By: State Senator Chris_Lauzen

We have lost our way. Perhaps if we returned to commonsense household rules of financial responsibility, those who are in charge of the state's finances would come up with a balanced budget on time.

The recipe for an impending fiscal disaster in Illinois is to borrow, tax, and spend, especially on lucrative public employee pensions and unmanaged Medicaid.

But, before we explore what's happening in the state budget, let's take a pop quiz:

1. If your family faced a financial deficit, i.e. family expenses exceeded income, would you spend even more? Of course not, but the state is spending $1,000,000,000 more this year than last.

2. Would you double the mortgage on your home in order to speculate in the stock and bond markets with 75% of the loan proceeds and then spend the other 25% on car payments, groceries and even the wasted luxury of a cruise? Of course not, but that's what the current administration did this year with the "luxury item" being wasteful government spending.

3. Would you count as "family income" in this year a projected profit from speculation in the stock and bond markets minus your mortgage cost over the next 30 years? These are too easily answered "No"…but again, that is what Governor Blagojevich did this year.

4. Would you make new spending commitments for your family before you had fulfilled existing obligations? No.

5. Should those who borrow and spend the money be responsible for paying it back, or should they shift the burden to their children? Thomas Jefferson asserted that it is immoral, in his word, for one generation to shift its debt onto another.

6. Would you ever hide the checkbook from your wife or husband and make them argue about where the money is being spent? Not if you want a happy, productive family.

There are some who argue that the solution to government deficits is to raise more taxes and fees. Usually, the folks who make this case are the same who get the money or are empowered by allocating it.

However, some politicians have proven that they have an unquenchable thirst to spend other people's money. No matter how much you give them, they spend 5-10% more…always! Therefore, the problem is not taxing citizens more, but rather how we spend the money that you give us.

Short-term borrowing to pay bills on time and long-term government borrowing have literally doubled since Governor Blagojevich has been in office. Over the next thirty years every man, woman, and child in Illinois will pay $4,300 each for the borrowing incurred in a single vote last May.

Additionally, the legislative majority's unwillingness to say "No" has led to a terrible imbalance between some state employee pension benefits and those received by people outside of government. For example, some state employees receive approximately 80% of their gross pay at age 50, after working for 26 years. Imagine starting your career at 24, working 26 years, and then receiving 80% of your gross pay at the relatively young age of 50, without being required to come to work ever again! Typical private sector pensions are 35-40% after a 40-45 year work career.

So, state government is allowing some of its workers to work half as long and get paid twice as much in pension benefits. The real "backbreaker" in future budgets will be this unfunded pension obligation that has grown from $5B twenty years ago to a staggering $43B this year.

Medicaid is another state “budget buster.” Just in the past two years and during the worst fiscal crisis in Illinois history, Medicaid spending has been increased by $1,200,000,000 (that’s $1.2B!). Although the number of people on welfare is at an all-time low of 38,500 cases, Illinois has an all-time high number of people on Medicaid. Eligibility for the amount of money paid for benefits have increased. Since FY1999, welfare caseload is down 73%, but Medicaid enrollment is up 38%.

One out of every seven people in Illinois is now on Medicaid. Two of every five births are covered, one out of every three children and two of every three nursing home residents, too. A family of three earning $31, 300 per year is eligible. A family of four earning $37,700 is eligible. And, a family of six earning $50,400 is eligible for Medicaid. Some experts theorize that Medicaid coverage is becoming so attractive that it is crowding out some private health insurance plans. Why will especially small businesses shoulder the expensive burden of providing health insurance if state government, with your tax dollars, step in to subsidize this need?

Medicaid costs have escalated at an average annual rate of 8%, or 3 times the cost-of-living, since FY1999. At this rate, the program cost will double every 9 years. Its proposed level of spending this year is $6.3B.

Generally speaking there are currently no controls on behavior for those who use Medicaid. See any doctor that will see you at anytime, visit any emergency room at any time, no referrals for care required, and no meaningful co-payments are required. While our surrounding states have an average 67% of Medicaid “Managed Care”, Illinois has only 7%.

Governor Blagojevich did not need one Republican vote in the entire legislature to pass a balanced budget on time. The failure of Downtown Chicago Democrats to pass a budget on time now jeopardizes summer reading programs in our area, the funding of necessary social service and transportation projects, and squeezes school administrators trying to plan next year's education budgets.

When the legislature is called back to Springfield on Wednesday, we need to stop the budget bleeding.

Past Columns: 1, 2

Contact info:

State Senator Chris Lauzen
52 West Downer Place, Suite 201
Aurora, Illinois 60506

Phone: 630/264-2334
Fax: 630/264-1566
chrislauzen@lauzen.com

http://www.lauzen.com/