $250 million in grants, $175 million in education, $100 million in reserves and $25 million from departments and agencies not under the Governor.

Closing the 2010 “budget gap.”

Governor Quinn estimates the 2010 budget to have a “deficit or budget gap,” of 9.2 billion dollars. He contemplates closing the gap by obtaining 1.8 billion dollars in additional federal matching funds and getting the General Assembly to:

· Approve issuing 2.2 billion dollars in pension obligation notes
· Pass the 1.0 billion dollars in spending cuts discussed above
· Pass a 50% increase in the individual and corporate income tax rates.[Generating 4.2 billion dollars in additional budget revenue].

Quinn discussed and debated the above discussed budget cuts and plans yesterday afternoon in a press conference held on the 15th Floor of the Thompson Center in Chicago, IL. In that press conference, which lasted about 45 minutes, Governor Quinn was questioned intensively as to why he didn’t do an amendatory veto in which he, himself, implemented the specific spending cuts he wanted.

Why not an amendatory veto?

Gov. Quinn repeatedly argued that the budget sent to him was too far out of whack for him to “fix” it with an amendatory veto. Further, he argued it is the responsibility of the General Assembly, not the Governor, to draft a budget. He referred to the structure of state government set out in the State Constitution, giving the media a little "civics," lesson, he said.

Quinn met separately last week and earlier this week with female legislators and suburban legislators, respectively, in an effort to listen to their suggestions and to sell them on his budget plans. He will meet later this week with City of Chicago and downstate legislators.

Resolving the budget gap next week?

The governor contemplates meeting with the Four Tops- the legislative leaders—this coming Monday, before they go to Springfield for a scheduled session day on Tuesday, July 14, 2009. The Governor thinks the Leaders and he have plenty of time before Monday night to resolve the various issues necessary to pass the budget, including the Governor’s proposed tax increase, and he tried to sell that idea to an incredulous group of media at the press conference yesterday.

Six billion dollars in State Budget savings left on the table, an alternative to the Quinn income tax increase?

This journalist asked the Governor why he didn’t try to negotiate with the unions a 10% across the board decrease in state employee salaries, which would save the state approximately $500 million dollars, much more than the layoffs and furloughs-- and keep the state employees working and off the unemployment rolls. This is analogous to what has gone on in much of the private sector. The Governor responded simply that Team Quinn had its plan and it was going to stick with it. If this journalist had some more opportunities to question the Governor, he would have asked about six billion dollars in additional savings that could be achieved from additional cuts in the 2010 budget. Perhaps next time. The six billion dollars in cuts would more than obviate the need for Quinn's income tax increase and also help avoid the need for layoffs and furloughs. Of course, no other media present asked questions of this type.

Waiting for info from Governor’s OMB

After the press conference, this journalist asked the Communications Director for the Governor’s OMB what the GRF budget is for Fiscal 2010 and what it was for Fiscal 2009. He was told they would get back to him on that. This journalist is still waiting for a response, as of the time of this post. If the GRF for fiscal 2009 was about 30 billion dollars, the Governor’s billion dollars in proposed cuts amount to about a 3%cut in the GRF. It will be interesting to see if the Governor’s cuts for 2010 are measured by him as cuts from 2009 or are cuts from his proposed budgets of April or May for 2010. Inquiring minds want to know.
Jeff Berkowitz, Show Host/Producer of "Public Affairs," and Executive Legal Recruiter doing legal search can be reached at *************************************************************
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