Tuesday, May 15, 2012

Quinn: Reform Plans a Rescue Operation

Author: Jason Keyser, The Associated Press
Title: Quinn: Reform plans a rescue operation
Publication: The State Journal-Register
Link: http://tinyurl.com/88h28gr
Date Published: May 14, 2012

In this May 2, 2012 photo, Illinois Gov. Pat Quinn speaks to members of the Illinois Retail Merchants Association at a luncheon in Springfield, Ill. Quinn recently lit a fire under the simmering questions of what Illinois will do about climbing pension and Medicaid costs. He proposed cuts in both programs and warned that inaction could mean financial disaster for the state. (AP Photo/Seth Perlman)

CHICAGO — Gov. Pat Quinn appealed Monday to an influential group of business leaders in Chicago to add their weight to his push to reform Illinois’ debt-laden Medicaid and public pension systems, describing the plan as a tough sacrifice and an urgent “rescue operation” for future generations.
With barely two weeks left in the legislative session, the Democratic governor has gone on the offensive and turned to unlikely allies in the business community to pressure lawmakers to pass his proposals. On the other side, unions and advocates for the poor say the reforms will hurt the most vulnerable.

Quinn told the City Club of Chicago that the two programs are taking a 39 percent bite out of the state budget this year, putting what he called a “serious squeeze” on spending for other essential government duties: to ensure public safety, provide education and other services and invest in transportation and infrastructure.

“All the other things that we want our government to do, there’s less and less money available,” Quinn said.

But leaders of the state’s public universities are saying too much damage to pension benefits could drive away top faculty talent. In a letter to Quinn, presidents and chancellors of 15 schools urged him not to cut already-earned benefits, guarantee proper state funding for the systems in the future and give colleges time to adjust if they must contribute a portion of the funding.

Medicaid, the health program for the poor and disabled, is currently running a $2.7 billion deficit. The state retirement systems are running a shortfall of $83 billion on the money they’ll have to pay out to state employees in the decades ahead.

To rein in Medicaid costs, Quinn has proposed cutting services for the poor and disabled and cutting payments to doctors and hospitals. To keep from having to cut further, he proposes essentially doubling the tax on a pack of cigarettes.

He wants to control pension costs by having government workers pay more from their paychecks into pension funds, making those employees work longer before they can retire and reducing cost-of-living increases after they leave work.

He said Monday he is sticking by all of those proposals, as negotiations continue in Springfield.

Quinn urged the hundreds of business leaders in the room to join his campaign.

“We want you to call today, call tomorrow, call every day legislators even if you don’t know them ... to let them know that the stakes are very high,” the governor said.

Quinn’s proposals have gained support among many of the state’s business leaders.

On Monday, Chicago-based energy provider Exelon Corp. and electricity utility ComEd voiced support, saying “the current structure is in dire need of change.”

The letter from the universities, dated May 3, says pension reform must not hurt their “ability to retain and recruit talented faculty and staff” and “must respect constitutional protection” against reducing retirement benefits that have already been earned — a major factor in the debate.

The letter lists seven “objectives” for a pension package, from pronouncing a “clear plan” to ensure the state doesn’t fall behind again to limiting new rules universities must follow that come without state funding to implement them.

“We’ve been heard and I think we have a place at the table,” Governors State University President Elaine Maimon said. “I don’t know at all whether we’ll like the outcome.”

Associated Press political writer John O’Connor contributed to this report from Springfield.

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