Gov. Quinn proposes pension reform, education cuts in budget address

Illinois Gov. Pat Quinn (left) speaks to an attendee of President Barack Obama’s post-State of the Union speech at Hyde Park Academy. Quinn proposed steep cuts and pension reform during his Fiscal Year 2014 budget address Wednesday.

Daily file photo by Susan Du

Illinois Gov. Pat Quinn (left) speaks to an attendee of President Barack Obama’s post-State of the Union speech at Hyde Park Academy. Quinn proposed steep cuts and pension reform during his Fiscal Year 2014 budget address Wednesday.

Jia You, Assistant City Editor

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Gov. Pat Quinn (Ill.) delivered the state’s “most difficult budget” during his Fiscal Year 2014 Budget Address on Wednesday.

The Democratic governor proposed steep budget cuts and called for immediate pension reform during his speech at the state Capitol, proposing a $62.4 billion budget that would slash education by $370 million.

“This year’s budget is a tough pill to swallow,” he said. “But it’s only managing the symptoms of a grievous condition that threatens the fiscal health of our state.”

Quinn blamed legislative inaction for the state’s looming pension debt, which he said is costing taxpayers $17 million a day. He urged legislators to vote on a comprehensive reform bill, which he said he would sign into law immediately.

“Every day you wait to vote on this matter, the problem gets worse,” he said. “Illinois taxpayers are losing patience with your lack of action.”

Quinn outlined four key components to comprehensive pension reform. Illinois must pay its full pension amount every year and seek additional solutions as a public employer, he said.

He also proposed raising employee contribution to pensions and suspending the cost of living adjustment for those with higher pensions until the system achieves better balance, calling the current 3 percent annual compound rate “unsustainable” for taxpayers.

Quinn also pledged to reduce the state’s $10 billion backlog of bills by closing three corporate tax loopholes, which he said would earn the state $445 million a year in revenue.

“Why should we give costly, ineffective loopholes to some of the biggest and most profitable corporations on earth, when we have bills to pay?” he said.

To cut costs further, Quinn said he would issue an executive order this week to eliminate or consolidate 75 governmental boards deemed redundant.

Despite the proposed deep cuts to education, early childhood education and Monetary Award Program scholarships for the state’s college students would be left intact, Quinn said. He also suggested using the state’s gambling revenues to fund education.

The proposed budget would also preserve funding for violence prevention programs and invest an additional $25 million in mental health care, he said.

Quinn ended his speech quoting from the movie “Lincoln.”

“And so I ask you, as our greatest president Abraham Lincoln asked in this year’s film: ‘Shall we stop this bleeding?'” he said.

State Sen. Daniel Biss (D-Evanston) said in a news release the proposed budget highlights the need for comprehensive pension reform. Biss co-sponsored a bipartisan pension reform bill with state House Republican Leader Tom Cross (R-Oswego) and Rep. Elaine Nekritz (D-Northbrook) last week.

“Our top priorities are now experiencing the dire consequences of inaction,” Biss said in the statement. “Heartbreakingly, this includes our children and our essential safety net.”

Illinois’ labor union coalition We Are One Illinois issued a statement opposing Quinn’s budget after his speech, urging the governor to close corporate tax loopholes instead of cutting public services.

“We appreciate that Gov. Quinn has appeared to embrace critical elements of our plan, but we disagree with the false choices framed in the Governor’s proposed budget,” the coalition said. “It is misguided to blame the modest pensions earned by teachers, police, caregivers and other public employees for harmful cuts to education and essential public services.”

Doug Whitley, president of the Illinois Chamber of Commerce, said the chamber applauds Quinn’s call for pension reform but objects to raising corporate taxes, which he deemed unlikely to pass.

“These proposals sound like a desperate move rather than a reasonable and rational conversation about what makes sense,” Whitley said, arguing Quinn’s proposal to tax foreign dividends contradict’s Congress efforts to promote more international trade. “We don’t think that tax policy should made by unilateral decisions on the part of the governor.”

The Illinois General Assembly will pass a budget this spring.