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By DIANE ROSS Thompson's budget: pain for all THE BUDGET was every bit as bad as Gov. James R. Thompson had said it would be when he outlined it February 8 along with his tax increase proposals. The budget Thompson revealed on March 2 for fiscal 1984 calls for the General Assembly to appropriate $13,917 billion in all funds, including $7,717 billion in the general funds. The general funds appropriations proposed by Thompson is $324 million lower than the fiscal 1983 final appropriations — after his mid-year cuts. Various departments show up with increases, but these increases, totaling $313 million, are mainly for obligations the state can't avoid next year. The gross cuts in general funds appropriations cuts for fiscal 1984 total $637 million.
To balance his budgeted revenues against his appropriations, Thompson also wants the General Assembly to eliminate local government's one-twelfth share of the current state income tax. That share is worth $234 million in fiscal 1984. Of the total $637 million Thompson wants to cut, $588 million would come from public aid and education budgets. Out of public aid would come $335 million, chiefly by eliminating the General Assistance program. But the public aid cuts also include: eliminating dental, optometric, podiatric and chiropractic medical services for all welfare clients; freezing reimbursement for all providers of medical services at the level to which it was reduced for fiscal 1983; and continuing the administration's policy of containing costs for medical services to all welfare clients. The cut from elementary and secondary education was $164.4 million; and the cut from higher education was $88.4 million. In both cases, however, the governor did not itemize reductions. He left it up to the Illinois State Board of Education to recommend where to cut general and categorical aid to elementary education; he left it up to the Illinois Board of Higher Education, the Illinois Community College Board and the Illinois State Scholarship Commission to sort out cuts for higher education. The remaining $49 million in the governor's cuts would come from a number of other agencies. The deepest would be the $18.5 million cut from the Department of Mental Health and Developmental Disabilities, chiefly by reducing operating funds for state institutions, but also by reducing grant funds for locally delivered services. He would also cut $7.2 million from the Department of Central Management Services, $6.6 million from the Department of Transportation, $3.9 million from the Court of Claims, $3 million from the Capital Development Board and $1.2 million from the Department of Children and Family Services. Two agencies were entirely eliminated by the March 2 Thompson budget: the Illinois Arts Council and the Illinois Guardianship and Advocacy Commission. The former received an appropriation of $2.8 million in fiscal 1983 for subsidies to public and private arts interests. The latter, providing legal counsel to wards of the state, received an appropriation of $2.7 million in fiscal 1983. In terms of state jobs, Thompson's total cuts would appear to eliminate as many as 2,000 positions, including 1,000 in higher education. But Thompson's fiscal 1984 budget — his seventh and Illinois' fourth under recession — may be only a phantom budget. It appears designed to cut services from almost every area of interest in the state, and it indicates how severely services will have to be curtailed if taxes are not raised. It shows where Thompson would cut if no new revenue is forthcoming. But there is scant information on which state services would receive increased appropriations if increased taxes provide new revenue. It appears Thompson would restore programs to the original fiscal 1983 levels since the governor told the legislature March 2 that "failure to restore services now will result in double or triple the cost and time to regain a decent level of services in the future." May 1983 | Illinois Issues | 12 As presented, Thompson's $7,717 billion general funds budget sets low records on all accounts. It's 7.2 percent below the revenue he projects for fiscal 1983, 5.7 percent below what he proposed for the previous budget year, 4 percent below final (as cut) fiscal 1983 appropriations, and 10 percent below what Thompson projects will actually be spent in fiscal 1983. 'Most likely' revenues On the revenue side, Thompson insists the picture he paints in his budget is neither the best nor the worst scenario for fiscal 1984, but rather the "most likely." In early March the governor's Bureau of the Budget (BOB) projected general funds revenue for fiscal 1984 at $8,383 billion (exactly equal to his projected spending). The fiscal 1984 budget also shows the general funds beginning and ending balances at $150 million. For the record, Thompson's budget shows total revenue in all funds at $12,340 billion and spending from all funds at $12,306 billion. Thompson delineates $650 million in obligations that must be put into this budget at the painful price of cutting elsewhere. Unless, he says, there's a tax increase to easily pay these debits and restore cuts. Of the $313 million in budgeted increases in general funds appropriations, $274 million are earmarked for three of these obligations:
These account for only part of the obligations; there's another $118 million owed to schools for the payment deferred, a $40 million increase in debt service and roughly $200 million he plans to borrow to finish fiscal 1983 in the black. Thompson's call for raising taxes is an about-face in his six-year-old fiscal policy of cutting spending. He did not boast of his balanced bare-bones budget this time: "This budget is balanced fiscally. . . . But this budget is not balanced in terms of human services. . . . This budget is not balanced in terms of educational services. . . . This budget is not balanced in terms of transportation services. . . . "In candid terms, this budget is inadequate to meet the needs that a good, decent, compassionate, and honest government ought to provide its citizens. . . . We have reached the point in the race against recession where you and I literally must assume the task of newly defining the role of state government in Illinois." Thompson's overall strategy has been to trim all services rather than cut out any services, but he told the legislature March 2: "I have run out of areas to cut at least where there are meaningful dollars left." That appears to be one of Thompson's reasons to push for new revenue from increased taxes. He suggests he's already trimmed the fat in across-the-board cuts, and that the $650 million in obligations perhaps forced him to slice the local government share of the income tax right out of the pie. Where else could he cut? The big state programs — education, public aid, mental health, corrections and children and family services — account for 75 percent of all general funds spending. The remaining 25 percent of state government programs in all other agencies would have to be cut almost completely to come up with $650 million.
May 1983 | Illinois Issues | 13
Major cuts But why did he pick the programs he did to highlight the fiscal dilemma? Local revenue sharing, General Assistance, state aid to education, grants for locally delivered mental health services. Thompson doesn't want to cut local revenue sharing: "This budget takes a step backwards from the state-local partnership we've created." At the same time, he said: "Under the limits of this budget the state simply can no longer afford to continue underwriting local services." Of course, services would have to be cut by local governments — without the state income tax revenue, or, Thompson suggested, "In most cases, the only alternative will be an increase in local property taxes . . . ." Thompson, however, has suggested another alternative: Raise the state income tax, and the statutory one-twelfth share that goes to local governments would swell in proportion to the larger revenue pie, which might be termed a method of providing property tax relief. Thompson's reasons for cutting the General Assistance program may be more governmental than political, but only slightly so. General Assistance is one of public aid's smallest programs with a fiscal 1983 cost of about $275 million, and it is one that receives no federal reimbursement. The clients, for the most part, are young, healthy and only temporarily down on their luck. Of the nearly 140,000 served in fiscal 1983, however, 125,000 live in Chicago. Republicans and downstate Democrats might be persuaded to sacrifice the program, but not the Chicago Democrats, who hold the pluralities in both the House and Senate. Thompson doesn't really want to cut education either (maybe no one does) — especially since elementary and secondary education has already been cut $592 million and higher education $163 million over the previous two fiscal years. As he proposed these cuts to the General Assembly, he pleaded with the audience like a prosecutor not really wanting the jury to penalize the defendant: "But the greatest consequence — the larger danger — is that we will be underfunding education just at a time when we expect it to take the lead in the fight for economic renewal and the diversification of our economic base for the next century." He went on testifying like a character witness: "We expect our elementary and secondary schools to teach more math and science so our children and grandchildren can compete. How can they under this budget? We expect community colleges to train displaced workers to give them and their families a second chance in life. How can they under this budget? We expect universities to lead the high-tech renewal of Illinois as we lose manufacturing employment. How can they under this budget?" Cutting mental health won't save much in revenue since its budget is one-fifth the size of public aid's. But, as with the other cuts, Thompson knows its value is high in snagging votes to raise taxes. Of all the so-called "human" services, none elicits more sympathy than that for the mentally ill and the developmentally disabled. And Thompson said it well: "... these reductions tell another story, real live stories of services not met, helpless individuals left with no alternatives and family lives which are critically altered.
I have received hundreds of letters. . . from worried parents, concerned citizens and desperate patients who write out of fear and frustration of having no place else to turn." Mental health suffered a $17 million decrease in fiscal 1982, gained $8 million despite the cuts in fiscal 1983, and would suffer an $18 million decrease in fiscal 1984 under Thompson's budget. There was an uproar last year over cuts which forced Adler, Bowen and Dixon state institutions to close. Now Thompson's budget proposes cuts in state funds to local clinics, which are already treating the vast majority of these clients, those with short-term illness. The political potential in cutting mental health was revealed immediately: Within minutes after the governor delivered his Budget Message, House Speaker Michael J. Madigan announced he "may" reconsider his position against the kind of permanent increase in the state income tax that Thompson has called for. Madigan's reason? He cited the cuts Thompson would make in mental health. May 1983 | Illinois Issues | 14 Unrealistic budget? Thompson prides himself on being a realist, fiscally, and he took pains to point out that his fiscal 1984 budget does not assume the General Assembly will pass any kind of a tax increase at all, a position he justified by arguing the Illinois Constitution requires he submit a balanced budget. He also argues that if he would assume a tax increase, and if the legislature would fail to pass one, he would be forced to cut the budget in the middle of the appropriations process. But Thompson's fiscal 1984 budget remains, perhaps, his most unrealistic. What he didn't say in so many words March 2 is that the budget does assume the General Assembly will pass — or repeal — the necessary statutes to make the kind of cuts he proposes. Of the total $637 million he wants to cut in general funds appropriations, at least $510 million require the legislature make statutory changes. What Thompson was really telling the General Assembly with his fiscal 1984 budget was this: If you don't want to raise taxes, services will be cut. If you don't want to cut what I propose, you'll have to cut it elsewhere. What if the General Assembly doesn't raise taxes? What if it keeps the $234 million in local government ; revenue sharing and the $276 million for General Assistance and not cut the $510 million elsewhere? Then which programs would Thompson attempt to salvage or sacrifice with his veto powers this summer? There is little doubt that Thompson hopes he'll never have to make these decisions. But having revealed how high he would raise taxes, he may have to put all programs in some kind of priority order if he wants to clearly delineate the winners under his tax proposal and the losers under his March 2 budget. He must sell a budget before he can sell the income tax. The other big hunk of the budget — and tax increase package — is transportation. Here lies another option for the governor to sell even the income tax increase. Lawmakers have been known to change their minds overnight when deals include road and bridge projects for their districts. And what of the other three years of Thompson's third term? It may be important for him to reveal his priorities for spending in those years in order to sell any tax increase for fiscal 1984. In early March Thompson promised to unveil a second, "augmented," budget, very likely by month's end, but most likely not until after the mayor's election in Chicago.□ May 1983 | Illinois Issues | 15 |
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