CHICAGO - Illinois Senate President John Cullerton called on Gov. Bruce Rauner to offer a new, balanced budget for fiscal 2016, warning without action the state's battered credit faces a further hit.
Cullerton, D-Chicago, said he doesn't want to see the state knocked down any further as it's already the lowest among states at the A-minus level.
"And that's what's going to happen if we don't pass a balanced budget," he said during a news conference Wednesday.
"We are not going to be competitive if we get downgraded," he said, adding that Rauner, who is pressing for reform measures he says are needed to make the state more competitive for business, might understand that argument.
Cullerton said it's time to hit the re-set button and "start over" with the freshman GOP governor and the General Assembly's Democratic majority still locked in a stalemate over the spending plan more than three weeks into the new fiscal year.
"His plan is dead, our plan is dead .let's start moving forward," Cullerton said.
Rauner vetoed all but the education bills in the $36.3 billion plan lawmakers passed this spring, calling it unbalanced by $4 billion and unconstitutional. Democrats counter that the governor's own $32 billion budget was also out of whack because it relied on savings and spending cuts like pension reforms and group health insurance cuts that either couldn't pass a legal test or required collective bargaining agreement.
Other proposals, like cuts in local government aid, were never submitted in bill form. Cullerton argued Rauner's budget was $6 billion in the hole.
The stalemate is over spending and reforms with Democrats pushing for more revenue to avoid deep cuts. Rauner won't consider that option until Democrats approve some of his turnaround agenda items including a temporary property tax freeze, worker's compensation reforms, tort reforms, and constitutional amendments on redistricting and term limits.
"While some of those ideas are worthy of debate, he has been unable to provide one shred of evidence that his agenda adds one cent to the ledger for our budget crisis in the short term or elevates our credit rankings in the long term," Cullerton said.
The news conference marked an escalation in the budget battle in that Cullerton has largely remained removed from the political bickering over the budget while Rauner and House Speaker Michael Madigan, D-Chicago exchange attacks and barbs weekly.
Cullerton on Wednesday offered a few barbs of his own and Rauner fired back. Cullerton called some of Rauner's turnaround proposals "radical" and accused him holding the budget "hostage" to his corporate agenda. He charged that not only was the governor's proposed budget unbalanced but also "unconscionable" due to its cuts.
The Rauner administration responded. "President Cullerton made clear today that his view of a balanced budget is a budget that makes no spending reforms, no pension reform and only raises taxes," Rauner spokesman Lance Trover said. "Rather than moving our state backward to the failed tax-and-spend policies of the past, we urge President Cullerton to work with us to pass meaningful structural reforms to change the fiscal trajectory of our state."
Cullerton repeatedly turned to rating agency warnings that progress is needed toward structurally balancing the budget to stabilize the state's ratings. "Credit rating agencies have been clear" on factors they are watching, Cullerton said, listing them as a structurally balanced budget, a reduction in the state's bill backlog, and passage of constitutional pension reforms.
The Illinois Supreme Court in May voided the state's 2013 pension overhaul.
In a report earlier this month, Standard & Poor's said it would hold the state's rating steady for the time being despite the gridlock but said its patience is limited. Some of the pressure is relieved as debt payments are made under a continuing appropriation. The agency put the rating on credit watch with negative implications in May.
"In our view, the outcome of the fiscal 2016 budget deliberations will be pivotal to the state's credit trajectory given the magnitude of structural imbalance, pension spending burden, and overall liquidity," analysts wrote. "We could take a rating action within the next two months, even in the absence of an adopted budget if, in our view, there is limited progress in budget deliberations or if credit fundamentals weaken."
Cullerton said he hoped a fix could be agreed to by the time the Senate returns to the capitol on Aug. 4.
Rauner on Tuesday had renewed his attack on Madigan as being to blame for the impasse, accusing him of wanting pressure to build by withholding spending on critical services. "The reality is the speaker wanted pressure to build," he said. "It's all integrated and we have to have reforms first as part of the budget process."
Later in the day, Madigan held his own news conference and said the governor is to blame as he could have used his line item veto to fashion a budget of his liking from the spending sent to him by lawmakers.
"He chose to do an outright veto and put us all in the situation that we're in today," Madigan said. The General Assembly recently passed a one-month budget, but Rauner has slammed it as unconstitutional.
