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FOR IMMEDIATE RELEASE
May 2, 2012

Governor Quinn to Illinois Business Leaders: Get Involved to Stabilize Medicaid & Pension Systems

SPRINGFIELD – May 2, 2012. In his keynote address at the Illinois Retail Merchants Association’s annual business day, Governor Pat Quinn called on Illinois business leaders to push for solutions that rescue Illinois’ Medicaid and public pension systems this legislative session. The 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. Uncertainty caused by inaction on these two critical issues makes it more difficult for businesses and the state to plan for long-term needs and growth.

“The best thing we can do for businesses right now in Illinois is restore fiscal stability to our state,” Governor Quinn said. “I urge you 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.”

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.

This week Moody's Investors Service commended Governor Pat Quinn for his proposed pension changes calling them a "credit positive." The Civic Federation also endorsed the Governor's pension plan as well as his call to reduce Medicaid spending, saying these proposals “would put Illinois finances on the road to recovery.”

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. Governor Quinn warned business leaders in attendance today that unless state lawmakers address pensions and Medicaid this spring, the consequences of inaction will hurt the state’s economic recovery and ability to provide basic services.

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. Stabilizing these systems is also necessary 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.

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.



RAW TAPEGovernor Pat Quinn speaks at the Illinois Retail Merchants Association's annual business day.


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