CHICAGO — Illinois Republicans embraced Gov. Bruce Rauner's proposed budget as "bold" while the Democrats who control the General Assembly slammed the depth of spending cuts and labeled a reliance on savings from pension reforms as "reckless."
Criticism of the rookie Republican governor's first budget, unveiled Wednesday, came from all reaches of Illinois, from Chicago Mayor Rahm Emanuel to hospitals, as all take a hit to balance the state's books without any tax increases or the use of one-time revenues.
Rauner proposed a $32 billion general fund, down from a $35 billion fiscal 2015 general fund that is now running about $1.6 billion short of the revenue needed to cover state costs through the fiscal year that ends June 30.
To eliminate what the Rauner administration has projected as a $6 billion hole in the next budget, he would trim the level of state income taxes doled out to local government to 4% from 8%, reduce Medicaid by $1.5 billion, cut higher education by $400 million, and lower local transit funding by $200 million. Rauner also is banking on $2.2 billion in savings from a series of proposed pension changes and $700 million in employee group healthcare savings.
Democrats warned the pension reforms would land in court just like the 2013 pension overhaul that is now before the Illinois Supreme Court after a lower court judge threw it out saying it violated the state constitution. Rauner's budget director Tim Nuding acknowledged the risk of assuming the savings next year and acknowledged details on how the state would accomplish the healthcare savings are still in the works.
Rank-and-file Democratic lawmakers attacked the plan while their leaders were more measured.
"I don't think you can work your way out of a budget deficit by cuts alone," said House Speaker Michael Madigan, D-Chicago. "I think you have to do both, cuts in spending and new revenue."
Madigan did not recommend where that new revenue should come from with the exception of his proposal to impose a 3% surcharge on income of more than $1 million.
Madigan's harshest assessment was reserved for Rauner's reliance on the pension reform savings, which he labeled "reckless," noting that lawmakers did not include savings from the 2013 pension changes in the current budget due to the likelihood of legal challenge, which came to pass.
"For all the pain that Gov. Rauner's budget plan would extract from the most vulnerable people with human service needs, the basic math still doesn't work in his proposal," said Senate President John Cullerton, D-Chicago. "Gov. Rauner leaves a $2.2 billion hole in the budget by relying on unrealistic revenues from a questionable pension proposal."
Some critics suggested the depth of cuts was a political ploy on the governor's part to force Democrats to bear the political burden of approving tax hikes. Rauner left the door open to tax increases if "waste' and inefficiencies are first cut and his defenders suggested there's room to bargain.
Republicans and several business groups defended the plan as bold and a good starting point that puts the state on the path to structural balance.
"It's refreshing to hear from a governor that we are going to live within our means," said House Minority Leader Jim Durkin, R-Western Springs.
"This budget addresses was sort of a reset," said Senate Minority Leader Christine Radogno, R-Lemont. "This tells the people of Illinois that there is going to be very big difference in state government going forward," she said.
"Though extremely difficult, Governor Rauner's budget proposal is among the most politically courageous plans we have seen in Illinois," said Ty Fahner, president of the Civic Committee of the Commercial Club of Chicago.
With Chicago already strained to cover a $550 million spike in its pension payments scheduled next year to meet actuarial required funding levels, Emanuel said the city can't afford the loss of an estimated $125 million in income tax revenue. Emanuel also took Rauner to task for cuts that would scale back on funding for transit and early childhood education.
"You cannot balance the state's budget and its challenges on the backs of families, children most importantly and local government," Emanuel said.
Municipal organizations also warned of the hard hit on local governments across the state, some of which would be forced to raise property taxes or lay off staff including police and firefighters.
Higher education officials and hospital groups also took aim at the level of cuts.
"A budget cut of that magnitude would substantially harm our students and the people of Illinois by most severely impacting the university's core education and research missions," University of Illinois president Robert Easter said in a statement.
The Illinois Hospital Association said hospitals would struggle to absorb a cut equal to 10% in Medicaid funding. "The governor's Medicaid proposal would take the state in the wrong direction and undo the substantial, groundbreaking progress being made to transform the Medicaid program and the state's health care delivery system," said the association's president Maryjane Wurth.
Unions, already feeling under attack due to several Rauner initiatives that would curb labor's powers, slammed the plan. "It is clear his solutions are to simply cut deeply into programs that ensure the economic security of the state's middle class," said Michael Carrigan, president of the Illinois AFL-CIO. Some of the pension changes and healthcare savings will be subject to collective bargaining.
The legislative leaders' comments were broadcast on the Illinois Lawmakers program.
