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The State of the State
The governors budget: It's his
By PEGGY BOYER LONG Every state budget has a story line. The governor gets the first draft and, not surprising, he's the hero of his own tale. Jim Edgar announced his $33 billion spending plan for Fiscal Year 1996 on March 1. For him, the key plot elements are simple: no new taxes and more money for schools; more people to guard criminals and fewer people handing out welfare checks. The subtext remains the fundamental Republican tenet that government should get out of the social welfare business. Certain programs — those aiding low-income families — can be trimmed. Others — those providing services to children and people with mental disabilities — should shift to the private sector. (We can dream about privatizing schools and prisons later.) In fact, "privatizing," "de-institutionalizing" and "downsizing" are ready terms in the Edgar lexicon. He launched his first budget by scaling back the size of his own office staff. In this budget, after four years of nipping and tucking, he's proposed consolidating three agencies and squeezing a net total of 80-some positions out of the state's 82,000-plus work force. Modest by current national Republican standards, to be sure. But, then, governing is hard work. A budget is a political story, and Edgar has had time to fine-tune key themes. He's holding the line on the tax bite and on the size and scope of government because that's what voters want. And, as Edgar tells it, every budget tale has plenty of dramatic tension, even a villain or two. He's been forced by circumstances beyond his control, he says, to make tough decisions on how to spend — or not spend — the available dollars. Families continue to crumble, taxing the state's capacity to cope with an increasing number of abused and neglected children. Prisons are filling faster than the state can build them. And Washington bureaucrats — the villains of choice — sit on their hands, in effect tying the governor's hands in his efforts to reduce a mountain of bills from hospitals that treat poor people. Further, the economy is cooling, meaning revenue growth will be modest in the budget cycle that begins July 1, and it's likely to be less the following year.
The administration predicts that an additional $620 million in general funds will be available for spending on state operations and programs in the coming fiscal year. That revenue, from income and sales taxes, increases with inflation, and when more people are working and buying things. This budget year, more people were working and the state's jobless rate was at a 20-year low. But the proposed budget assumes that high interest rates will contribute to a slowdown in consumer buying. The U.S. economy is projected to grow by only 2.4 percent. Growth in income and sales taxes for this fiscal year was pegged at 6.2 percent. The projection for next fiscal year dips to 5.6 percent. What's a governor to do? Apparently, bank on partisan cohesion in a Republican-controlled legislature. And ignore the Greek chorus. It may be a safe bet. Stunned by the scope of their defeat in November, the Democrats' criticism has been muted. Special interest groups seem temporarily sidelined by the fast track. And Republican lawmakers are motivated to get out of Springfield by the end of May. Edgar has, in short, drafted what he hopes will be a political set piece, a budget designed to get him through the next chapter of his administration. Still, if the Democrats are eager to recast the moral of this story, even some 8/April 1995/Illinois Issues Republicans are feeling the urge to rewrite. Here are a few subplots:
• Edgar says he's allocating more dollars for schools than they've gotten in the last five years. And the most they've gotten without a tax increase. Enter the Greek chorus. Critics say there are so many competing claims for the dollars Edgar has allotted for elementary and secondary schools that only a shrinking portion will be available for general state aid. Elementary and secondary schools would get an extra $195.9 million. But Chicago Democratic Sen. Arthur Berman says the governor doesn't have much to trumpet. Berman is his party's spokesman on the Senate Committee on Elementary and Secondary Education. He says that after subtracting amounts required by law ($59.5 million for teachers pensions, for instance), and after subtracting the governor's shopping list (including $17 million to put computers in schools), only $76.2 million will be left to divvy between general state aid — which benefits poorer school districts — and mandated grants for special needs — which benefit wealthier districts. The wealthy districts tend to be in the Republican-leaning suburbs.
• Spending in the Department of Children and Family Services would go up by 10 percent. Edgar would spend $85 million more in general funds next year than he plans to spend this year. That figure includes a $74.8 million increase to implement reforms in an agency that has all but added "beleaguered" to its official name. The department is responsible for nearly 46,000 abused and neglected kids who have been placed in foster homes and other types of "substitute" care. Over the past few years, a number of children have died while under the department's wing. But in 1991, DCFS agreed in court documents to reduce the number of children each caseworker has to monitor. The department plans to add 106 employees in the coming fiscal year. And Edgar would add $7.8 million to subsidize adoptions, an effort to reduce the state's caseload. But he aims, as well, to cut costs and improve foster care by reducing benefits for unlicensed relatives who take in children. The move comes after the death of a 2-year-old boy who was living with an unlicensed foster mother, a distant relative. Further, Edgar wants to continue to turn more child welfare services over to private care-givers. Currently, 60 percent of the department's caseload is handled on contract by private agencies. The Catholic Conference of Illinois is urging the state to transfer all responsibility for child welfare services to such community-based voluntary agencies as Catholic Charities. The group is proposing that within five years private organizations be given full decision-making authority for planning, case management and provision of care and services. Under the plan, the state would retain oversight and investigative functions.
• Edgar also wants to continue to move people who suffer from mental or developmental disabilities out of state institutions and into private centers. He would close two state facilities. The Adolf Meyer Mental Health Center in Decatur would become a prison. The Ann M. Kiley Developmental Center in Waukegan would be shuttered within two years. Edgar calls for an increase in state
April 1995/lllinois Issues/9
support for community-based programs to accommodate the transfer. Meanwhile, the American Federation of State, County and Municipal Employees vows to fight the closures. According to the union, 475 bargaining unit jobs would be lost. Edgar calls for a $63.7 million increase in general funds for the Department of Mental Health and Developmental Disabilities.
• Prisons remain one of the state's most durable growth industries. Even at that, the administration continues to be faced with overcrowding. Edgar is requesting $833 million to operate prisons, a 10.3 percent increase over the current year. The capital budget calls for an additional $65 million to build a new medium security prison and $400,000 to convert Adolf Meyer. The state already has 37,200 inmates, but the pressure is on to put more people behind bars for longer. "I don't really get excited about building prisons," says Edgar, who nevertheless would add 1,400 prison beds in the next fiscal year — not counting the planned medium security prison — and hire nearly 500 prison employees. The budget does not account for an expected increase in inmates should a so-called "truth in sentencing" proposal become law. That would require offenders to serve more time on their sentences.
• The Department of Public Aid faces spending cuts and staff reductions, and a mandate to come up with a replacement for the Aid to Families with Dependent Children program by 1999. This will be no mean feat, but if all goes as planned, the state's welfare department ultimately will have less to do. Edgar has asked for a $280 million cut in the department's budget. About $263 million of the reduction involves the transfer of responsibility for long-term care for the developmentally disabled. He would cut 250 employees. Here and in Washington Republicans are aiming to downsize government's role in providing welfare for low-income people. New provisions signed by the governor will limit eligibility and cap benefits for mothers who have additional children. While waiting for Washington to act on his plan to enroll welfare recipients in managed care, Edgar would chip at the $1.3 billion backlog in health care bills by knocking $100 million off the Medicaid debt. To tide the system over, he would extend the tax on health care facilities. The Illinois Hospital Association has already launched a full-court press against the plan. And the Republican-controlled legislature may in fact step in and find other ways to step up payments on back Medicaid bills. But then, that would lend credence to Edgar's complaint that much of his budget script is written for him by forces beyond his control. That's his story, anyway. 10/April 1995/Illinois Issues
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