It’s tough being a governor these days. There’s no question about that.
Nationwide, states are facing their worst fiscal crises in more than 50 years. And some say Illinois is facing its worst ever. That’s a bit of political hyperbole, perhaps, but not far off the mark. Times are grim.
Going into his first state budget, Gov. Rod Blagojevich is staring down a $1.2 billion hole. His estimate. By the end of the budget year that begins this summer, he’ll have to fill another $3.6 billion hole. Again, his estimate.
But if that isn’t challenge enough, the new governor is about to learn that all roads lead, inevitably, to the Statehouse. The feds are sending more policy mandates out of Washington, D.C. And local officials are calling on Springfield to send more help. In short, Illinois’ new administration is about to get squeezed from both sides. And providing services to this state’s citizens could get even more expensive.
Illinois Issues details this month the policy and financial pressures on the state from federal and local officials.
The costs of new federal policy initiatives, for instance, have yet to be tabulated. So the states have a number of concerns about President George W. Bush’s federal budget plan for fiscal year 2004, which begins next fall. Medicaid, reports Aaron Chambers, tops the list.
If the president has his way, Chambers writes, the burden of keeping booming Medicaid costs under control will be on the states. And here in Illinois, as elsewhere, that program, which funds health care for low-income citizens, constitutes one of the greatest pressures on a governor’s budget.
In fact, Illinois’ program has grown by about 8 percent each year over the past decade. The rising cost of prescription drugs is largely responsible for driving those increases. Illinois serves about 1.6 million Medicaid recipients; not counting administration, the program cost about $4.7 billion in state dollars in the fiscal year that ended last June.
Under the current formula, the federal government reimburses Illinois 50 cents for every dollar it spends. But under the Bush plan — if the state signs on — the feds would allot a set sum each year and Illinois would have to cover any additional program spending.
The Bush Administration, which argues the plan encourages careful oversight, is offering incentives to sign on. States that opt in will get an extra $12.7 billion over the first seven years of the 10-year program. Beyond that, they’ll need to find ways to keep expenses in check.
“State officials in Illinois and elsewhere,” Chambers writes, “are loath to predict to what extent Medicaid spending will grow over the next decade.”
There are uncertainties in the proposed federal plan, too.
A state’s allotment would be increased each year under an inflationary rate. But that rate has yet to be determined.
While Blagojevich doesn’t support the president’s Medicaid plan, he hasn’t said whether Illinois will opt in or out. But, his budget proposal for this next fiscal year is expected to assume the current Medicaid formula will remain in place.
Still, while the fiscal risks for states in signing on may be high in the long-run, governors may need those spending bonuses in the short term. And the White House may be counting on that.
The White House also may be counting on a political bonus in its education initiative: the program dubbed with the catchy phrase, “No Child Left Behind.”
Maureen Foertsch McKinney assesses this and other education reform proposals in her essay. “Politicians want to claim to be catalysts for change,” she writes. “But change driven by ambition may not help children if policy-makers put no resources behind the big ideas.”
A couple of things are clear about this latest initiative. Bush has managed to greatly expand the role of the federal government in public schools. And he has managed to increase costs for the states over the long haul.
No Child Left Behind requires annual performance evaluations and gives parents the chance to opt out of schools that don’t perform. Under this new federal law, states are required to test every student in grades three through eight, double the number of annual standardized tests that have been required by Illinois.
No Child Left Behind, McKinney concludes, has a grand vision and does seem to be aimed at giving every child a good education. “That philosophy is a step in the right direction.”
But the task is daunting for Illinois at a time when its schools are in fiscal crisis.
Indeed, local districts are increasingly looking to the state for help in avoiding deficit spending or outright bankruptcy. Bethany Warner reports that at least 74 percent, or 657 of Illinois’ 892 school districts, spend more than they take in, and the state education board expects that figure to grow to 80 percent or more by the end of this school year.
Those districts are unlikely to get relief from local property taxpayers. Getting it from the state is unlikely, too.
While he has promised not to cut spending for elementary and secondary schools, Blagojevich is likely to have few dollars to spare for bailouts. And because he has promised not to increase state income or sales taxes, he won’t have the funds that would be required to increase the state’s share of total school spending.
The governor will get the chance to tell us how he intends to weigh these competing and worthy interests when he announces his first budget. He won’t have it easy.
It’s tough being a governor these days. The Statehouse is where federal and local policy meet, and where leadership can make the greatest difference in Illinoisans’ lives, for better or worse.
Peggy Boyer Long can be reached at Peggyboy@aol.com.
Illinois Issues, April 2003
