Illinois State Rep. Anna Moeller was among a dozen Democratic state lawmakers announcing their own "comeback agenda."

CHICAGO — Illinois Gov. Bruce Rauner and lawmakers veered in opposite directions this week, casting more doubt on the prospects for a budget resolution.

With a bipartisan Senate plan aimed at ending the nearly 22-month-old budget impasse still stalled, a dozen Democratic senators and representatives announced Wednesday five policy priorities they dubbed the "comeback agenda."

It's a play on words to counter Rauner's "turnaround agenda" items that he insists receive support in exchange for his backing of tax hikes in any budget fix.

The plan came about from discussions among Senate and House Democrats "frustrated with the lack of progress…the inability to move any positive agenda forward," said Senate President Pro Tem Don Harmon, D-Oak Park.

"We wanted to be for something," Harmon said. "Our problems are so severe in Illinois that it's going to take a long-term plan over years to dig out of this hole."

The senators in the group said they remain behind the "Grand Bargain" but are growing increasingly skeptical that a compromise can be reached, accusing Rauner of repeatedly moving the goalposts for an agreement.

The bicameral proposal calls for a constitutional amendment to allow the state's top earners to pay higher income taxes, shifts from a flat income tax to a graduated one, calls for campaign finance caps, reversing curbs on state-subsidized child care for low-income parents attending college, easing bail restrictions, and placing more restrictions on tax breaks.

"People are tired of the partisan gridlock that has paralyzed Springfield and left us in the situation we find ourselves with the budget stalemate," said Rep. Anna Moeller, D-Elgin. "It's time we move forward."

The Democratic proposals followed the introduction by Sen. Bill Brady, R-Bloomington, of seven budget-related bills Tuesday that would balance the state's books through new revenue and $5 billion in spending cuts. The bills authorize $6 billion in borrowing to pay down the state's $12.4 billion backlog.

Brady called his proposals a "supplement" to the "Grand Bargain" and not a replacement.

"What I'm proposing is a balanced budget that takes into account the new revenues from that compromise but also includes more than $5 billion in general revenue fund spending cuts, adjustments and cost savings, including five percent across-the-board cuts for most of state government outside elementary and secondary education," Brady said.

Rauner praised Brady's proposals as "an important step" in reining in state spending. On the Democrats' so-called "comeback agenda," Rauner said many of the group's priorities are items already under discussion and renewed his call for a budget fix that includes reforms aimed at combating the state's sluggish economic growth and job creation.

Also this week, Rauner launched a television ad campaign saying the Democratic lawmakers who got the state into its fiscal mess only want tax hikes and more spending as part of a fix.

In one ad, Rauner said his "balanced" budget plan freezes property taxes, caps spending, creates jobs, and imposes term limits. "Their duct tape solutions won't work anymore," he said. Democrats countered that Rauner's proposed budget is $5 billion in the red without tax hikes.

On Wednesday, a Republican proposal to overhaul state pensions while providing Chicago Public Schools with $215 million to help cover its teachers' pension payment fell flat. The reforms are similar to a bill that's part of the "Grand Bargain" but that package also provides permanent CPS pension help.

Talk of additional votes being taken this week on the "Grand Bargain," faded Wednesday. Rauner and Democrats remain divided over whether an income tax hike should be permanent.

Rauner wants a temporary hike with local property taxes frozen for the same term. Democrats fear a temporary tax hike will leave the state in the same situation that occurred after the 2011 income tax hike partially expired on January 2015, reducing revenue by $3 billion to $4 billion annually.

The "Grand Bargain" package would include tax hikes, authorize spending through fiscal 2017 which ends June 30, approve borrowing to pay down the bill backlog, make changes to state pensions, help CPS with its pension payments, change worker's compensation, promote local government consolidation, create a new local government borrowing program and expand gambling.

A chief architect of the plan, Senate President John Cullerton, D-Chicago, said while the plan is "stalled" work on it continues and he remains optimistic. He could not say when votes might take place. "Our problem is we don't have enough votes from Republican senators," he said.

This week, several potential Democratic candidates for governor in 2018 raised the specter that the budget impasse might be resolved until after the election.

Illinois' rating could fall to junk if a resolution is pushed off beyond fiscal 2017. The state's general obligation rating is now at the Baa2/BBB level and carries a negative outlook from two agencies and is on another's negative watchlist.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.