CHICAGO – Illinois Gov. Bruce Rauner made it official Monday, signing into law the $38.5 billion fiscal 2019 budget lawmakers overwhelmingly approved last week.
“For the first time in years, we have an opportunity to manage our way into balance, and we don’t have to dip into the pockets of overtaxed Illinoisans to do it,” Rauner said. “Balance is in reach because we were able to accomplish $445 million of pension reform and the economy is stronger thanks to federal tax reform, and we are benefiting from an unexpected boost in tax receipts.”
Rauner downplayed the extra $4.5 billion in income tax revenue being collected with passage of an income tax hike by lawmakers last summer as part of a budget package that broke two years of gridlock. Rauner opposed the tax hikes and vetoed that budget but a handful of Republicans broke with him to support it.
With the November elections looming, the acrimony of recent years was put aside to reach the first full-year budget Rauner has signed since taking office in 2015. The state went without enacted budgets for fiscal 2016 and 2017.
This year, lawmakers agreed to a budget plan that trimmed more than $1 billion in expected spending growth and held back another $500 million in new spending being sought, fully funded a $350 million increase in education spending under the new funding formulas adopted last summer, and scaled back revenue cuts to local government adopted last year.
Three pension measures including two that involve pension buyouts – and rely on $1 billion of borrowing -- are projected to save $445 million and about $250 million would be raised from the long-stalled sale of the state government’s downtown Chicago headquarters.
Budget watchdogs say while it’s good the state didn’t return to gridlock, the budget’s “balanced” state is precarious as it relies on uncertain revenues and doesn’t fund a court-ordered step pay raise. It also doesn’t address the state’s roughly $7 billion bill backlog or materially improve the state’s $129 billion pension tab. Both along with the past gridlock dragged two of the state’s ratings down to one notch above junk.
“I’m signing this legislation because it is a step in the right direction, but it is not perfect,” Rauner said, flanked by GOP minority leaders. “We have a lot of work to do before we fully restore the state’s fiscal integrity.”
Democratic budget negotiators attended the signing but Senate President John Cullerton, D-Chicago, and House Speaker Michael Madigan, D-Chicago, did not.