Monday, June 01, 2009

May 31 deadline certainly leaves uncertainty

By Bethany Jaeger, with Hilary Russell and Jamey Dunn contributing
The General Assembly approved a bare bones budget that funds human services at 50 percent of Gov. Pat Quinn’s proposed levels, but the governor indicated Sunday night that he would not sign the minimal budget into law.

Not only do state agencies and community service providers not know if they’ll have enough to operate for 12 months of the new fiscal year, but the entire state government won’t know whether it’ll have a balanced operating budget before the fiscal year starts July 1.

Quinn would not say he would veto the bare bones spending plan, but he said he wouldn’t sign it. “A partially funded budget is not a budget,” he said about five hours before the midnight deadline to adjourn the spring session. “You’ve got to make sure you have a whole budget for 12 months of the fiscal year.”

He sent members of the General Assembly home after 1 a.m., failing to meet the midnight deadline. But Quinn intends to meet with Democratic and Republican leaders in his Statehouse office Monday.

One more uncertainty from the lack of an agreed budget is when construction will begin for roads, bridges, schools and other infrastructure projects. Although the General Assembly approved a $26 billion construction program 10 days ago, with a second installment approved early Monday morning, Quinn said he wouldn’t sign it until lawmakers sent him a balanced budget.

He said bond-rating agencies and bond buyers wouldn’t buy bonds from a seller (the state) “as long as that seller has a gaping hole in its operating budget of billions of dollars. It’s just common sense.”

To get a balanced operating budget, Quinn said he still supports an income tax increase despite its trouble gaining enough support in the legislature. He deemed the tax as the fairest way to generate revenue because it’s based on ability to pay.

“We have to have a sufficient budget that’s balanced, and that is the only way to go. Our work is not done until that happens, until we have revenues matching expenditures.”

But Quinn had changed his message several times as various budget options gained support throughout the past week. He initially sought a permanent income tax increase of 1.5 percentage points, but he changed to supporting a temporary income tax when it was clear the permanent version wouldn’t acquire enough votes. He changed his stance again Saturday night when the Senate approved an income tax increase accompanied by a sales tax expansion and property tax relief, as well as education funding reforms.

By Sunday, Quinn would not exclusively support either plan. “I’m for any bill that can balance the budget. … If we also can reform an unfair property tax system, I think that’s good also.”

Quinn did urge House Speaker Michael Madigan to find the votes for HB 174, which has been proposed by Chicago Democrat Sen. James Meeks in various forms for the past seven years as a way to address funding disparities between public schools. “I’m counting on Mike Madigan to deliver votes. He’s very good at it. He does the best on the deadline.”

Madigan didn’t deliver the votes. His Democratic Caucus met behind closed doors to take an informal vote on the bill. Rep. David Miller, the sponsor, said it would have only gained 35 votes, far short of the 60 needed for approval.

So the House instead took a vote on Quinn’s temporary income tax. Again, the votes didn’t come. Only 45 members, all Democrats, supported it.

House Republicans remained united against an income tax increase of any kind. Minority Leader Tom Cross said his members were voting against the status quo. “We’re not voting no for the sake of voting no. We want change. We want Medicaid reform and pension reform and some restraint and some discipline.”

Earlier in the day, he said: “To just raise money and hand it over to the same group of people, we’re not going to support that.”

Bare bones budget
When House Democrats couldn’t gain enough votes to either raise the income tax or make massive budget cuts, they resorted to approving reduced levels of spending for state agencies and programs. But it would leave it up to the governor’s administration to decide how to spread the money as far as it would go and decide where to cut.

“It’s better than not having a budget,” said Rep. Jack Franks, a Woodstock Democrat who voted against the temporary income tax.

The plan would generate an additional $1 billion through sweeping unused money sitting in dedicated funds and refinancing state debt to take advantage of historically low interest rates. (SB 1197 is the budget bill; SB 1433 is the fund sweeps bill; SB 1609 is the debt refinancing bill.)

Rep. Dave Winters, a Shirland Republican, said his “no” vote was symbolic. The bare bones budget still would fund all state employee contracts without requiring unpaid days off or restricted travel budgets.

The General Assembly did approve a measure, SB 2090, which would require legislators to take four unpaid days off and would cancel their cost-of-living raises for next fiscal year.

In the Senate, GOP Sen. Matt Murphy of Palatine dubbed the bare bones budget as “the final piece of the failure-to-lead budget.” His fellow Republicans said it was irresponsible to refinance the debt but not pay the first two years of principle on the loan; however, Minority Leader Christine Radogno actually supported the “temporary holiday” from the stringent requirements the General Assembly placed on itself in the 1990s. She said because Republicans oppose tax increases, the refinancing plan would allow some flexibility in the current revenue shortfall and economic recession.

But, she added, “The result right now looks a little like the same old thing, and the fact is the Democrats failed to put together a budget that can take us through the year, despite the fact they have significant majority.”

Sen. Donne Trotter, budget negotiator for the Democrats in his chamber, described the bare bones budget as “the worst bill that we could have passed.” But, he added, it was necessary in the 11th hour — literally with 45 minutes before the midnight deadline — to prevent the government from shutting down operations when the new fiscal year starts July 1.

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