Tuesday, July 08, 2008

For better or worse

Don’t expect House Democrats to deliver on the governor’s wish list in the next two days. Gov. Rod Blagojevich called a special session of the General Assembly for Wednesday and Thursday to urge House members to approve a series of revenue-generating ideas, combined with a major capital plan, to help plug a hole in the state operating budget. If they don't, he said he’ll have to cut $1.5 billion from the budget approved in late May. The proposed capital plan also would allow the feds to release matching funds earmarked for road and school construction projects that have accumulated over the past nine years.

The House rejected the revenue and capital ideas this spring, and there’s little evidence to suggest House Democrats would change their minds this summer. House Republicans, who would be needed to approve a capital plan, are expected to support the governor's proposal. Their ability to vote on it, however, depends on whether the proposal even makes it to the House floor in the next two days.

A lot of issues are at play here: 1) stubborn political agendas, particularly between House Speaker Michael Madigan vs. the team of Blagojevich and Senate President Emil Jones Jr.; 2) distrust of the governor to disperse money for the capital projects; 3) fuzzy math, or inconsistent projections about the money needed to balance the budget; 4) fuzzy projections about whether the state would jeopardize about $9 billion in federal funds if Illinois failed to approve a capital plan this year; and 5) the campaign season leading up to the November elections.

Regardless of which combination of factors comes out strongest this week, the consequences of not acting on the governor’s wishes likely would threaten some state employees’ paychecks and some service providers’ reimbursements. With little hope that the House will come through on the governor’s wishes, he’ll likely feel a lot of pressure to cut out portions of the budget by week’s end to prevent state government from shutting down. A spokeswoman for his budget office said last week, “The governor has said there will not be a state shutdown.”

So what would be better for the state? Option a) Balance the budget by allowing the governor to sweep about $500 million of special funds, float a $16 billion pension bonding scheme and approve a major construction plan? That would include leasing the Illinois Lottery, constructing new gaming facilities and expanding of other forms of gambling. Or option b) Reject most or all of those ideas and force the governor to cut $1.5 billion from the budget, which would erase funding increases for higher education and social services and reduce funding levels for many other state operations.

(A bipartisan state panel issued an analysis about a variety of the governor’s proposals. See the report here, but note that it was issued in February based on the governor’s original plans that have since been revised.)

This morning, the governor’s negotiating team pleaded its case for a compromise during a teleconference, led by former U.S. House Speaker Dennis Hastert and Southern Illinois University President Glenn Poshard.

Poshard referred to inconsistencies within the House Democrats’ complaints about the $34 billion capital plan. First, he said, they approved a $57 billion operating budget for one year and gave the governor total discretion to trim where he sees fit. Then they argued that they couldn’t support the capital plan — which Poshard said breaks down to about $5.5 billion a year — because they don’t trust the governor to spend the money as planned. Poshard countered that by describing “accountability provisions” that would check the governor’s power and grant legislative oversight. “Any contention that there’s no limit on the governor’s authority here and that he can end up doing what he wants to do with this money is just absolutely untrue,” Poshard said. He welcomed legislators to propose more ideas, which he said could be considered and added in a matter of days if done in earnest.

Steve Brown, spokesman for House Speaker Michael Madigan, said this afternoon that other proposals were suggested from the beginning but not included in their final proposal. Brown referred to provisions that would define all money allotted to specific projects, reform ethics provisions for the state’s gaming authority and decrease the fee that Chicago would have to pay to acquire a new gaming facility. Brown added that the speaker would be unlikely to sit down with Poshard and Hastert to discuss the ideas. “I don’t know what that gains. I mean, they’ve been aware of all these things for weeks, if not months.”

Requiring construction projects to be defined line by line has never been done before, Poshard said, adding that it could limit the Illinois Department of Transportation’s ability to adjust if projects came in over or under budget. “We discussed all those things, openly, honestly, thoroughly. To come up now and use those two things as concerns and issues, I don’t think are valid at all.”

As far as the best outcome for the state, Brown said this week’s so-called committee of the whole could help legislators decide what to do. The committee is scheduled to start about 1 p.m. and end about 5 p.m., when they’re scheduled to split off into a smaller committee to consider ways to close the budget gap. Brown said they could return Thursday morning but expect to wrap up that afternoon.

Then all eyes will turn to the governor’s office, which likely was the intent of House Democrats when they approved an unbalanced budget in the first place.

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