CHICAGO - Illinois Gov. Pat Quinn vetoed $250 million in spending for state capitol renovations Monday as he signed into law a series of bills that make up much of the state's $35.7 billion budget for the fiscal year that begins Tuesday.
Quinn also renewed his criticism of the budget passed by lawmakers as a work unfinished. Lawmakers in May adopted a plan that relies on one-time revenues to maintain spending levels in the absence of nearly $2 billion in income tax revenue next year.
Lawmakers refused to either approve making permanent higher income tax rates that expire Jan. 1 or to cut deeply in spending. Top lawmakers agree that the approved spending plan likely won't fully cover the state's expenses through the fiscal year.
"Reducing the budget and identifying additional efficiencies will help minimize the impact of cuts in vital services and maintain our hard-won fiscal gains," Quinn said in a statement. "While there's more work to do, we must ensure the state lives within its means."
The $250 million in appropriations slashed authorized ongoing funding for renovations to the state capitol building. Quinn said the state can't afford the expense for additional renovation in the new fiscal year. Lawmakers could override the governor's action with a three-fifths vote in the fall veto session.
Quinn also directed the Department of Central Management Services to put up for sale nine of the state's 21 planes to save on costs. The state spends more than $7 million to operate and maintain its current fleet. Two of the nine will come from the state police and seven from the Department of Transportation.
Lawmakers are expected to revisit the budget and tax expiration after the November election.
The General Assembly's failure to extend the 2011 income tax hike ahead of its partial expiration next year could negatively pressure the state's already weak credit rating if its bill backlog grows, Moody's Investors Service warned in a special commentary. Moody's rates Illinois A3 with a negative outlook.
The revenue loss in fiscal 2015 is modest compared to 2016 as the tax-rate rollback occurs halfway through fiscal 2015. The deeper losses could further pressure the state's ability to pay its bills.
Quinn's three-year financial forecast released in January warned that if income tax rates decline and no offsetting actions are implemented, the backlog of unpaid bills would almost triple to $16.2 billion in the next three years. Any increase also stands to impact other governments that rely on state aid. The state expects to close fiscal 2014 with a roughly $5 billion backlog, down from a peak of $9.9 billion in 2010.
Illinois is rated A-minus by Fitch Ratings and Standard & Poor's. Fitch assigns a negative outlook and Standard & Poor's a "developing" outlook.