CHICAGO – Agreement among Illinois lawmakers that “doomsday,” “disaster” or “catastrophe” lare coming if the state enters a third fiscal year Saturday without a budget agreement has not moved Illinois House members much closer to a fix.
Democratic House Speaker Michael Madigan’s decision to forge ahead with votes on key reform measures aimed at appeasing Gov. Bruce Rauner’s demands was met with opposition from Republicans who say the proposals don't go far enough to win their support for tax hikes.
But negotiations are continuing with leaders having met on Wednesday and plans to meet again on Thursday.
With divisions remaining over taxes, a local property tax freeze, and worker’s compensation changes, Rauner said the current 10-day special session would continue absent an agreement.
“If the legislature fails to send a balanced budget package to my desk by Friday, we will have no choice but to keep them in session until they get the job done,” he said in a statement.
Keeping lawmakers at the capital may not fend off a likely downgrade to junk territory by at least S&P Global Ratings, a drop that would mark a historic event for a sovereign state in the municipal market. The rating agency warned it might do if the state lacked a budget by July 1 when it downgraded Illinois to the lowest investment-grade rating of BBB-minus earlier this month.
The state’s cash flow is growing more precarious as the state faces a $185 million shortfall in revenue needed to cover the $1.85 billion tab for obligations dubbed core priorities come August, state comptroller Susana Mendoza said in a public address posted on You Tube. That threatens pension contribution and school and local government payments; the only area “off limits” is debt service, Mendoza said.
“The state’s unprecedented fiscal crisis is quickly taking a dangerous turn,” Mendoza said, asking lawmakers and the governor to deliver a comprehensive budget solution with cuts, new revenue and borrowing to pay down the state's unpaid bill backlog, which is near $15 billion.
Transportation projects are set to grind to a halt, some school districts may not open in the fall, and the state’s public universities face accreditation risks.
Both sides are talking about the need for compromise while running campaign-style commercials attacking the other camp as each attempts to make the case that they’ve tried to fix the state’s fiscal mess.
If a budget package fails to come to fruition by Friday evening, many believe each side will further dig in and the impasse could continue until the 2018 election. Democrats will work to win back the governor’s office and Rauner will take aim at chipping away at the Democratic majorities.
Senate President John Cullerton, D-Chicago, urged Rauner to focus on a compromise in the last days of the fiscal year.
“It’s Wednesday. Now is not the time for the governor to give up. Now is the time to find agreement. People are counting on us. Jobs, schools, vital services all hang in the balance. The avenue to success is there. We would hope that the governor would finally show the willingness to end this impasse and end the chaos,” said Cullerton spokesman John Patterson.
Despite GOP opposition, Madigan advanced to the floor pension system changes, worker’s compensation reforms, a local government consolidation bill, and a four-year local property tax freeze.
The property freeze vote of 59-46 fell short of the 71 votes needed to meet the three-fifths super majority to take effect immediately. The others won’t take effect immediately and passed with simple majorities.
Democrats voiced their opposition to the freeze over warnings that it will hurt local government and school district finances but said they would vote for it in an effort to reach a budget agreement as it’s a key Rauner demand.
“This is our effort to say to the governor, although we don’t think we need non-budgetary items to govern budgetary decisions, we understand that it is very important to the person who currently occupies the second floor,” said Rep. Barbara Flynn Currie, D-Chicago.
The GOP dislikes exemptions in the tax-freeze bill that exclude home rule units, pension debts, Chicago, Chicago Public Schools and 18 other districts designated by the state as fiscally distressed. Republicans accused Democrats of calling votes to provide political cover.
“Only three days remain in this fiscal year, time is running out. So after today’s political theater and ‘gotcha’ votes have finished, I’m calling on the legislative leaders to resume meeting and continue negotiations to bring this to a conclusion,” said House Republican Leader Jim Durkin, R-Western Springs.