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News
Cross: Era of 'pet project' funding over : News : Oswego Ledger-Sentinel : Hometown Newspaper for Oswego and Montgomery, IllinoisCross: Era of 'pet project' funding over
| Republican House Leader details state budget challenges
| by Tony Scott
| 3/1/2012
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The top ranking Republican in the Illinois House of Representatives told a group of business leaders in Yorkville last week that the days of politicians promising funding for local pet projects are now in the past.
State Rep. Tom Cross, R-Oswego, spoke to a group of business leaders and elected officials at a breakfast organized by Castle Bank at the White Tail Ridge Golf Club in Yorkville last Friday. During the talk, Cross addressed the challenges facing state government, including reforming its pension system, but also had a word of caution for the elected officials in the room.
"I think your expectations of what is coming from us needs to change somewhat," Cross said. "There was a time when people ran for public office, and all they did was promise all the things they were gonna do for you: I'm gonna bring more money back to my district, I'm gonna do this for this group. And a lot of those groups that we were talking about were all good, they were worthy, but we did that way too much and you expected way too much in many cases."
He continued, "And all of a sudden we woke up one day where that had gone on for years, and decades, and it happened at the national level. The economy, of course, started to take a dive, and we don't have the money and we don't have the luxury and we don't have the ability to continue that."
The politicians had to take care of their political commitments and contributors, too, Cross said, and the state ended up "in this huge mess."
"For any elected official who's making promises about what he or she's gonna get their district money-wise, those days, really, should be on hold for a long, long time, because it's gonna take a while to get out of this mess," he said.
'A very uncomfortable
conversation' on pensions
Cross said the state's unfunded pension liability adds up to around $85 billion, and that Illinois has the worst-funded pension system in the United States.
Cross recalled that Gov. Jim Edgar made changes to the system in 1995, requiring the state to get on a payment schedule to lessen the liability by 2045. However, Cross said the payments at the beginning were smaller and have gotten larger as the years went by.
Cross said that, this year, the state will spend over $7 billion on pension related items, including $5.5 billion for the scheduled pension payment set up by Edgar.
Cross explained that, in the 1980s, the General Assembly increased the pension system's cost-of-living adjustment (COLA) from two percent to three percent. They also changed from a system that calculated simple interest to one that added on compounded interest over time.
With people living longer, it means that retirees are collecting more pension funding, he said.
"It's not unrealistic to be in retirement for 20 or 25 years," he said. "When you have a three percent COLA that compounds annually, you double your pension."
And the pension liability continues to grow at rate of $6 billion a year if we do nothing, Cross said.
"It's a very uncomfortable conversation, one of those things you don't want to have, but we're gonna have to say to current employees, 'You're going to have to pay more, or we're gonna have to make some adjustments somewhere, because you're not adequately paying for the cost of your benefit," he said.
Cross said he has filed a bill that says, going forward, if a pension earner wants to stay in the current plan, they have to pay more or work longer and get a smaller COLA rate, or they can get out of the current plan and go into a 401k-like plan.
Another large financial hit for the state is Medicaid funding, according to Cross.
He said the General Assembly is approving policies requiring pay stubs to prove income qualifications and residency verification, but that the federal government has to sign off on those Medicaid requirements.
He said that Gov. Pat Quinn has not sent the waiver requests to the federal government and that he will be "aggressive" with him to do that.
When asked about facility closings proposed by Quinn in his budget address last week, Cross suggested that the governor might not follow through on his threats.
"He did this about a year ago - he said 'I'm going to close all these facilities,' and ended up only closing a couple," he said. "And I don't want to be disrespectful of him. But he kind of has this approach of throwing out huge bombs and then only following through on a couple of things."
Cross said that the governor's office has stated they will need to study some of the closures, such as the closing of the women's prison in Dwight, and that such a study could take a year or more.
"I don't know what will ultimately happen," he said. "I think there are going to be some closures. I just don't know where, and we just have to figure out the impact. And does it save us money? We just don't know the analysis yet."
However, he said Quinn does have the authority to close such facilities, and that he was right to consider those measures in light of the budget situation the state is facing.
"I don't think he's out of line to put this stuff on the table," Cross said of Quinn.
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