Wednesday, July 02, 2008

It's going to be close

Two special sessions next week, called by Gov. Rod Blagojevich this afternoon, is unlikely to solve the state’s pending budget problem. And GOP members have said they think the ongoing budget debate between the governor and Democratic leaders is setting up a proposal by House Democrats to increase the state income tax after the November elections. While Speaker Michael Madigan said this spring that some tough decisions will have to be made and that it could include some "pain," no income tax proposal is in sight.

But time is dwindling. The new fiscal year started Tuesday, and a new operating budget would have to be enacted by about July 10 or 11 before more than 1,000 state employees and some service providers would risk not getting paid on time. Although the General Assembly will be called back to Springfield July 9 to address what the governor says is a $2 billion deficit in the state budget, it’s unlikely the House will follow the governor’s wishes of approving a string of revenue-generating ideas. That leaves little time for the governor to act, including cutting program funding and erasing increased funding for, say, higher education.

Kelley Quinn, spokeswoman for the governor's budget office, said in an e-mail, "The governor has said there will not be a state shutdown."

That decreases the likelihood that he would veto the entire state budget, which would prove to be an popular choice. Legislators would have to spend the rest of the summer recreating a spending plan and delaying state payments until they struck a deal.

The governor wants the House to approve measures already approved by the Senate, including a huge capital plan for state construction projects that also would free up money for the state’s operating budget. House Republicans would definitely support a capital plan, said David Dring, spokesman for House Minority Leader Tom Cross. The problem is that the plan on the table would rely on a large expansion of gaming, the privatization of the Illinois Lottery and a bonding scheme. All three are unpopular with many House Democrats.

Their caucus leaders also repeatedly have said there isn’t enough support for two other cash-producing ideas: 1) floating $16 billion on pension bonds to restructure the state’s long-term debt of the five public employee pension systems, which also would free up about $500 million in cash, and 2) sweeping about another $500 million from dedicated funds that otherwise would be considered “surplus” at the end of the year.

State Rep. Gary Hannig, a Democratic budget negotiator from Litchfield, previously said that he thinks it would make more sense for the governor to use his veto pen to cut some of the spending out of the bloated budget himself, and then the legislature could come back in the fall to reassess the actual size of the deficit and the need to plug any holes.

The governor, however, doesn’t like that idea. He said Wednesday that if the House fails to approve the revenue ideas on July 9, then he plans to call legislators back July 10, as well. If they still fail to follow his wishes, then he’ll have to make those budget cuts himself.

1 comment:

Capitol View said...

your overview should have included the fact that all of the governor's proposals for revenues have already been rejected by the House, and some even by the Senate.

New ideas for revenues, such as extending the sales tax onto moreservices, may have more chance of implementation that resubmitted previously failed ideas to the General Assembly.