Sunday, June 01, 2008

We have a budget, but no construction plan

By Bethany Jaeger and Patrick O’Brien
The state will continue to operate with some funding increases for education and human services, but schools and transportation districts across the state will continue to wait for state funding for badly needed construction projects. The Illinois General Assembly wrapped up business for the spring session and isn’t scheduled to return until November, but all are waiting to find out whether the governor will call them back to Springfield to address a capital program.

The last day of regularly scheduled session had some surprises, some predictable outcomes. But it leaves a lot of questions. Here are a few examples of what the legislature did, what it did not do and where we go from here:

What the legislature did:
The House and Senate approved a $59 billion operating budget that could spend about $1 billion more than the state could collect in revenue next fiscal year, which starts July 1. Legislators will leave it up to Gov. Rod Blagojevich to cut programs and projects to get closer to a balanced budget.

The GOP in both chambers rejected the budget for being out-of-balance crafted solely by Democrats. “The ironic thing is you’re going to have the governor be the adult in the situation,” said House Minority Leader Tom Cross during floor debate.

The budget as approved also would increase funding for higher education and human services, including pay for home care workers. It does not improve the Medicaid payment cycle, meaning many doctors could continue to experience cash flow problems as they wait an average of 70 days for state reimbursements.

Both chambers also approved free mass transit rides for some individuals with disabilities, a follow-up to the governor’s initiative to add free rides for seniors as part of a deal to save Chicago-area mass transit from cutting services. And downstate mass transit districts finally are expected to receive the increase in state funding that helps them pay operating costs, which also was promised but never delivered as part of the Chicago-area mass transit deal.

Also, as we mentioned this morning, both chambers sent an ethics reform package to the governor that would ban state contractors from donating to officeholders who let the contracts.

What the legislature did not do:
While House Democrats agreed to let the governor decide how to carve out the budget, they rejected a long-awaited capital program because many of them don’t trust the governor to divvy out the money as promised.

House Speaker Michael Madigan, who held a rare 35 minute news conference after the House was about to finish business, said the governor’s leadership style is one “which brings on conflict and confrontation rather than conciliation.” He said the operating budget limits the way the governor can spend money, but the capital plan wouldn't guarantee the governor would release the funds promised.

What’s next for the capital plan?
The capital plan ballooned to a $34 billion proposal by the Senate, and the longer it’s delayed, the more likely it is to keep increasing in cost. It has expanded and retracted countless times in the past few years. This time, negotiators, led by former U.S. House Speaker Dennis Hastert and Southern Illinois University President Glenn Poshard, did a lot of homework to select the funding sources and the projects that were most agreeable to all parties, but the scope of the plan required a lot more revenue than previously discussed. So the revenue ideas multiplied from creating one new land-based casino in Chicago and expanding positions at the nine existing riverboats to creating three new gaming facilities, expanding gaming at existing riverboats and allowing slot machines at horse tracks. The plan also would bank on a fourth new riverboat when the state’s long-dormant 10th gaming license is cleared of legal troubles. The plan is massive. And it’s controversial.

Now that the House Democrats shot down the opportunity, most legislators look to the November session. Delaying the capital plan does four things:

First, it allows legislators to wait until after the November elections to take a tough vote on a controversial funding source, such as gaming or, gulp, taxes. The speaker said, in general, one of the first places he’d look for more state revenue is an increase in the state income tax. “It’s the fairest tax. If you make money, you pay the tax. If you don’t, you don’t pay the tax.”

And in fact, the speaker said the biggest problem with recent attempts to approve a capital plan is that legislators don’t want to accept the tough choices. “My position is there should be a construction program, but it’s going to require some people to do something which is going to carry some pain. They’re not going to be applauded when they vote for a fee increase or a tax increase.”

He wouldn’t offer any alternative revenue sources tonight, “but we’re open,” he said.

Second, a delayed capital plan waits to find out the results of the federal corruption trial against Tony Rezko, a former insider to the Blagojevich Administration. The longer legislators delay a capital plan, the closer it gets to the end of Blagojevich’s term.

Sen. Dale Risinger, a Peoria Republican, described why he thinks those who want to wait contribute to the ballooning of the next capital program: “We get near the end of the Blagojevich Administration, so there will be some people who say, ‘Well let’s just wait until we have a new administration and see which direction we want to go.’ Unfortunately, with the inflation, the cost of construction goes up. And a couple more years of deterioration of our infrastructure means the program has to be that much larger the next time, which makes it even harder to do.”

Third, it risks losing future federal matching funds. The feds already earmarked about $9 billion for the state, but Illinois hasn’t committed its share. The longer the state waits to put forward the match, the less competitive it gets in securing highway funds in the next federal transportation bill.

Where do we go from here?
We wait to find out whether the governor will call legislators back before November to address a capital plan.

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