CHICAGO (CBS) — A conservative lobbying group has outlined a plan for ending the state’s budget standoff without a major income tax increase.

The Illinois Policy Institute’s budget plan would move all new employees and as many current workers as it can persuade into a 401(k)-style retirement plan, instead of defined pensions.

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The proposal also would make most able-bodied people without children ineligible for Medicaid, impose the state’s most recent contract offer to unionized state workers, reduce state payroll by 10 percent, and freeze property taxes for five years.

Illinois Policy Institute CEO John Tillman said it also would end state revenue sharing with larger local governments, which he claimed spend more money than they should.

“We want to end that charade. We want to create local accountability. If a local school district wants to engage in pension spiking at the end of a teacher’s career, they can do that. If they want to give administrators excessive compensation packages, they can do that. But they won’t be able to send the bill to other taxpayers anymore,” he said.

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Tillman said state mandates on local government would be reduced, but he acknowledged there would be skepticism and resistance to much of the IPI budget plan.

“Every single political actor at the local level will want to hold on to every penny they can, and it won’t be until the public demands these reforms that we really see the political will,” he said.

State Rep. Jeanne Ives (R-Wheaton) said she thinks the public will press for approval of the IPI budget plan.

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“That four-person family where the dad’s working his tail off, and maybe has a second job, and they know that they’re funding the Medicare for an able-bodied single adult who doesn’t want to get a job; I’ll tell you what, they’re all in on this plan, sir. All in,” she said.