Illinois Senate Vote Nears on 'Grand Bargain'

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CHICAGO – Illinois Senate leaders will push for midweek passage of their "Grand Bargain" legislation in hopes of breaking more than18 months of political gridlock.

The prolonged impasse over the state budget, taxes and reforms has left Illinois without a full budget since the end of June 2015, dragged the state's bond ratings down and raised the state government's unpaid bill backlog up to a record $11.5 billion.

Senate President John Cullerton, D-Chicago, and Minority Leader Christine Radogno, R-Lemont, unveiled the package earlier this month during a lame-duck session. They reintroduced the package when the new legislature opened its session on Jan. 12.

The two portray the plan as one that lays the foundation for further negotiation with the House, led by Speaker Michael Madigan, D-Chicago, and Republican Gov. Bruce Rauner.

Madigan earlier this month reiterated his support for other measures such as a millionaire's tax and a corporate income tax cut and the Rauner administration recently warned that the Senate budget plan falls short of balancing the state's books.

"This is a real proposal," Radogno said on WTTW's Chicago Tonight program Thursday, adding that the pair is open to alterations but opponents should then submit their ideas.

"If this passes, this will be a pretty good idea about what the ultimate solution will be to our funding crisis," Cullerton said on the program. "The clock is ticking." A six-month stopgap funding plan approved in June expired on Jan. 1. Much of the state's spending has remained intact based on continuing appropriations and court orders and consent decrees but higher education and social service providers have lost their funding.

The clock is also ticking on another downgrade.

Fitch Ratings has warned that a downgrade looms if state doesn't make progress on fixing its budget mess by the end of January. In the triple-B category, Illinois is already the lowest rated state.

The Senate package would fund the government through the fiscal year ending June 30, raise the income tax and impose a penny-per-ounce tax on sugary drinks. It includes pension funding reforms that could save $1 billion annually but likely face a court challenge.

It would expand gambling by authorizing six new casinos, authorize $7 billion to pay down the bill backlog and provide pension funding for Chicago Public Schools similar to what's given to other school districts.

The package would raise the minimum wage and smooth the way for local government consolidation.

It also includes versions of various governance and policy items Rauner has pushed for as part of any budget solution that raises taxes, such as worker's compensation changes and a local property tax freeze.

Democratic opposition to Rauner's policy agenda has driven the 18-month-old stalemate.

While the fate of the package in the House is unclear, one market participant said it least represents a step in the right direction. "It's movement and it's positive movement," said Richard Ciccarone, president of Merritt Research Services. "This is a real proposal with bipartisan support." The budget plans won't immediately solve the state's budget woes or fully fix its pensions or erase all overdue bills but it would put the state on a path towards shoring up its finances.

The legislation remains a work in progress and an overhaul of local public school funding will also be added after a Rauner-appointed task force issues its recommendations.

Committee hearings will be held on the legislation Tuesday with a tentative goal of a Wednesday floor vote, the same day Rauner will deliver his State of the State address.

Cullerton and Radogno originally said they hoped for passage by Feb. 1 but have sped up their targeted date as they try to halt mounting special interest opposition. Cullerton quipped on the WTTW program that the package has already improved the state's job numbers by the number of lobbyists hired.

Cullerton said the goal of the legislation is to balance the state's books, and that senators will review the Rauner Administration's figures warning of a $4.3 billion gap this year and $2.3 billion next year.

"If we have to make adjustments we will," Cullerton said. "Our goal is to make sure we have enough money to have a balanced budget," with some cuts expected.

The proposed income tax hike to 4.9% from 3.5% would generate an estimated $1.7 billion and the tax on sugary drinks would generate an estimated $560 million annually. The Senate leaders said they did not consider expanding the sales tax to services as Rauner has endorsed, because of difficulties in its quick implementation because of legal issues.

As lawmakers return to the capital, they face a warning that inaction on another front could kill plans for the state to pursue a public-private partnership to build managed lanes on Interstate 55 to relieve congestion.

The Illinois Department of Transportation refiled needed legislation on Thursday that would allow the state to stay on track with the procurement process by authorizing a formal request for proposals. IDOT has conducted 17 interviews with firms based on responses to a request for information conducted last year.

"Without the passage of the joint resolution, the I-55 Managed Lane project will be shelved and a tremendous opportunity to rebuild a key piece of our transportation system will be lost," said Illinois Transportation Secretary Randy Blankenhorn.

The project would add a tolled express lane in both directions to the expressway's existing median between Interstate 355 and Interstate 90/94.

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