By Bethany Jaeger and Patrick O'Brien
A major piece of the Senate's version of a state budget is unlikely to advance, but that might not hold up the entire budget. The General Assembly has until midnight May 31 to approve a budget without needing Republican votes.
The Senate's plan to float a $16 billion pension bond scheme would refinance the state's five pension systems — which have accumulated more than $42 billion in debt — and pay them off at a lower interest rate. (See more details in our previous blog post.)
If approved, the deal would free up $500 million for legislators to spend in the next fiscal year that start July 1. If denied, the deal would leave a projected $500 million hole.
Sen. Donne Trotter, a Chicago Democrat, said informal discussions with House Democrats about the pension deal indicate it may be difficult to get Republican votes necessary to get a three-fifths majority in each chamber.
The sponsor, Sen. Don Harmon, an Oak Park Democrat, said he has just begun the process of counting whether he has the votes in the Senate. The measure is still being changed and would need to go back to committee before even being called to the floor, leaving little time for the House to act on the same legislation before May 31.
Sen. Christine Radogno, a Lemont Republican, said one of the changes would give more authority to Gov. Rod Blagojevich's Office of Management and Budget, which would prove controversial after recent allegations of scandals involving state contracts within his administration.
Even so, Harmon said lawmakers could approve a state budget by the end of the week even without a pension deal. “We need to get a budget done before the end of May, whether it includes pension obligation bonds or not. We need to get a budget done.”
Rep. Mark Beaubien, a Barrington Hills Republican, said the pension idea has a fat chance in the House. But he said the idea of advancing a bare bones budget without a plan to plug the projected $500 million hole also wouldn't fly. In other words, he said, they may need to start from scratch.
Rep. Bob Molaro, a Chicago Democrat, had a different take. He said a bare bones budget is the way to go. That would allow the General Assembly to come back in the fall to reconsider the size of any budget deficit. “That's an open question, how bad the budget hole is,” he said, later adding, “If it's still out there in November, we come back and figure out the revenue stream.”
Reconsidering a pension deal or any new revenue plan after November would ease some pre-election jitters about voting for something controversial. That would crack the door open a little further for such ideas as floating pension bonds or increasing state taxes. As Radogno said, if the pension deal failed, legislators could pull the sale of the dormant 10th casino license “out of a hat” in an attempt to balance the budget. That deal could be worth about $500 million.