Illinois budget finale preview: $13 billion deficit still there

Wednesday, May 5, 2010

SPRINGFIELD — They may well adjourn Friday or Saturday, but Illinois legislators are not likely to deal with the state’s $13 billion deficit before they go home to campaign for re-election.
Instead, it looks as if they’ll pass a budget that maintains as much of the status quo as possible and leaves the ever-growing deficit for the next session of the General Assembly to deal with — in January 2011.
“We’re going to try to fashion a spending plan based on whatever revenues could be available, and to fund as much of government operations and programs as possible,” said Steve Brown, spokesman for House Speaker Mike Madigan, D-Chicago.
Does that mean a budget that will run out of money in six months?
“No, it’ll be a budget for the whole year. It might require some spending reductions at the executive level,” Brown said.
What it probably won’t have is the 33 percent income tax increase urged by Gov. Pat Quinn, who has threatened to make about $1.2 billion in cuts to public school budgets if he doesn’t get his way.
“The reality is there are legislators all across Illinois who say their constituents can’t afford a tax increase. It’s not like Mike Madigan is issuing a legislative fiat saying no tax increase, it’s that there is no bipartisan consensus supporting a tax increase,” Brown said.
But don’t look for draconian cuts, either, because the same voters who don’t want a tax increase also tell their legislators not to make cuts in services.
“It’s a budget that’s going to be based on the reality here in Springfield, and it’s not pretty,” Brown said, noting that Illinois’ economy is still suffering from the Great
Recession, which has hurt nearly all states as well as the federal government.
“Part of the mindset is to do everything we can to avoid those cuts to education, so all the things being done are works in progress.”
The question is, “How do you achieve that? How do you have a coalition in the House to get that done?” Brown said.
One way to avoid major budget cuts is to borrow $5 billion to $6 billion in addition to not making a $3.7 billion pension payment, said state Sen. Dave Syverson, R-Rockford, who is not advocating such a plan.
Passing a pension obligation bond takes a three-fifths vote, and those votes probably don’t exist. So, Quinn has come up with a new instrument, a kind of IOU. It’s not clear whether that requires a three-fifths vote or not, so another option is to just skip the pension payment altogether.
Meanwhile, students continue their daily pilgrimages to the Statehouse to stump for full funding for education. Tuesday at the Capitol, teenagers from a variety of Chicago charter and alternative schools campaigned against what they said would be 18 percent budget cuts to their schools under Quinn’s proposed budget. For some of these children, their schools represent their second and last chance at getting an education, and they value that chance.
“These schools are great. They have small classes and there’s more focus on me,” said Pablo Reyes of the Antonia Pantoja High School in Chicago.
Charter schools aren’t in for a special budget chopping, said Colin Hitt of the Illinois Policy Institute. But they’ll be cut along with other public schools should Quinn follow through on his plan to cut $1.2 billion in public school funding.
Most lawmakers do not expect school cuts to occur. Instead, Syverson predicts that the governor will need to borrow from $5 billion to $6 billion in addition to skipping the scheduled $3.7 billion pension payment. “It’s being called a pension holiday, but in reality it’s a pension raid,” Syverson said. Illinois’ long-term pension liability is $85 billion, worse than any other state.
Syverson said Quinn just isn’t serious about economizing, noting that “while he proposes $50 million in cuts to mental health programs, the Department of Mental Health budget features $55 million in raises for department employees, and 1,000 employees are getting over 10 percent raises.”
Meanwhile, lawmakers are preparing to stave off 465 State Police layoffs. Tuesday, the House passed a Senate bill raising certain court fees to come up with about $22 million to keep the cops on the force. And there could very well be some minor tax measures, including a cigarette tax increase to raise $320 million and an income tax amnesty to raise $250 million.
State Rep. Ron Wait, R-Belvidere, said most House and Senate members “have been excluded from budget discussions. It’s just House Speaker Mike Madigan and Senate President John Cullerton.”
Wait said he doesn’t expect the final budget will feature dramatic spending cuts, “so the teachers should be happy with that.”
For the pension, they’re going to give an IOU, and they’ll kick the can down the road until after the November election,” said Wait, who is finishing up 26 years in the House.
Wait doesn’t expect action on a tax increase in the fall veto session because any such action would require 71 votes in the House. Instead, he said, lawmakers will leave it until the next governor, either Quinn or state Sen. Bill Brady, R-Bloomington, will be in place.