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Quinn: Pension costs, tax loss pave $3.4 billion in cuts

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SPRINGFIELD-Maybe Gov. Pat Quinn's virtual pension python - 'Squeezy'
- was right all along.

In a newly released report, Quinn's budget office showed that rising
pension costs and the 2015 expiration of a temporary 2-percent income
tax hike translate to $3.4 billion in cuts to education, health care
and public safety between now and mid-2017.

"I think (the report) speaks for itself," said Abdon Pallasch, Quinn's
assistant budget director. "It's the first time you've
seen how deep the cuts really are."

By far, education and health care face the bleakest outlook from the
state's fiscal freefall. By the administration's estimate, state
spending on schools will drop $1.8 billion during the next three years
while health care spending will face $1.1 billion in cuts.

In that same three-year window, those big spending drops are joined by
nearly 13-percent less for human services; almost 36 percent less for
government services not including state pension or health costs; $268
million (18.7 percent) less to public safety; $24 million (30.8
percent) less to economic development; and $12 million (19.4 percent)
less to natural resources.

The grim assessment, laid out in a report released by the
administration late Friday, offers a likely glimpse of what next
year's budget may look like under Quinn. The governor is scheduled to
lay out his Fiscal 2014 budget plan to state lawmakers on March 6.

Despite a last-minute effort last week in the waning hours of the 97th
General Assembly, Quinn was not able to bring sides together on
reaching any agreement to reign in state pension benefits, instead
allowing the debate to spill into the new legislative session.

"If the economy picks up, that helps," Pallasch said. "Pension reform
helps, which is one of the main issues we're focusing on."

By 2016, without bridling in state pension costs, the report said the
state will pay $1.1 billion more to K-12 and university teachers'
pensions and $322 million more to state employees' pensions than it
will pay this year, increases of 27.7 percent and 28.1 percent,
respectively.

A spokesman for the union representing the largest bloc of state
employees said the new estimates demonstrate Springfield's urgent need
for more money.

"It shows that the state's real challenge is the loss of revenue with
a scheduled expiration of the income tax," Anders Lindall, a spokesman
for AFSCME Council 31, said Monday.

Lindall, side-stepping the organization's stance on extending the tax
hike, said AFSCME Council 31 still supports a proposal from the We Are
One Illinois coalition that he said will raise $2 billion per year
from closing corporate tax breaks and $350 million in higher employee
pension contributions.

"The only alternative from Gov. Quinn to the unacceptable cuts to
public services, is to welsh on pension promises made to retired
teachers, caregivers and other public employees," Lindall said.

Payments to the state's pension systems become harder with the state
expecting nearly $4 billion less in personal and corporate income tax
revenue over the next three years because of the phasing out of the
temporary income tax increase imposed in 2011.

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