‘Overspending’ to blame for state’s financial crisis says Madiganon January 26th, 2012 at 8:00 am
In a rare public speech, House Speaker Michael Madigan on Tuesday blamed both Democrats and Republicans for spending Illinois into its current fiscal crisis, but said the budget passed last year with bipartisan support in the House was a good start in restoring the state’s economic health.
“Bear with us,” he said when asked about the state’s inability to pay its bills to social service agencies.
Madigan, chairman of the state Democratic Party and House speaker since 1983, joined a prior adversary — former Republican House Speaker Lee Daniels who ousted Madigan for a two-year term in 1995 — for a governmental forum at Elmhurst College.
In front of more than 500 invited guests in one of the state’s most Republican-leaning counties, Madigan acknowledged the state’s fiscal woes – it owes more than $4 billion in unpaid bills and carries an unfunded pension liability of about $85 billion – were the result of overspending.
“We’ve got huge budget problems in this state. Why? Well, there was overspending in the past and many people engaged in the overspending. It wasn’t just one or two people,” he said.
Madigan blamed the shortfalls in part on Republicans, even though Democrats have held majorities in the House and Senate and controlled the governor’s mansion since 2002. Most budget votes, including budgets that delayed or skipped pension payments, have been carried with Democratic support.
Asked whether he should bear greater blame, having served in Illinois government in an influential position for nearly 30 years, Madigan said it took more than “one person” to drive Illinois into a pattern of spending beyond its means.
In flusher times, party leaders and the governor cut pork-heavy budget deals behind closed doors. To bring lawmakers on board—often at midnight on the final day of their legislative session— the budget included hundreds of their demands, from road improvements to new fire engines and playgrounds. Madigan said that spending, from both sides of the aisle, contributed to the financially-strapped position the state is in today.
He lauded the budget process in last year’s legislative session, during which House members from both parties helped pass a budget that allocated $2 billion less than what Gov. Pat Quinn requested.
“A good start was the current balanced budget,” Madigan told the crowd. “The next good step would be to do that again under even more difficult circumstances. If we can convince the budget-makers to live within our means, we would be taking some significant steps to fiscal solvency, but it’s not going to be done overnight.”
Moody’s Investors Service downgraded Illinois’ credit rating earlier this month to the lowest in the nation, citing state leaders’ inability “to implement lasting solutions to its severe pension underfunding or to its chronic bill payment delays.”
Madigan said the recession has caused a 25 percent drop in sales and income tax receipts, and a tax increase in January 2011 didn’t solve the problem. The personal income tax rose then from 3 percent to 5 percent and the corporate income tax climbed from 4.8 percent to 7 percent.
“We have debt to our pension systems. We have requirements to retire debt taken on by the state. We have bills that haven’t been paid, so it’s a real struggle,” he said. “There’s a limit to how much you want to cut.”
The state supports Medicaid for hospitals, pharmacies and nursing homes. It invests in education at all levels and bears the cost of mental health services and programs for the developmentally disabled. “Easy to say ‘cut,’ [but] you take out the knife and start reading through what you’re about to do, and it’s not so easy,” Madigan said.
He suggested school districts pay more toward teachers’ pensions, an idea also raised by Senate President John Cullerton (D-Chicago) and Quinn. The state has fallen short on its required payments to the pension systems for years.
“I never found anybody who could tell me why the state of Illinois stepped up one day and said, ‘OK school districts, we’ll just pick up all your pension costs,’” Madigan said.
Madigan and Daniels spoke warmly of one another, a drastic shift from 1995, when Daniels wrested the House majority from Madigan and served as speaker for two years.
Daniels, who retired from the House in 2007 and resigned as chairman of the Illinois Republican Party, is now an adjunct faculty member and special assistant to the president at Elmhurst College. He described Madigan as “without a doubt the most powerful and successful Illinois politician of our time.” Madigan, in turn, said Daniels would make “a good governor.”
Asked about his famously frosty relationship with the current governor, Madigan said it has improved.
“We’ve been able to work through our problems and differences, and we have plenty of difference among Democrats,” Madigan said. “It’s better than it was, I’ll tell you that.”
Kristen McQueary covers state government for the Chicago News Cooperative and WBEZ.