Gubernatorial Candidates Look for Billion Dollar Pony

Via Rich who is always the best way to get back to blogging, the Republican candidates were asked to come up with $1 Billion in spending cuts.  Results are not promising:

Asked where each would make specific cuts to trim more than $1 billion from the state’s multi-billion dollar deficit, Dillard, Brady and Schillerstrom each said they would first look at Medicaid, the state subsidized health-care plan for the poor. Proft said he would target funds to create high-speed rail between Chicago and St. Louis and the proposed third metropolitan airport near Peotone. Andrzejewski said he would look at the current share of state income taxes that go to local municipalities—an immensely difficult political move.

Dillard, Brady and Schillerstrom also said they backed tax breaks and other incentives to attract business, but Andrzejewski and Proft belittled them as not doing enough to help make Illinois’ business climate more attractive.

Let’s start with the admittedly most specific and thus at least a little courageous attempt by Proft.  High speed rail and Peotone funds are small and most are not recurring.  High speed rail funds by the state are included in the capital bill at $400 million which is significant, but essentially a one time outlay and not part of the operating budget.  Peotone land acquisition is around $150 million I believe and again, is not a part of any operating budget.  It’s all one time funds.  That does not impact the operating budget deficit in a significant way.

That’s not to pick on Dan because he was specific. Saying you are going to cut $1 Billion (10% of the budget deficit) from Medicaid is quite a claim as well. The two large areas of spending on Medicaid are acute care and long term care.  The mental health facilities are pretty much off the table in creating big cuts in long term care. The money just isn’t there.

The next big category is nursing facility care which is largely for elderly people without their own means to support nursing home care which comes in around $1.3 Billion/year and Home care at about $1 billion.  You might be able to chop some of the nursing home care by moving more people to home care, but given the long term need for better pay for such jobs, the savings are somewhat limited.

Nearly $9.3 billion in acute care is the biggest amount of Medicaid spending. The long term solution is reducing health care costs and a universal health care plan for the country.  Otherwise, Medicaid will end up picking up more and more costs for the uninsured just as other insurance does.

Just under half is spent on hospitalization, about one quarter on outpatient, and about 13% on other services.  Can you pull $1 billion out of this?  Sure, you can insure fewer people or you can reduce reimbursements so that fewer providers will take Medicaid patients (remember there is already an incredibly long wait on getting paid by the state Medicaid program).  Long term, universal care and movement towards more prevention and thus more outpatient services could save significant money, but short term not much will change.

So pretty much no one offered much of an idea in how to reduce 1/10 of the Illinois budget deficit.