ILLINOIS NEWS NETWORK
Almost two full years into a budget impasse that has Illinois’ debt soaring and its bond rating plummeting, Gov. Bruce Rauner is calling on state lawmakers to approve his preferred budget plan during a 10-day special session that begins at noon Wednesday.
In a public address less than 24 hours before the extra session opens, Rauner said he would sign into law the plan introduced by House and Senate Republicans just last week that would require more than $5 billion in tax increases to pay for spending capped at $36 billion.
“Last week, we reviewed a compromise budget plan that I can sign – that we can all support,” Rauner said. “It moves us to middle ground on key issues. It is truly balanced. It funds schools, higher education, and human services. It provides a real path to property tax reduction.”
Rauner also said the Republican package contains the kind of spending cuts and reforms he wanted.
“The plan also stands tall for fundamentals. Spending reductions. Limits on expenses. Debt reduction. And term limits on legislative leaders and statewide officeholders, including the governor,” he said. “If we can agree to pass it, this plan will send a message across our state and around the nation that we are serious about making Illinois a more attractive destination for investment, new businesses, and new jobs.”
Getting the Republican measure passed through the Democrat-controlled General Assembly will be near impossible, given Democrats’ response. To pass a measure during the special session, a two-thirds majority is required. Democrats have comfortable majorities in both chambers.
State Rep. Greg Harris, in the officials Democratic response to Rauner’s address, called the impasse “Rauner’s budget crisis.”
“Democrats are returning to Springfield in hopes that the governor is finally ready to compromise on a budget,” Harris said, indicating his party wasn’t going to vote to approve the Republican plan as is. Harris also criticized Rauner for calling for unity on a budget deal at the same time he’s funding campaign ads targeting House Democrats.
Powerful House Speaker Michael Madigan also has moved to block Rauner’s initiatives at most every turn. And Senate President John Cullerton has said his chamber already did its job when it passed spending and tax increase packages last month with no Republican support.
The House adjourned without calling any of the Senate’s budget bills to the floor for a vote. Cullerton said it’s up to the House to take up the Senate’s already-approved legislation.
The Republican package revealed last week includes many elements of the Senate Democrats’ plan but with some changes.
For example, the Senate Democrat plan would permanently raise the state income tax by 32 percent, from 3.75 percent to 4.95 percent. Under the new GOP plan, the increase would expire after four years. The four-year expiration date would coincide with a four-year property tax freeze that also is in the GOP plan. The income tax hike also would not be retroactive to Jan. 1, as the Democrat plan is, but would go into effect beginning July 1.
A family with annual income of $60,000 would pay the state an additional $720 a year under the GOP income tax hike proposal, with their tax bills spiking from $2,250 to $2,970.
The property tax freeze includes an exemption on local governments with existing debt service payments as requested by Senate Democrats, but also would allow residents to lower or increase their taxes through voter referendum. Both plans also include an expansion of the state’s sales tax to certain services, and an increase in Illinois’ corporate tax on businesses.
The GOP’s new proposal includes a hard spending cap of $36 billion over the next four years. The spending plan passed by Senate Democrats after bipartisan grand bargain negotiations broke down last month looked to spend $37.3 billion in fiscal year 2018.
State Rep. Jeanne Ives, R-Wheaton, opposes the tax increases contained in both the Senate Democrats and the GOP plans.
“I think Illinoisans are actually ready for an austerity budget or what I would call a budget that spends only what we’re going to to take in,” Ives said. “I want a budget too. I only want to spend what we are projected to take in.”
Ives also said the reforms don’t go near far enough to improve the state’s economy and jobs climate.
“Not only do I not support the tax increase part of the compromise plan, I don’t support some of the reforms in what they call the compromise plan because they’re not significant enough to make the types of transformational changes we need in the state of Illinois,” she said. “We’ve had such little growth and this compromise plan does not bring back the business climate we need to grow the tax pie to be able to afford what people want.”
Illinois’ budget impasse will reach the two-year mark on June 30. Despite that, the state has been spending money at record deficit levels because of court orders and consent decrees. Illinois has a backlog of unpaid bills topping $15 billion and unfunded pension obligations of more than $130 billion. Credit ratings agencies threatened to downgrade Illinois’ bond rating to junk status without a budget deal.
Retired University of Illinois Springfield political professor Kent Redfield said he thinks the special session could go either way.
“This could all blow up, but you’ve got enough change in the dynamic that, at a minimum, the House Democrats are going to have to respond to what the governor has proposed,” Redfield said. “They may run something that is not acceptable to the governor, but we’re more into the dynamic that gets us to the end game.”
Sen. Melinda Bush, D-Grayslake, called Rauner’s address absurd.
“Governor Rauner has made it clear that he has no interest in unifying legislators and passing a balanced budget,” Bush said. “If he did, he would be talking to leaders and legislators from both parties instead of giving phony speeches and spending millions of dollars on political ads attacking the very people he claims to want to unify.”
The fiscal year ends June 30. Rauner said lawmakers need to act by then.
“Failure to act is not an option,” he said.