Tuesday, June 12, 2007

"Closing in on a collision"

Scratch the Illinois Lottery off the list of major revenue ideas, said House Speaker Michael Madigan Tuesday. The state legislative leaders agree overtime budget “negotiations” lack progress toward an agreement, but they do seem to be inching toward a process of elimination. Madigan said three out of four caucuses “strongly rejected” Gov. Rod Blagojevich’s idea to put $26 billion toward the $41 billion unfunded public pension liability by leasing the Illinois Lottery for $10 billion and floating $16 billion in pension obligation bonds.

Madigan’s statement adds one more item that the House eliminates from the governor’s wish list, including the gross receipts tax and universal health care. But Madigan said the governor doesn’t seem interested in resolving the issues one by one. “I can sit and look at a list of issues that are on the table, and I can go through and personally resolve them,” Madigan said. “But I’m not alone. It requires five people.”

Senate President Emil Jones Jr. said it was “rather foolish” to reject the pension plan. “The other caucuses don’t want to do it, which seems ridiculous to me, because if we do a bond issue and sell the lottery, we’ll cut down on the indebtedness we have with the pension. And we save money,” he said. “Maybe they’ll come to their senses and realize that we have this obligation.”

Senate Minority Leader Frank Watson and his caucus members haven’t taken a final position on leasing the lottery, said his spokeswoman Patty Schuh, but they have “serious reservations.” “Sen. Watson’s concerned that it's perhaps being proposed not for pension relief, but rather for budget relief, to free up cash for the governor to spend.”

House Republican Leader Tom Cross said these budget “negotiations” that include guest presentations aren’t even talking about numbers or a bottom line, yet. And it’s possible that this could just be a waiting game until everyone agrees on the House version of a limited-growth budget. Then everyone goes home knowing that the spending plan won’t get the state through an entire fiscal year.

No end is in sight if everyone remains entrenched in their positions:

1. The governor frames universal health insurance as the civil rights issue of the time.

2. Jones threatens to reject anything that cuts education funding or public services.

3. Madigan points to the House’s limited-growth budget that relies on $300 million in corporate tax break closures.

4. and 5. Republicans in both chambers oppose all tax increases.

Join the waiting game for a contingency plan if no state budget happens before July 1, the start of a new fiscal year. As Cross said, “We are closing in on a collision.”

Wednesday’s leaders’ meeting topic: mass transit funding. Thursday’s topic: property tax relief for Cook County.

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