Budget negotiations remain strained

As the legislative session heads towards the scheduled May 31 adjournment date, the leaders of the four caucuses met several times this week with Gov. Bruce Rauner. Though the Governor’s budget director offered his opinion that a budget agreement is possible by Tuesday, budget negotiations remained strained, with Democrat leaders refusing to entertain Republicans’ calls for common sense, economy boosting reforms as part of the compromise.

The state director of the Governor’s Office of Management and Budget (GOMB), Tim Nuding, stressed that the longer it takes to come to a budget compromise, the bigger the state’s problems get. He underscored serious concerns about keeping utilities and other critical services operating at veterans’ homes, correctional facilities and homes serving the developmentally disabled. However, Nuding cautioned against a stopgap budget, saying kicking the can down the road is not a viable option.

Further exacerbating the tension in the Statehouse, House Democrats, led by Speaker Michael Madigan, rushed a 500+-page budget document through the House, giving members mere hours to review the spending proposal, which GOMB projects is about $7.5 billion out of balance.

A Rauner administration official called the spending plan, “the phoniest phony budget in recent Illinois history – and that’s saying something.” The measure is currently pending in the Senate, but the Governor has indicated he’ll veto the budget if it hits his desk.

Nuding noted that contrary to claims the Governor could veto out spending to balance the budget, in many areas the administration’s hands are tied. In fact, nearly $22.5 billion in state obligations, or 70 percent of anticipated state revenues, cannot be reduced without changes to state law. These obligations include payments on debt service bonds, Medicaid and pension payments, transfers to local government and state employee health insurance costs, among others.

Republican lawmakers are trying to remain optimistic a budget proposal can be negotiated in the next several days, noting “working groups” plan to continue meeting over the weekend. However, many expressed disappointment that Speaker Madigan indicated there was no progress made by these lawmakers who have been meeting in working groups for weeks, trying to find solutions to the budget impasse, forge common ground on reform items and identify ways Illinois can increase revenue.

Contrary to Speaker Madigan’s claims, many lawmakers have said there has been bipartisan progress in a number of areas. In fact, during a Senate GOP press conference this week, lawmakers noted that while rank-and-file members of both parties have been negotiating together in good faith, any positive progress has been stalled by the Speaker.

Republican lawmakers and the Governor are pushing for reforms as part of the final budget compromise. Pointing to the Democrats’ 2011 tax increase—after which Illinois still had a multi-billion dollar bill backlog, the state’s credit ratings were reduced to the lowest in the country and unfunded pension liabilities skyrocketed—Republicans say a tax increase alone won’t solve the state’s problems.

Illinois is just days away from once again ending the spring session. The last time the General Assembly passed a budget, although not a balanced one, was May 15, 2014, over two years ago.

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