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.
CURRENT ISSUE
