Today the Illinois House adopted a budget framework for fiscal year 2013. The framework had bipartisan sponsorship, but unfortunately adopts an overall spending target that is still far too high. What is good about the budget is that it acknowledges the overwhelming burden of the unsustainable Medicaid program and takes steps to slow the growth of the unpaid doctor bills. However, it shows no sign of reducing state pension costs and appears to leave other opportunities for savings on the table.
Here are the key takeaways from the House resolution:
- The overall spending target still is far too high. At more than $33 billion, this budget does not get Illinois’ spending problem under control.
- Rather than using the temporary tax hike as a cushion to pay down bills and readjust spending to sustainable levels, the state’s backlog of bills will continue to climb.
- Legislators who support the sunset of the 2011 income tax hike cannot and must not support a budget of this size.
- While the House resolution attempts to slow the growth of unpaid doctor bills within Illinois’ Medicaid program, it pushes more of this year’s bills into next year. According to estimates provided by the Department of Healthcare and Family Services and an analysis by the Institute’s Jonathan Ingram, the Medicaid program will need $9.7 billion in general revenue funds this year just to keep from going further into debt.
- The House resolution assumes a $2.7 billion cut in the Medicaid liability, although no one seems to know what those reforms will look like. Assuming those cuts actually happen, the Medicaid program will need $7 billion from the general revenue fund this year. The House resolution only appropriates $6.6 billion. That leaves nearly $400 million of this year’s Medicaid bills that will be pushed off until next year.
- If $2.7 billion in Medicaid savings aren’t found, the House Resolution does stipulate that other areas will be reduced by the amount needed for Medicaid. Without significant Medicaid reforms, appropriations for other areas will need to be reduced by as much as 17 percent.
- It has been widely acknowledged that the state’s pension costs are unsustainable, but based on this budget proposal there is no indication that the state intends to reduce those costs in 2013.
The table below compares the House’s 2013 framework to the fiscal year 2012 projected budget, as well as Gov. Quinn’s 2013 budget recommendation and the Institute’s Budget Solutions 2013.
Budget comparisons of 2013 House resolution, the 2012 projected budget, the governor’s 2013 recommendation and the Institute’s Budget Solutions 2013 (dollars in millions)