Democrats and Republicans go back and forth on what size government best fits the job. Size is beside the point. Illinois urgently needs smart government.
What’s going on in Springfield is not a model of smart government. With a FY 2009-2010 $11.6 billion deficit, $90 billion unfunded pension liabilities according to the Taxpayer Federation of Illinois, more billions being borrowed, social services being slashed, our bond rating plummeting, and jobs leaving, Illinois is in a tailspin. If we don’t embark on a new course immediately, if we don’t fundamentally rethink our way of doing things and challenge the status quo, we’ll never recover. Leaving it to the old guard to muddle through the mess they’ve created is not an option.
Gov. Quinn and Comptroller Hynes plans to Tax more, Spend more, and Borrow more will only make our financial crisis worse.
I have a short list of powerful changes, bold solutions that will put our state back on course without raising taxes on the people who want to live here and the companies that want to do business here.
Convert Illinois’ Medical Indemnity Program to Managed Care
Illinois employees are currently enrolled in a medical indemnity program, which means instead of an insurance company picking up the tab, the bill goes straight to Springfield. That might sound like a cushy benefit for state employees, but Illinois is almost a year behind in medical payments totaling over $300 million. The result is that current and former state employees are being overwhelmed with calls from creditors, and are paying their bills out-of-pocket, hoping to be reimbursed by their doctor if the state ever pays up. Not only is it horribly inefficient and stressful for the employees, it’s far more expensive for the state. By converting to a managed care plan, we can save Illinois over a quarter of a billion dollars annually, according to the Civic Federation of Chicago, and greatly improve the experience for those in the system. Savings in excess of $250 million per year.
Eliminate the Tax Exemption on Retirement Income over $50,000
Presently, Illinois is one of only four states, of the 43 states with a state income tax, to offer a full exemption on retirement income. It’s a luxury we can no longer afford. The Civic Federation of Chicago states that taxing all retirement benefits at 4% would generate $1.3 billion. I propose leaving the state income tax rate at 3% and providing an exemption for the first $50,000 of retirement, while taxing benefits in excess of $50,000 would generate $750 million per year.
Normalize the State Payroll
Did you know that a groundskeeper working for the state earns about $40,000 while in the private sector that same worker earns $24,000? According to the U.S. Bureau of Labor Statistics, state workers in Illinois earn, on average, 12% more than their counterparts in the private sector. Not in Illinois when I’m governor. The Illinois Policy Institute estimates that normalizing the state payroll would save the state between $580 to $660 million per year.
Downsize and Modernize
I’d like to invite a team of business leaders and business consultants with a proven track record of downsizing large corporations to take a close look at the state of our government. Imagine what they’d find – people on the state payroll who are paid well yet do little, deadbeat employees who nonetheless are the son of a committeeman or the brother of an alderman, over-priced contracts awarded to big campaign contributors. And on and on. When you eliminate patronage jobs and cut government departments down to the bare essentials, the state’s savings go beyond the terminated salaries. Those positions also carry expenses far into the future due to pension and medical benefits that state employees receive until they die.
Modernizing should be a regular, ongoing effort in state government as it is in the private sector. We should be utilizing the technological advances of the last 25 years to the fullest extent possible to bring our state government into the 21st century. Many state services currently conducted over the phone or in person could be provided on-line. The city of Los Angeles just switched its entire operation to gmail. Think of the savings. We should also consider going paperless for numerous state run agencies that provide information to the public. It’s more efficient, it’s cost effective, and it’s green.
If the state of Illinois is going to win the confidence and trust of its people and its business community, we must run a leaner, smarter operation. When employers, insurance companies, and labor unions, all see state government cutting waste, checking abuses, and making smart choices, they’re more likely to following suit.
