SPRINGFIELD, Ill. (AP) — In what he called "a rendezvous with reality," Gov. Pat Quinn made clear Wednesday that he fears Illinois is on the verge of a financial meltdown because of pension systems eating up every new dollar and health care costs climbing through the roof.
What he didn't make clear was how to fix the problems.
In his annual budget speech, Quinn spelled out which prisons and mental institutions he thinks the state must close. He mentioned specific tax credits that would help families and veterans. He listed 34 communities that could benefit from state-funded school construction.
But Quinn chose not to offer specific proposals for cutting $2.7 billion out of the state Medicaid program or for overhauling pension benefits and costs. Instead, he pledged to work with lawmakers and repeatedly promised that "everything is on the table." Special working groups are negotiating possible solutions, he said.
"The truth is that over the past 35 years, too many governors and members of the General Assembly have clung to budget fantasies rather than confronting hard realities, especially with respect to pension and Medicaid investments," Quinn told a joint session of the Illinois House and Senate. "Today our rendezvous with reality has arrived."
His decision not to present his own plans won support from many observers, including some who aren't automatically Quinn supporters. They said it reduces the risk of confrontation by positioning the governor as someone who wants to work with legislators instead of tell them what to do.
It also may put pressure on legislators to take the lead on some unpleasant decisions instead of sitting back and letting Quinn walk through the political minefield alone.
"I wasn't disappointed that he didn't go into more detail," said Douglas Whitley, president of the Illinois Chamber of Commerce. "The real question is whether he has a partner in the General Assembly or whether they'll ignore him again as they did last year."
And state Treasurer Dan Rutherford, a Republican, said he was impressed by Quinn's tenacity in demanding action this spring on long-festering problems.
"I'm calming down some of the political rhetoric. I'm willing to work with this guy," Rutherford said.
Others were more critical.
"We need to know what direction he's headed. That's the role of the governor is — to provide some leadership — and that's what's been lacking," said the top Republican in the Senate, Minority Leader Christine Radogno of Lemont. "He's relying entirely on these pension and Medicaid working groups."
Lawmakers were virtually silent throughout Quinn's speech, which lasted less than 30 minutes. They did not interrupt with applause even when he delivered a bit of good news, such as proposing a small increase in education funding or adding staff at homes for aging military veterans.
Most of the speech was devoted to bad news, like the retirement systems for state employees, university staff and teachers outside Chicago. The systems are about $83 billion short of the money they'll eventually need to pay out, thanks in large part to the state's past failures to contribute its full share of costs.
Now, to make up for that, state contributions are growing dramatically, eating up scarce state dollars. Pensions take up 15 percent of the state's general funds now, up from 6 percent just five years ago, Quinn said.
Quinn said the steadily climbing payments could be reduced through some mix of raising retirement ages, making schools contribute more money, demanding bigger payments from workers and more.
"We must repair this broken system and we must do it now," he said.
Similarly, he said Medicaid, which provides care for 2.7 million people in Illinois, "is on the brink of collapse." The state routinely fails to set aside enough money for services, delaying payments for services and digging a deeper hole, he said.
Quinn called for cutting Medicaid spending by $2.7 billion next year, saying it could be done by cutting payments to doctors and hospitals, halting some services and restricting eligibility for the program. He set a deadline of April 17 for the Medicaid working group to submit a plan.
"Don't plan on going home for the summer until we are done," he cautioned legislators.
House Speaker Michael Madigan, D-Chicago, said the governor's message was clear and concise.
"He topped it off by saying, don't expect to go home until we get our job done, which is a legitimate request for the governor to the legislature," Madigan said.
The facilities Quinn wants to close include the supermax prison in Tamms, a maximum security prison for women in Dwight and six halfway houses for inmates nearing release, aides said. Quinn will also call for closing two juvenile prisons, four mental institutions and various smaller facilities.
Illinois prisons are already overcrowded. In November, 48,620 people were squeezed into space designed for 33,700. Closing facilities would further complicate the situation. The two prisons and six "adult transition centers" on Quinn's list house 2,648 inmates.
All this comes after years of belt-tightening and a 67 percent increase in state income taxes. Despite those moves, the state's expenses continue to overwhelm revenues.
Quinn's proposal calls for spending almost $33.8 billion on the majority of state services, up just a fraction of 1 percent from current levels. Add in the federal money that flows through Illinois government and the total state budget is approximately $61 billion.
One area where Quinn wants to increase spending is education. His budget proposes a $90 million increase, or about 1 percent, to help early childhood programs and college scholarships.
Quinn said he wants to close tax loopholes that benefit businesses but don't help the state economy. That money could be used to pay for new tax breaks he wants to give to families with children and businesses that hire veterans, he said. It could also free up money to chip away at the state's roughly $8 billion backlog of unpaid bills.
The governor did not say which tax loopholes should be closed, leaving that to be worked out later.
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Associated Press writers John O'Connor, Sophia Tareen and Shannon McFarland contributed to this report.
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Follow Christopher Wills on Twitter at http://twitter.com/chrisbwills.
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