Ill. faces painful choices as Quinn readies budget proposal
SPRINGFIELD – Gov. Pat Quinn plans to propose a budget that would keep Illinois government afloat mostly by borrowing money and letting bills go unpaid, his top aides said Tuesday, while also hinting that he might discuss raising taxes as an alternative.
Letting bills pile up could be disastrous for those who need help with child care, job training, services to the elderly, drug counseling and more. The local organizations the state hires to provide those services, which are already struggling to survive, could go under if they don’t get paid.
“It’s a question of whether the creditors that we owe money to can actually stay in business or whether they’ll collapse,” said Quinn budget director David Vaught.
The Democratic governor has long embraced an income tax increase as the key to closing the biggest budget deficit in Illinois history — $13 billion or more.
But the budget proposal that the administration described Tuesday night for legislators and reporters does not include a tax increase. Instead, it addresses the deficit by cutting expenses by $2 billion, borrowing $4.7 billion to pay old bills and letting about $6 billion in new bills pile up for another year.
Quinn’s aides did not outright call this budget proposal a doomsday scenario meant to pressure legislators into supporting a tax increase, but they did say repeatedly that Quinn has not had a change of heart.
Wednesday’s speech will address state revenues, they said.
“He’s not included a tax increase in this budget and that’s a conversation that has to happen,” said his chief of staff, Jerome Stermer.
Sen. Matt Murphy said Quinn must tell lawmakers how he prefers to handle the budget and not simply leave it for the Legislature to decide. “To punt from day one is a total failure of leadership,” said Murphy, R-Palatine.
Ralph Martire, executive director of the Chicago-based Center for Tax and Budget Accountability, said it would be irresponsible for Quinn not to propose a tax increase. The state’s budget problems are too big to fix any other way, he said, adding that Quinn may be challenging lawmakers who oppose higher taxes.
“I think that what you see the governor doing is calling the bluff of those who say you can do this without a tax increase,” Martire said.
Most of the savings in Quinn’s proposal would come from cutting education spending by $1.3 billion, or roughly 10 percent. State employees would have to take unpaiddays off, saving $200 million. Prescription drug benefits for the elderly would be cut in half, saving $70 million.
Quinn proposed a $2,500 tax credit for each new job created by small businesses. He said it would create 20,000 jobs.
Lawmakers last year rejected Quinn’s proposal to raise income taxes. Now, in an election year, lawmakers aren’t any more eager to consider the idea.
They could pass a temporary budget and postpone any politically touchy decisions until after the November election. At that point, legislators will be safe from voter backlash and either Quinn will have won a full term or been beaten by Republican Sen. Bill Brady, who opposes any increase.
“I’m really curious about what the next governor thinks we should do,” said Senate President John Cullerton, D-Chicago.
With revenues falling and expenses climbing, Illinois government has a huge hole in its budget. Experts predict the deficit will top $13 billion in the upcoming fiscal year. That’s nearly half the entire discretionary-spending portion of the state budget.
The state faced a similar, though smaller, deficit a year ago. Quinn proposed closing the deficit with a mixture of higher taxes, lower spending and temporary budget maneuvers.
Legislators, however, balked at raising taxes or making deep cuts. They passed a budget that cut some spending but relied mostly on borrowing money and delaying bill payments to keep the state operating for another year.
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Associated Press Writer Deanna Bellandi contributed to this report.
