Friday, May 23, 2008

Welcome to the house of cards

By Patrick O’Brien and Bethany Jaeger
There are 1.7 billion reasons the House and Senate have their work cut out for them as they try to negotiate a state budget by the end of the month.

That’s the difference between the chambers’ closest budget proposals, according to Sen. Donne Trotter, a Chicago Democrat and the Senate’s lead budget negotiator.

Trotter also said the “Christmas tree” budget advanced by the House earlier this week would not be considered by the Senate. “It’s a non-starter,” he said. “We’re not going to that level whatsoever.”

The Senate’s budget plan, which advanced along party lines today, increases spending in some state agencies and modestly increases funding for education. But it depends entirely on the approval of a $16 billion pension bond deal that would go toward pension liabilities. But it also would free up about $500 million that otherwise would have gone into the state’s annual contribution to the five public employee pension systems. See more about how that would work in last night’s blog post.

Sen. John Sullivan, a Rushville Democrat, said the pension deal is far from done. “It’s absolutely going to be troublesome, especially in the House,” he said. “It’s going to be troublesome here as well.” If the deal fails, Sullivan added, the state could have to cut $500 million from state agencies.

Senate Minority Leader Frank Waston said the pension bonds don’t even live up to the obligations Democrats set for themselves in a 2003 deal. “Every year, we go through this,” he said during floor debate. “At some point in time, somebody’s going to have to pay. And unfortunately, reality has not set in, especially on your side of the aisle.”

The GOP voted against the plan because they said it was out of balance, partially because they think Democrats are misjudging the amount of revenue the state’s flagging economy can produce.

Sen. Christine Radogno, a Lemont Republican and budget negotiator, questioned Democrats’ priorities. For instance, they would decrease funding for teachers who work with students in the Illinois Department of Juvenile Justice. “I don’t think the priorities are right at all,” she said. And if the pension deal fails, then the entire budget is out of whack.

Funding for the expansion of the LaSalle Veterans Home also was not part of the Senate’s plan. Sen. Gary Dahl, a Peru Republican, said it was an act of political retribution. “When you pick on my veterans, we’ve got a problem,” he said. “You’ve gone out of bounds on this one.”

The Democratic proposal would increase funding for veterans’ homes, including the one in LaSalle. But Dahl said that wouldn’t be enough to hire the number of nurses necessary to fill beds that are already available but unused. See the next print edition of Illinois Issues magazine, available in the first week of June, for more information about the funding crunch at all of the state’s veterans’ homes.

Trotter simply said the budget proposal lives within the state’s means. “This is the time to be responsible,” he said. “This is all we can afford.”

Here’s a few examples of the Senate’s version of a budget, which all agreed was a starting point:
  • The Senate would spend $29 billion out of the state’s general revenue fund.
  • The Senate budget relies on $1.73 billion in new revenues:
  • $1.2 billion of that would come from such items as state tax revenues and the federal stimulus package.
  • $530 million would come from fund sweeps of dedicated accounts. That would be split up: The Senate Democrats would use $260 million of that to collect federal matching funds to pay Medicaid bills, and then they’d spend $170 million on about two dozen school construction projects that were promised state funds about five years ago. It wasn’t specified how the remaining $100 million would be dispersed.
  • It also relies on the $16 billion pension deal to free up $500 million that otherwise would have gone toward the state’s annual contribution.
  • The Medicaid bills, however, continue to mount, although the Senate Dems’ budget proposal would not include new Medicaid programs. The payment cycle also would remain around 70 days on average, which is not an improvement.
  • The Senate would increase education funding so that the minimum state aid per student reaches about $6,000. It also would increase money available for early childhood education programs and bilingual education.
  • Neither chamber proposes closing any prisons.

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