CHICAGO - On Tax Day 2014, the Illinois Policy Institute released "Budget Solutions 2015," a plan to balance Illinois budget and turnaround Illinois fiscal condition. Some of the key reform points the plan makes is:
Balanced budget | Illinois hasn’t had a balanced budget since 2001. Illinois needs a more stringent and enforceable balanced budget requirement that will force lawmakers to rein in spending.
Spending limit | Illinois government is spending more money than it takes in and must learn to live within its means. State spending would total $24 billion, or $10 billion less than the $34 billion in 2012 if the state would have limited spending to the rate of inflation and population growth since 1979. Illinois needs to enact a spending limit tied to the growth of population and inflation.
Spending cuts | Across-the-board spending cuts of 4.9 percent would save the state $1.8 billion in fiscal year 2015, and cuts of 9 percent would save the state $3.1 billion in fiscal year 2016.
Education | More than $870 million of Illinois’ general fund for education subsidizes funding that’s not based on district need. Eliminating inappropriate subsidies and returning the General State Aid to its original intent – paying school districts based on need – would save more than $870 million.
Medicaid | Access to high-quality care for Medicaid enrollees has collapsed, even as record amounts of taxpayer dollars are spent on this program, which covers one-fourth of the state’s
population. Giving patients meaningful choices improves health outcomes and increases satisfaction. In addition to reinstating a private contractor to scrub Illinois’ Medicaid eligibility rolls, these reforms can save as much as $2 billion.
Retiree health insurance | State government retirees contribute little to nothing toward their health-insurance plans. Requiring retirees to pay at least half of their health-insurance premiums and eliminating this benefit for new workers going forward would save as much as $800 million.
State payroll | Illinois is broke and skyrocketing employee compensation costs are at the center of the crisis. Reducing the cost of government by reducing payroll costs 10 percent would save as much as $300 million.
Revenue sharing | Eliminating ineffective revenue-sharing programs between state and local governments would save up to $1.7 billion.
401(k)-style retirements | Defined benefit systems are inherently unpredictable and unmanageable, and are the root of Illinois’ pension crisis. Ending defined benefit pension systems, protecting already-earned benefits and moving workers to 401(k)-style plans going forward is the only way to protect government workers and taxpayers. Comprehensive pension reform would save the state as much as $2 billion, compared with the current official pension payment.
Means-test COLAs | More than 8,000 government retirees receive cost-of-living adjustment, or COLA, benefits on top of annual pensions that exceed $100,000. Doling out COLAs to some of the state’s wealthiest retirees threatens the benefits of the state workers who need them most. Pension reform must means-test the COLAs of career state workers.
Retirement age | More than 63 percent of Illinois’ 200,000 government pensioners retired at or before the age of 60. Pension reform must align the retirement age with the Social Security retirement age while protecting workers currently nearing retirement.
Cost-shift | Teachers and university employees are not state employees, but the state pays the employer’s share of their pensions. One unit of government hands out benefits while another pays for them, eliminating spending accountability. This practice must end.| Illinois hasn’t had a balanced budget since 2001. Illinois needs a more stringent and enforceable balanced budget requirement that will force lawmakers to rein in spending.