By Illinois Radio Network

SPRINGFIELD – Gov. Bruce Rauner renewed his call for economic and structural reforms Wednesday in the final budget address of his first term while also proposing that pension and health care costs be shifted to local governments.

In the midst of an expensive and contentious primary election season, Rauner said Illinois’ only chance at righting its fiscal ship is to enact the types of reforms he’s been pushing for since before he took office.

Speaking before a joint session of the General Assembly, Rauner said those reforms are reflected in what he called his balanced budget proposal for fiscal 2019.

“We must abandon Illinois’ fiscal status quo, and take steps to make tax-spenders more accountable to taxpayers,” Rauner said. “We must enact structural reforms that allow us to be as competitive as we need to be, so we can be as compassionate as we want to be.”

Rauner said the economies of the state’s Midwest neighbors are much stronger than Illinois’ because of poor policy decisions in the past, and that they are outpacing Illinois in jobs growth.

“Make no mistake, we are in a competition,” the governor said. “And the states around us are winning at our expense. They have out-legislated us, and now, they outgrow us.”

Rauner also called for reforms in the state’s pension systems and Medicaid program and new investments in education.

“Our reforms must begin with pensions and employee group health expenses,” Rauner said. “They now consume 25 cents of every dollar the state spends, and they grow faster than you can raise taxes and we can grow the economy.”

On pensions, Rauner is proposing a shift of the state’s costs to local governments over four years.

“Our budget proposal shifts costs closer to home, so people can question expenses and deal with them more directly,” he said. “Now, they have no incentive to manage costs because the state picks them up no matter what they are. When they are responsible for paying the bill, there will be plenty of incentive to lower costs. We will ask school districts to begin sharing the cost of their own pensions.”

Part of Rauner’s plan also reverses the allocation last year’s additional dollars to Chicago Public Schools when the General Assembly approved a new education funding reform formula. He said higher education institutions also will pick up their pension and health care costs under his plan.

And the governor said the state’s expensive health care plans will be right-sized to better reflect the kinds of plans workers in the private sector receive.

“State government needs to do what every employer in Illinois has done over the last 10 years: Get its health care costs under control,” he said. “Taxpayers shouldn’t have to pay for government health insurance policies that are richer than ones they can afford for themselves.”

Rauner proposes a four-percent cut to Medicaid expenses and said the state must move forward with selling the Thompson Center in Chicago.

Ultimately, meaningful reforms are needed for Illinois to balance its budget and improve its fiscal outlook, Rauner stressed.

“We need reforms, and we need to shift accountability so that we can put more resources into education, human services, public safety and infrastructure,” he said. “That’s where our FY19 budget is focused. That’s the outcome we want to produce.”

By enacting spending and structural reforms, Rauner said, the state “will be able to spend a record $8.3 billion on preK-12 education.”

After the speech, Democrats expressed concerns about some of Rauner’s proposed cuts and cost shifts.

“I appreciate the fact that it’s much closer to a truly balanced budget than we’ve seen from the governor in the past,” State Sen Heather Steans, D-Chicago, said. “I do worry about some of the cuts that are being proposed in there, to human services, to Medicaid.”

Steans also said Rauner didn’t present a plan to address the state’s backlog of unpaid bills, which stands at more than $8 billion.

“I thought we’d see a plan to bring that down to a more manageable level and I don’t think we heard that,” Steans said.

Sen. Dave Koehler, D-Peoria, sits on the Senate’s Education Committee. He said he was “stunned” to learn of Rauner’s pension cost-shift plan.

“I was quite stunned that we’re going to solve our problems just by shifting all our problems off to the local governments,” he said. “That’s not realistic.”

As lawmakers begin work on crafting a fiscal 2019 budget, Rauner faces a primary challenge from conservative Rep. Jeanne Ives of Wheaton.

Billionaire J.B Pritzker, liberal state Sen. Daniel Biss and Chris Kennedy lead a crowded field hoping to win the Democratic nomination.