Wednesday, March 25, 2009

Starting points, but no consensus, yet

By Hilary Russell and Jamey Dunn
It's the time of year when legislative leaders continue to say everything is on the table, but nothing seems to be falling to the ground.

The Senate’s special Deficit Reduction Committee ended today without any clearer answers about solving the state’s financial crisis than when the committee started meeting a month ago. Gov. Pat Quinn also held a meeting with Republican leaders and business leaders today in the Statehouse in an attempt to find some consensus.

Neither provided a common ground. But they did provide more "starting points."

“We had a really good discussion and dialogue,” Quinn said. “I’m sure not everyone is of the same mind, but I think it’s healthy to have a discussion about our economic crisis. The statistics yesterday were extremely sobering.” The state’s unemployment rate reached 8.6 percent, according to the Illinois Department of Employment Security.

The meeting included House Minority Leader Tom Cross of Oswego, Senate Minority Leader Christine Radogno of Lemont and business leaders, including the Tooling and Manufacturing Association and the Illinois Chamber of Commerce.

The special Senate committee charged with finding consensus about where to cut spending out of the state budget with little consensus. Here's the report.

“What we did not come up with in the past four weeks — and this was not the intent of this committee — we did not come up with the final solution,” said Sen. Donne Trotter, co-chair of the committee and a Chicago Democrat. “We did, in fact, meet and define some parameters in which we should start this appropriation process as we go forward with the strong intent to be out of here by May 31.”

Republicans want to cut spending and avoid raising taxes.

“We heard many people from this committee who passionately and sincerely believe that raising taxes is essential,” said co-chair Sen. Matt Murphy, a Palatine Republican. “Speaking for myself, … I think the proposal to raise taxes is profoundly misguided. Raising taxes in Illinois will cost more Illinoisans their jobs. Period. With 8.6 percent unemployment, we cannot afford to lose any more jobs.”

Quinn proposed a 1.5 percentage point increase in the state income tax as part of his budget plan for next fiscal year, which is projected to have up to a $12.4 billion deficit.

Democrats, in turn, said cutting spending is not nearly enough to fill the gap.

“I hope we can also agree that we cannot solely cut our way out of this deficit,” said Sen. John Sullivan, a Rushville Democrat. “The cuts will be, to say the least, drastic and devastating, and when you talk about making some of the cuts that would be necessary to balance this budget, we would be laying off thousands of people across the state of Illinois to do that.”

One way to increase the number of jobs available is for the legislature to pass a capital bill; the problem reverts to how to pay for it.

Quinn proposes funding the capital plan through fee increases and some new tax revenues. Republicans oppose that idea and support gaming as a funding source.

One example is to legalize video gaming. Sullivan said revisiting gaming as a funding source for a capital plan, however, is a mistake. He said that two previous capital bills that included gaming advanced through the Senate with bipartisan support, but they stalled in the House. “We tried it. It didn’t work. There wasn’t enough support in both chambers for it to become law,” he said. “So, why are we still having that discussion?”

Sullivan suggested that lawmakers move on to an income tax increase or come up with some new suggestions for funding sources.

Watch for Republicans to release some proposals next week. In the meantime, Murphy said that some of the broad suggestions made by the committee such as Medicaid and pension reforms are important starting points. The one thing everyone seems to agree on is the need to pass a capital plan. “We just have to get around to doing it and stop making excuses,” Murphy said.
Quinn remains opposed to gambling expansion. " I think it's a bad bet. Take a look at some of the stocks at these gambling firms. I don't think you'd want to buy those penny stocks today.”

Video gaming advances in the House
By Bethany Jaeger
Meanwhile, a House committee advanced a bill that would legalize video poker machines and tax them, potentially generating between $300 million and $500 million a year, according to Rep. Frank Mautino, the Democratic sponsor. He would dedicate the revenue to school construction projects, starting with a list of 23 schools that have been waiting for money that the state promised to them since 2002.

“The realization is that some of the things in the governor’s budget proposal are going to fail,” Mautino said shortly after his bill sailed through committee. “And so there have to be other alternatives that are out there. I don’t think the speaker’s interested in a big gambling package, but here’s something that we have to make a decision to either get rid of it or tax it — because they’re producing this money one way or the other.

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