CHICAGO – Illinois Gov. Bruce Rauner's budget summit with legislative leaders is being pushed back two weeks as the state's bill backlog climbs and its credit ratings remain under threat.
The meeting between the first-year GOP governor and the Democratic majority and Republican minority leaders, originally planned for Nov. 18, was delayed over the weekend until Dec. 1.
The change followed news that House Speaker Michael Madigan, D- Chicago, who is the primary recipient of Rauner's political attacks, would not be able to attend due to a family funeral. Madigan had said he would send a close legislative allay to represent the caucus. The decision to set a new date was being viewed as positive since backers who pushed for the meeting consider Madigan’s participation crucial.
Rauner in a letter last week to the leaders laid out some guidelines for the meeting which will include public presentations and a private session. "The people of Illinois deserve to hear our negotiating positions in a dignified and respectful manner — uninterrupted and unfiltered. At the same time, I acknowledge the bipartisan concerns we've received about allowing this meeting to become political theater rather than constructive negotiation," he wrote.
Each leader will have 10 minutes to lay out his or her position. The group will then move to a private meeting and hold a media availability afterward. "It affords each of us the opportunity to address the people of Illinois without interruption or media filter — and it strikes a balance to ensure we maintain decorum and a constructive atmosphere for negotiations," Rauner said.
Civic groups frustrated over the lack of a budget and its impact on state services pushed for the meeting. The governor and leaders have not all met since May.
Several state leaders have warned they don't expect a budget deal until the New Year. Rauner offered up a $32 billion general fund spending plan earlier this year while Democrats countered with a $36 billion plan that was at least $4 billion short of needed revenues.
The state lost a major revenue source because of the partial expiration of the 2011 income tax hike on Jan. 1.
Rauner won't support tax hikes unless Democrats adopt his policy and governance initiatives like a local government property tax freeze accompanied with union contracting curbs as well as term limits and tort reforms. Rauner made headway on one of his agenda items – unemployment insurance reforms – last week by reaching an agreement with business groups and labor that Democrats have indicated they will support.
Rauner called reforms "a small step forward in our effort to make Illinois more competitive and grow jobs."
Fitch Ratings and Moody's Investors Service recently downgraded Illinois, which was already the lowest rated state. They now rate the state BBB-plus and Baa1, respectively. Fitch assigns a stable outlook and a Moody's a negative one.
Standard & Poor's has the state's A-minus rating on negative watch.
Some state universities have seen their credit also fall due to the state's budget woes, and Illinois' November payments toward its pension funds was delayed due to the state's precarious cash flow situation. The state comptroller has warned the bill backlog could hit $8.5 billion by the end of the year. Local governments are waiting on motor fuel tax and gambling revenues and Chicago's motor fuel tax credit was dropped due to state delays. Pending legislation would allow for the distribution of those revenues and Rauner said last week he would support the legislation.
A political operative – Greg Goldner -- with both Republican and Democratic ties is pitching a sweeping compromise plan that includes raising the state income tax, extending the sales tax to cover some services, and taxing some retirement income, according to a report in Crain's Chicago Business. To appease Rauner, it would limit collective bargaining rights on health benefits and work rules at the local government level and cap spending growth. It offers up a new pension reform plan, provides $200 million for Chicago Public Schools, and paves the way for a Chicago-owned casino to provide revenue for city pensions. It also raises the minimum wage.
