Sunday 17th December 2017

State employee health insurance accounts for vast majority of Illinois’ 2017 deficit spending

State employee health insurance accounts for vast majority of Illinois’ 2017 deficit spending

FILE - Hospital in Illinois
Evanston Hospital in Evanston, Illinois

Photo courtesy of the NorthShore University HealthSystem

 

Gov. Bruce Rauner has a lot of power when it comes to spending tax dollars, and a state representative says the governor and the state’s largest public employee union are mostly to blame for deficit spending from the previous fiscal year.

The Rauner administration overspent $2.8 billion last fiscal year. That was disclosed just last month when the state had to show bond investors its poor finances.

Rauner said the deficit spending is a symptom of decades of bad financial practices.

“This is not new that we’re running a deficit,” Rauner said last week. “We’ve been running one for 35 years under Speaker [Michael] Madigan’s control. It’s the reason we have out-of-control debt, unfunded pension liabilities, unpaid bills.”

The vast majority of the deficit spending, according to the investor documents, was $1.6 billion on group health insurance benefits for state employees.

State Rep. David McSweeney, R-Barrington Hills, said Rauner is at fault for that, but so is the American Federation of State County and Municipal Employees Council 31.

“The AFSCME is certainly to blame,” McSweeney said. “They’ve been unreasonable, but the [Rauner] administration has been completely ineffective in dealing with that situation.”

The AFSCME union didn’t respond to messages seeking comment.

A years-long labor dispute between Rauner and AFSCME still hasn’t been settled and is likely to be decided by the state Supreme Court sometime next year.

Aside from the $1.6 billion in unappropriated group health insurance spending from the last fiscal year, the investor documents show nearly half a billion dollars was overspent at the Illinois Department of Corrections, $440 million was overspent for Healthcare and Family Services’ Healthcare Provider Relief Fund, $118 million in other human services, $40 million for Central Management Services, $27 million for Illinois State Police. All other agencies spent $73 million over their approved appropriations.

The investor document said the group health costs are expected to be addressed through the recent bond sale. It also said the general revenue fund transfer to Healthcare Provider Relief Fund was not included in the fiscal year 2017 appropriations and is needed to fund projected Medicaid liabilities.

The state’s bond offering said the $2.8 billion in total unappropriated spending can still be paid from future year appropriations.

“What’s so frustrating to me is [the General Assembly] put an income tax hike in and we’re still running a deficit,” Rauner said. “We solved none of our problems.”

McSweeney said Rauner has more authority to address the problem than he is letting on.

“Bruce Rauner has the authority not to spend all the money, but they’ve chosen … to spend money in the Democratic budget,” McSweeney said. “And that’s why we have a problem in this state … that spending is out of control and the governor has been completely ineffective in being able to articulate his views on pension reform and Medicaid reform and has not been able to be successful in saving money in those two areas.”

McSweeney said the General Assembly shares in some of the blame for the deficit spending, “but the [Rauner] administration certainly needs to be responsible for hiding the $2.8 billion in unpaid bills and not cutting spending because they’re spending up to full levels.”

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