Quinn to call for cuts, pension changes, no gas tax increase

Ryan Keith

Gov. Pat Quinn next week will propose cuts throughout state government that could include layoffs, a trimmer pension plan for new state employees, and a major construction program not funded by a gasoline tax increase, he said Tuesday.

Quinn will present a new budget proposal to state lawmakers one week from Wednesday. The state’s budget mess is historically bad -- a budget hole of possibly more than $9 billion -- and Quinn made it clear the solutions he’ll propose won’t be easy to accept.

“We’re going to have some tough news on choices that we’re going to have to make,” Quinn told reporters after a news conference in his Statehouse office.

The state’s major employee union quickly promised to fight any effort to change the pension structure or lay off workers. A Springfield lawmaker said he also has doubts, but wants to give Quinn his say.

“As a Republican, we have to be open to anything that Gov. Quinn proposes,” said Sen. Larry Bomke, R-Springfield. “It’s imperative that we work with this governor.”

Senate President John Cullerton, D-Chicago, said he’s onboard with changing the pension system but he thinks government will be forced to cut only if there’s not enough support for tax increases. He said it sounds like Quinn will be proposing an income tax increase.

“If there’s no tax increases, we will cut,” Cullerton said.

Quinn again dodged most discussion of tax increases, instead focusing on what he said is a need to rein in government spending.

“We have to cut, cut and cut costs in the budget,” Quinn said. “That’s really the number one focus. The first thing you do is look for every opportunity to economize and to save money to the taxpayers.”

Quinn said public safety, education and health care are his top priorities, but layoffs and cutbacks elsewhere are possible.

“Some of the frills of government will have to go away,” he said.

Quinn said he’ll propose creating a two-tiered pension system. Pensions for new employees wouldn’t be part of a 401(k)-type setup, he said, but would be structured like the federal Social Security system, Quinn said without providing more details.

The governor expects a pushback from powerful state employee and teachers’ unions.

“I’m sure we’ll come to a good conclusion,” Quinn said of talks with the unions.

Anders Lindall, a spokesman for the American Federation of State, County and Municipal Employees, said state employees won’t let state officials punish workers for the state’s past money mistakes.

“Cutting pensions and undermining retirement security for state employees is the wrong path, and AFSCME will oppose any unfair, two-tiered system,” Lindall said. “You don’t force employees who do equal work to receive unequal benefits.”

Lindall also said layoffs will only exacerbate problems created by the previous loss of thousands of state government jobs.

“This economic downturn is not the time to further undermine those services or to throw more Illinoisans out of work,” Lindall said.

Bomke echoed concern about the fairness of changing pension plans. He said the only possibilities he sees for trimming the budget are in programs expanded in recent years.

“I honestly don’t know where he would cut,” Bomke said.

Quinn said he will propose a $25 billion program for capital construction throughout the state. Lawmakers have talked about raising motor fuel taxes to pay for such a plan, but Quinn says he’s looking at another “solid” funding source he wouldn’t disclose.

The governor said he’ll make it a priority to decrease the time health care and social service providers have to wait to be paid. The state owes such providers billions of dollars.

Quinn is also looking at increasing the state’s personal exemption on income taxes, which now allows taxpayers to cut $2,000 off their income for tax calculations. That could give him cover for an income tax increase by giving lower-income families a bigger break.

“We need to make it a lot more generous,” Quinn said of the exemption at an event held later Tuesday in Springfield. “While nobody likes paying taxes, having a system that is fairer than it is today, I think, is priceless.”

Ryan Keith can be reached at (217) 788-1518 orryan.keith@sj-r.com.