“The most difficult budget Illinois has ever faced,” according to Gov. Pat Quinn, is likely “dead on arrival in the House,” according to a local state representative.
McHenry County’s representatives in the General Assembly, as in previous years, did not have a high opinion of the $35.6 billion budget proposal for 2014 that Quinn unveiled Wednesday afternoon.
But the fatal flaw, according to state Rep. Mike Tryon, is that Quinn estimates he will have $500 million more in revenue to spend than the House does.
And the House, Tryon said, will not budge on spending more than its projection of $35.08 billion, which it set the day before Quinn’s speech.
“You have $35 billion in revenue. That’s all you get. There is no more money. No matter what is proposed, the state is going backward because the tough decisions on spending, they won’t make,” Tryon said.
Reps. Jack Franks, D-Marengo, and David McSweeney, R-Barrington Hills, shared Tryon’s opinion. The House for the previous two Quinn budgets also went with their more conservative revenue estimates. The state fiscal year starts July 1.
“I don’t think [Quinn’s] budget was taken seriously today. He gave us some ideas, but he talked about spending more money than we actually have,” Franks said. “People will listen to his opinion, but by no means will it be followed as he wished, because frankly, we can’t.”
Quinn’s budget yet again enacts cuts to education and other programs, which he squarely blamed in his budget address on lawmakers’ inability to reform the state’s ailing public pension systems. The state is grappling with $96 billion in unfunded pension liability, which grows by an estimated $17 million a day, and a stack of unpaid bills reaching $10 billion.
Almost 20 percent of next year’s General Fund revenues will go toward paying pensions.
“Skyrocketing pension obligations leave our state with no choice but to continue reductions to our core priorities. There are significant reductions in this budget that I do not want to make, and that none of you will want to make, either. These reductions are the direct result of the General Assembly’s lack of action on public pension reform,” Quinn said.
The state will pay $6 billion to meet its pension obligations, as well as $1 billion to pay back past borrowing to meet them.
McSweeney said he does not believe that Quinn went nearly far enough in cutting spending, but said he liked that Quinn put much more attention on the pension problem than he did in his State of the State address last month.
“I think the governor doesn’t focus enough on cutting spending, and I think his finances are too optimistic, but I applaud him for pushing pension reform. I wish, however, that he would show more leadership in pursuing it,” McSweeney said.
The House is scheduled today to take up more proposed amendments to a bill addressing the pension issue. Four amendments proposed last week by House Speaker Mike Madigan only received a handful of Democratic votes – the Republicans called the whole thing political theater and refused to vote.
“We cannot continue down this path of unaffordable pensions while Democrats play political games with reform,” Rep. Barbara Wheeler, R-Crystal Lake, said in her response to Quinn’s budget. “Our unfunded pension liability is growing every day, we have nearly $10 billion in unpaid bills, and the tax increase is about to expire. We need to take serious action on pensions before Illinois tumbles over its own fiscal cliff.”
In his budget address, Quinn proposed closing corporate tax loopholes – he cited three that he said could bring in $455 million – as a way to pay down the backlog of bills.
He started off his address by touting that state government under his watch has “reduced spending to historic lows,” citing the closings of 54 state facilities and reductions in discretionary spending.
But state Sen. Pam Althoff, R-McHenry, said she was not impressed, given the state’s deep fiscal problems.
“We had a 67 percent [income] tax increase, we are receiving record amounts of new revenue, and our backlog of bills has increased by 20 percent. Where are all these savings that he was touting today? Where is it going?” Althoff said.
The record 2011 income tax increase passed by Democrats – 67 percent on individuals and 46 percent on businesses – was sold as a way to pay down the state’s overdue bills. However, almost all of the new tax revenue has been swallowed by the state’s pension obligations.
The tax increase is supposed to start phasing out in 2015. At least one bill before lawmakers seeks to make it permanent.