CHICAGO – A bipartisan deal to end Illinois' 19-month old budget impasse ran into trouble Wednesday in the state Senate.
The Senate needed party-line votes to pass three of the 12 bills in the proposed "Grand Bargain" budget fix before a fourth bill on pension reforms failed.
A rift over the timing of the votes prompted minority Republicans to yank their support from the bills being voted on, which had been negotiated on a bipartisan basis.
While both sides said they would continue to work on resolving differences, the party-line votes on the three bills and the pension bill's failure to secure sufficient votes from majority Democrats votes raise concerns over the fate of the entire package.
The discord that played out on the Senate floor between Senate President John Cullerton and Minority Leader Christine Radogno highlights the difficult task in bridging the divide over the deal's most controversial pieces.
The package faces a tough road because the pension bill must be voted on again in a new bill form and votes still lie ahead for other controversial pieces of the package, including Senate Bill 9 to raise $6.5 billion of new tax revenue.
After the votes, Cullerton sought to downplay concerns that the budget fix is in jeopardy.
"We've been working closely together every day," and will continue to talk in hopes of resolving differences over the contentious bills, he said.
All bills in the package are tied together so all must pass for the package to move on to the House, where it faces an uncertain fate as House Speaker Michael Madigan, D-Chicago, backs alternative proposals to resolve the budget stalemate.
Gov. Bruce Rauner, a Republican, has offered some support for the Senate's efforts but has withheld an endorsement saying he needs to determine whether the final deal meets his demands for policy and governance reforms.
After pushing votes on the bills off for weeks, Cullerton moved forward Wednesday to consider Senate Bill 3, which would pave the way for local government consolidation, Senate Bill 8 to overhaul procurement rules, Senate Bill 10, which would establish a new revenue-backed borrowing program for home rule units, and Senate Bill 11 to overhaul the pension system.
"There are parts of this package that are definitely not yet settled," Radogno said on the Senate floor, asking her members to vote present as she noted negotiations are ongoing on the worker's compensation reform bill and a tax bill.
The bill overhauling state aid funding has also not been released.
"I just think this needs to go forward as a package," she said.
Cullerton voiced frustration with the delays.
"I think it's time to vote…when are we going to do it if we don't do it today?" he asked.
After the first three bills passed, Cullerton called the pension bill. Radogno appeared caught off-guard by the decision to move it. Radogno opposed calling the other bills but she had expected them and those bills were considered more palatable with no language changes expected.
The pension reforms, which are opposed by public employee unions, are considered one of the more controversial measures in the full package.
Radogno said she was unaware the bill was going to be called "which gives me pause…I believe this is a breach of our agreement."
Cullerton called on Republicans to cast a vote on the bill arguing that Gov. Bruce Rauner has persistently called on the legislature to pass pension reforms.
"We believe it's a constitutional effort to reform our pension system," he said of the changes, which unions have warned they would challenge.
The government consolidation bill passed 36-to-14 with seven voting present. The procurement reform bill passed in a 34-14 vote with 11 voting present. The local government bond program passed on a 36-13 vote with 10 voting present. The pension bill failed on an 18-29 vote with 10 voting present. Democrats hold 37 seats and Republicans hold 22.
"The story is that her caucus is not ready to vote," Cullerton said. "Our caucus is ready to go…that's why we had to start calling the bills."
Cullerton and Radogno unveiled the package late last year but voting has been put off as they tinkered with pieces of the plan amid business and special interest opposition and individual legislative concerns over the types of tax hikes and other pieces of the plan. The tax bill was revised, dropping a business tax in favor of extending the sales tax to cover some services, but Republican concerns remain.
Cullerton also defended calling the pension bill that caught Radogno off guard.
Cullerton said he wanted to call a vote to determine how many Democrats are on board with the plan and noted that the measure is tied to Rauner's support for teachers' pension payment aid for Chicago Public Schools.
Rauner vetoed $215 million in aid to CPS due to the legislature's failure to pass reforms. Rauner and CPS have been trading barbs this week over CPS' announcement of fresh cuts to deal with the loss of revenue.
"We can't wait any longer," Cullerton said.
Other bills in the package include a spending authorization for the second half of the current fiscal year that ends June 30, tax hikes, worker's compensation reforms, education aid changes, an expansion of gambling, a local government property tax freeze, teachers' pension payment help for CPS, and a $7 billion short term borrowing program. A plan to raise the minimum wage was scraped.
With the pension vote failure, the language now must be placed in a new bill and linked to the package. That means the three approved bills will also have to be recalled after the pension bill passes to update the linkage language, said Cullerton spokesman John Patterson.
"The overall deal remains under construction," Patterson said. "The Senate President has already talked to the Republican Leader and we'll see what steps we can take to regain momentum and hopefully deliver a long overdue balanced-budget plan."
The pension overhaul would ask state employees hired before 2011 to accept cuts to their cost of living adjustments in exchange for their future pay raises counting toward their pensionable salary. Unions argue either choice violates the state constitutional protections of pension benefits, while backers argue by offering the choice it meets constitutional muster, in contrast to a previous overhaul that the state Supreme Court overturned..
The bill would also eliminate pensions for future state lawmakers, offer a 401(k)-style retirement option and limit end-of-career pension spiking.
It would phase in over five years any changes in actuarial or investment return assumptions made by the pension systems to ease the impact on upcoming contributions. It would also require the pension systems to offer each member upon retirement the option to take a buyout of 70 % of the present value of his or her pension benefits.
Illinois is the lowest rated state, in the triple-B category. Fitch Ratings downgraded the state earlier this month and further hits are expected absent action in the coming months.