Civic Federation rips Quinn's proposed budget

A business-oriented government watchdog agency based in Chicago came out in opposition today to Gov. Quinn's proposed 2011 state budget.

The Civic Federation's Institute for Illinois' Fiscal Sustainability released an analysis rejecting the budget "because it is unbalanced, relies too heavily on borrowing, doesn't address $6.2 billion in unpaid bills, and would exacerbate the state's structural deficit."

In something of a surprise for an agency devoted to business vitality, the Civic Federation recently supported Quinn's call for an increase in the state income tax to ease cuts in education and local government funding. While the new report did not withdraw that support, it took issue with Quinn's budget because "the revenues from the tax increase would not be spent to fully fund the pensions or to significantly reduce the $6.2 billion backlog of unpaid bills that are threatening state service providers."

While the report praised the state's new two-tiered pension system, creating a new, cheaper pension plan for state employees hired starting next year, it urged additional reforms, "including a two-tiered system for police and fire pensions and changes to the funding of all public pensions."

Mainly, however, the report attacked Quinn and the General Assembly for not doing more to cut spending. While it praised $2.2 billion in cuts, "primarily on education," it cited $636 million in proposed spending increases, and it dismissed the $30.5 billion, five-year capital budget approved by the General Assembly last year as "irresponsible."

"Setting Illinois on the path to fiscal sustainability will require deeper spending cuts, rejection of borrowing and debt to fund operations, fully funding the state's pension obligations, and a real commitment to eliminating Illinois' unpaid bills," said Civic Federation President Laurence Msall.

Republican gubernatorial candidate state Sen. Bill Brady of downstate Bloomington hailed the report as "a wake-up call for Gov. Pat Quinn to finally drop his 33 percent income-tax-increase plan and instead make meaningful cuts to government overspending."

The report was especially critical of plans to borrow $4.7 billion and perhaps $1 billion more to cover the budget shortfall, stating it threatened to send the state into a spiral of debt in which its debt rating would decline, resulting in higher lending rates, even as it was borrowing more money.

"The governor's recommended budget falls short of the goal that must be a top priority for all state leaders - to stabilize the state's finances," Msall said. "Borrowing $5 (billion) to $6 billion for operating expenses neither balances the budget nor helps ensure next year's budget crisis will be any better. The Civic Federation urges our leaders in Springfield to produce a full-year, balanced and sustainable budget for FY 2011 that does not make the situation worse."