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State

Ahead of budget address, Pritzker touts $225 million in efficiencies

Employee health care, paying down past-due bills cited as major savings

Gov. JB Pritzker, flanked by members of his administration, says during a news conference Friday in Chicago that his office has identified $225 million in budget savings for the upcoming fiscal year. Pritzker is scheduled to deliver his next budget address to the General Assembly on Wednesday, Feb. 19. (Credit: blueroomstream.com)
Gov. JB Pritzker, flanked by members of his administration, says during a news conference Friday in Chicago that his office has identified $225 million in budget savings for the upcoming fiscal year. Pritzker is scheduled to deliver his next budget address to the General Assembly on Wednesday, Feb. 19. (Credit: blueroomstream.com)

SPRINGFIELD – Democratic Gov. JB Pritzker said Friday his administration has already identified $225 million in budget savings for the upcoming fiscal year, and as much as $750 million through the end of his first term.

During a news conference in Chicago just days ahead of his annual budget address to the General Assembly, Pritzker tried to draw a sharp contrast between his administration and those of previous governors.

“In the past, irresponsible management of state revenue and a failure to invest in the long-term health of our state and its people put us in a challenging position,” he said.

The biggest share of the savings, according to Pritzker’s office, came from reduced health care costs for state employees, accounting for $175 million in the upcoming year, and an estimated $650 million over the next three years. Those are the result of new labor contracts the administration negotiated with various public employee labor unions.

“My predecessor treated them with scorn. He belittled their contributions, he aimed to undermine them at every turn,” Pritzker said, referring to former Republican Gov. Bruce Rauner. “What he neglected to understand was that when both parties come to the bargaining table in good faith, there's an opportunity for both sides to win.”

Under those contracts, employees who had gone four years without a pay raise will receive cost of living raises of about 11.5 percent over eight years. But they will also pick up a greater share of their own health care costs in the form of higher premiums and copays.

Other efficiencies Pritzker cited included paying down past-due medical bills, saving the state $15.7 million in late-payment interest costs during the current fiscal year and an estimated $25 million in the upcoming year.

He also cited “enhanced” tax collections at the Department of Revenue, generating as much as $15 million.

Pritzker said he also is exploring consolidating a number of state agencies, merging the Department of Labor and the Department of Employment Security into a single unit, combining anti-fraud units at the Workers’ Compensation Commission and the Department of Insurance, and merging the Coroner Training Board with the Department of Public Health.

After the news conference, however, representative of the Joint Employers – which is comprised of the Associated General Contractors of Illinois, Chicagoland Chamber of Commerce, Illinois Chamber of Commerce, Illinois Manufacturers’ Association, Illinois Retail Merchants Association and the National Federation of Independent Business – said the group is “disappointed with” the potential consolidation of the Department of Labor and IDES.

“Such a proposal suggests a lack of understanding of the need for IDES to act as a standalone agency and raises questions about what, if any, benefits would come from a merger,” the group said in a statement.

In highlighting those savings, Pritzker appeared to be laying the groundwork for his budget address, which is scheduled for noon Wednesday, Feb. 19.

Last year, lawmakers approved a $40 billion spending plan, the largest in state history. But the budget for the upcoming year, which begins July 1, is expected to be larger still due to mandatory increases in public school funding and pension contributions.

Under the Evidence Based Funding formula that lawmakers approved in 2017, state funding for public schools is supposed to increase by at least $350 million.

Meanwhile the state’s mandated pension costs, including the cost of paying down pension obligation bonds that were issued in 2003, are scheduled to increase nearly $460 million, to a total of $10.4 billion.

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