Magic money? Rauner’s state savings
“Today, I laid out more than $1 billion in structural reforms,” Republican gubernatorial candidate Bruce Rauner boasted to his supporters via a blast email last week.
Rauner’s press conference to announce a billion dollars in alleged budget savings was an almost total farce.
Fully half of what Rauner said he could save – $500 million at the Department of Central Management Services – came with absolutely no details. Rauner did provide some annual totals for emergency and sole-source contracts, but he’d have to get rid of almost of all those, with all those government services they involve, to hit his goal. It’s a total sleight of hand with no actual basis in reality, but it gets him half way to his magic billion dollars, so it was included.
Another $250 million would come from implementing “Medicaid verification reform,” but those reforms are ongoing, although not to Rauner’s liking. The private company hired to root out ineligible Medicaid recipients started with the lowest of low hanging fruit. And even then, lots of people were restored to the Medicaid rolls after filling out the proper forms. So projecting a $250 million savings based on the initial work by that private contractor, before its actions were reversed, is a complete fantasy.
In other words, three quarters of Rauner’s billion dollars is either magic money or already in the pipeline.
Part of what Rauner did last week was what every candidate does. He highlighted some press clippings about Quinn administration screw-ups, which he claims totaled $140 million.
But almost half that amount – $60 million – was overtime costs for prison workers. Rauner wants to hire more guards, but that would actually add state costs for things like training, more full–time salaries and benefits. Should there be more prison guards? Sure. But don’t pretend that it’ll save money.
Yet another $40 million in “wasteful spending” cited by Rauner was actually an upgrade of the state’s probation system, which has been badly neglected for years. Another $12 million was what Rauner called “Medicaid payments to deceased individuals.” Rauner’s former investment firm owned a bunch of nursing homes and hospitals, so he ought to know that Medicaid doesn’t make direct payments to patients, alive or dead. And while this was most definitely a Quinn administration screw-up, the government has recovered most of the money that was sent to managed care providers, mainly hospitals.
So, out of $140 million in “waste” touted by Rauner, at least $112 million isn’t actually waste or has been or will be recovered.
Add the $500 million magic money savings from CMS, plus the highly doubtful $250 million savings in Medicaid plus the $112 million in “waste” that isn’t actually waste and he had $862 million in savings that aren’t really there – out of the billion dollars he said he had identified.
Oh, but there’s more.
I’ll even be charitable and give Rauner all of his savings on questionable capital projects. But these aren’t annual cash savings. The state takes out long-term loans for construction projects and Rauner pointed to some projects totaling about $11.5 million. Yes, many of those projects are goofy. No argument there. Spending an eyepopping $10 million to rehab a decrepit private theater in Chicago is a justifiable target for critics. But cutting out that project won’t save $10 million a year. It’ll save maybe a tenth of that.
And, heck, grant him his idea to move legislators to a 401(k) plan, which is probably unconstitutional, but he claims it will save $60 million – over 30 years. Annualize that out and it’s a $2 million annual savings.
I won’t even point out that Rauner counted some savings twice. OK, I did point it out, but I won’t put it in the final tally. He wants a 10 percent cut in constitutional offices and General Assembly spending, which he says will save $40 million. But he also wants to merge the offices of the comptroller and treasurer, which he says will save $12 million.
The bottom line is that out of a $36 billion or so state budget, Rauner successfully and accurately identified maybe $70 million in overspending per year – or less than 0.2 percent of the budget.
Hey, I’m not knocking $70 million. Every little bit helps. But when you advertise a billion dollars in savings and your provable savings add up to only about 7 percent of that, pardon me if I’m not exactly inspired.
“We need to stop the false choice of dangerous cuts to government services or higher taxes,” Rauner claimed last week.
What we need, Bruce, is a serious conversation.
Rich Miller also publishes Capitol Fax, a daily political newsletter, and CapitolFax.com.