State Government

Illinois budget may be pushed back after March primary, local lawmakers warn

It may not be until after the March primary election that state lawmakers approve a 2016 budget, McHenry County lawmakers warned.

They find the idea even more abhorrent than the fact the state has gone almost seven months without a budget, and they pledged to help push for getting a deal done as soon as possible once lawmakers reconvene Jan. 13 for the spring legislative session.

To Democratic Rep. Jack Franks and Republican Rep. Mike Tryon, it’s election-year politics over people, and who can blame whom. The state fiscal year started July 1.

“The governor will be giving his budget address for the next fiscal year, and we don’t even have a budget for this fiscal year. That’s how messed up this is. We are the ultimate freak show,” said Franks, D-Marengo.

Republican Gov. Bruce Rauner and legislative Democrats who control the House and Senate have been at loggerheads since lawmakers in May approved a deficit budget that spent $4 billion more than the $33 billion the state was expected to collect. Rauner vetoed it, citing the long-ignored balanced budget provision in the state constitution, but approved the portion funding public schools.

Rauner, who was elected last year on a platform of revitalizing Illinois and fixing its deep budget woes, wants to link Democratic calls for higher taxes to reforms such as a two-year freeze on property taxes, easing workers’ compensation laws, and constitutional amendments imposing term limits and changing how Illinois draws its legislative boundaries. He has, for now, taken reforms that Democrats find particularly objectionable – namely targeting the power of labor unions through right-to-work legislation – off the table.

Even though the state has no budget, it still is paying about 90 percent of its bills, including state employee salaries, because of court orders and consent decrees. The rulings are further increasing the deficit – which could reach $8 billion – because funding is staying at last fiscal year’s levels despite a temporary and unpopular four-year income tax increase that was allowed to substantially expire on Jan. 1.

But groups such as the state’s long-suffering social service agencies and its public universities are not getting paid by the state, and their plights are worsening. Illinois’ pile of unpaid bills, which has been a problem for years, totaled $7.6 billion as of mid-December, according to the state comptroller’s office.

“The universities are basically living off of cash reserves and tuition increases,” said Tryon, R-Crystal Lake.

Illinois has the worst credit rating of all 50 states, and at least $111 billion in unfunded public worker pension liability. Fixing that liability is now a much bigger problem, given that the Illinois Supreme Court struck down a 2013 reform that attempted a fix, and ruled that the state constitution’s pension protection clause guarantees earned benefits.

However, any solution that would include a tax hike – Democratic House Speaker Mike Madigan said earlier this month that income taxes should again be increased – could prove politically damaging to candidates who vote for one prior to the March 15 primary election, hence talk of a delay. It would not be without precedent – lawmakers in 2011 passed the four-year income-tax increase in the lame-duck session after the 2010 election.

State Rep. David McSweeney, R-Barrington Hills, called talk of an April budget vote a “disgrace” and said that every day which goes by without a budget causes more damage that taxpayers will be on the hook to fix.

“Conventional wisdom is that we won’t have anything until after the primary. I won’t accept that. I won’t even think about that as a possibility. That means more destroyed social service agencies, more [credit] downgrades, and more screaming for a tax increase,” McSweeney said.

The temporary tax increase that Madigan and others would like to see restored – 67 percent on individuals and 46 percent on businesses – was billed by Democratic lawmakers as a way to balance the state budget and pay down its unpaid bills. It did not – more than 90 percent of the increased revenue was swallowed by the state’s ballooning public pension liabilities, which now consume more than 20 percent of the general fund budget.

Not all of the county’s lawmakers believe that a budget fix will be delayed until after the primary. State Rep. Barbara Wheeler, R-Crystal Lake, said both sides know what the other side wants, and that it’s only a matter of reaching some sort of agreement. She said she is optimistic that leaders by February will have decided on needed cuts and reforms in exchange for added revenue.

“Unfortunately, I think that’s just the reality of the situation. We can’t cut ourselves out of $5 billion,” Wheeler said.

The number of votes needed to approve legislation that takes effect immediately, such as a past-due budget, drops back to a simple majority on Jan. 1, and Democrats control House and Senate supermajorities. But the House supermajority – the exact 71 votes needed – is a paper one, given that some Democratic members like Franks will not vote for tax increases. Even though the Democratic members can approve a budget without a single Republican vote, overriding a Rauner veto becomes problematic.

Franks said the state is on a fast road to ruin unless a budget agreement comes, and quickly.

“Both sides, meaning Madigan and Rauner, suffer under the delusion that it’s OK for real people to suffer if the other side can be blamed for it,” he said. “These are real people. A pox on both of their houses. I’m disgusted with both.”

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