DCEO Acting Director David Vaught Asks Business Leaders to Get Involved to Stabilize Medicaid & Pension Systems
MURPHYSBORO – Illinois Department of Commerce and Economic Opportunity (DCEO) Acting Director David Vaught met with business leaders and local government officials in southern Illinois today to push for solutions that stabilize and strengthen Illinois’ Medicaid and public pension systems this legislative session. During the discussion at the Southern Illinois Airport in Murphysboro, Vaught emphasized that these two fast-growing areas of state spending are on unsustainable paths, jeopardizing their existence, those who depend on them, and the state’s ability to fund core services like education and public safety. Inaction on these two critical issues creates an uncertainty for businesses assessing their long-term future and suppresses economic growth.
“We must work together to get our fiscal house in order and that means acting now to stabilize the Medicaid and pension systems,” Acting Director David Vaught said. “Failing to stabilize the pension systems and Medicaid program is not an option, the consequences of inaction will be harmful to the state’s economic recovery and ability to properly fund education and make the capital improvements needed to set the foundation for efficiency and business investment.”
Acting Director Vaught told business leaders in attendance that unless state lawmakers address these issues this spring, less funding will be available for the state’s top priorities like education, economic development and capital investments. He discussed the importance of stabilizing these systems to ensure the continuation of the Illinois Jobs Now! capital construction plan, which has benefited businesses across the state through modern infrastructure that increases efficiency and keeps them competitive. Ratings agencies have repeatedly cited continued inaction on Medicaid and pension reform as potential reasons to downgrade Illinois’ bond rating, which could effectively halt critical capital improvements and road safety projects.
“The best thing we can do for businesses right now in Illinois is restore fiscal stability to our state,” Governor Quinn said. “I urge business leaders throughout the state to advocate for solutions on pensions and Medicaid like never before and make sure your voice is heard these next few weeks by the members of the General Assembly.”
Later today, Acting Director Vaught will also meet with business leaders in central Illinois with stops in Peoria and Champaign to continue Governor Quinn’s efforts to stabilize the Medicaid and pension systems.
Governor Quinn recently proposed a plan to fundamentally restructure the Medicaid system and save it from collapse by creating $2.7 billion in savings. The governor’s Medicaid plan cuts waste, fraud and abuse, and raises the price of cigarettes to bring back dollar for dollar federal matching funds and help make people healthier. The governor also recently proposed a bold plan to stabilize the pension system, which is expected to save taxpayers $65 to $85 billion, eliminate the unfunded liability and allow public employees who have faithfully contributed to the system to continue to receive pension benefits.
“We are proud that Central and Southern Illinois is doing its share and more to turn things around in Illinois. It's even better to see the coal industry taking the lead, producing hundreds of new jobs and billions of dollars in private investment in new mines and power plants like Prairie State in Washington County. We support Governor Quinn’s efforts at reforming pensions and Medicaid,” said Phil Gonet, President, Illinois Coal Association.
Together, Medicaid and pensions now account for 39% of state general revenue spending, putting a tremendous squeeze on the rest of the budget. Illinois is expected to end this fiscal year with almost $2 billion in unpaid Medicaid bills, caused in part by rising medical costs, increased enrollment during the Great Recession and a deferral of $1.9 billion in last year’s bills to this fiscal year. Without immediate and fundamental restructuring of the Medicaid system, the non-partisan Civic Federation projects that Illinois’ unpaid bills will rise to $21 billion by 2017. According to the PEW Center for the States, Illinois’ unfunded pension liability is the worst in the nation.
For more information about Governor Quinn’s reform proposals that will save Illinois’ Medicaid and pension systems to make them sustainable, while restoring stability to the state budget, please visit his announcements for Medicaid and pension reform.