CHICAGO – Efforts to resolve the Illinois budget impasse took a backseat at the state capital when Republicans pressed standalone pension legislation and a bill giving Gov. Bruce Rauner sweeping emergency budget powers.
Also Wednesday, a bill promoted by Illinois Comptroller Susanna Mendoza was introduced that would require more reporting from the administration on the status of overdue bills held by agencies. The state's total bill backlog has hit record $12.4 billion and Mendoza has warned interest could top $700 million.
With the Senate's bipartisan "Grand Bargain" budget fix stalled because Democrats and Republicans have been unable to resolve several key sticking points, two Republican senators submitted bills Wednesday that would implement statewide pension reforms and one-time pension help for the troubled Chicago Public Schools.
The delay "shouldn't prevent us from moving forward on areas where we agree, including pension reform," said one sponsor, Sen. Michael Connelly, R-Naperville. "Republicans want pension reform that helps the whole state save money while the mayor of Chicago is asking for pension assistance to solve his own pension crisis."
The statewide pension reform legislation is modeled on the "Grand Bargain" pension reform proposal. It also offers $215 million in state funding to help CPS cover its teachers' pension payment due in June -- similar to legislation vetoed by Rauner late last year after state pension changes stalled.
Democrats slammed the Republicans' move because the proposals offer CPS only a one-time infusion of pension funds. The "Grand Bargain" would make permanent the state's assistance, similar to what it provides to all other public school districts.
"That legislation forces permanent pension changes for thousands of teachers, university employees and state workers, and the tradeoff is one-time funding assistance for Chicago schools," said John Patterson, spokesman for Senate President John Cullerton, D-Chicago. "That's a bad deal."
Rauner praised the proposals and said he would sign the legislation if it makes it to his desk. "Making changes to our pension system is critically important to achieving a balanced budget with structural changes to get our state back on track," he said.
Rauner's education secretary, Beth Purvis, called on CPS to support the proposal. CPS did not respond to a request for comment.
Also on Wednesday, the Senate Executive Committee shot down a bill sought by Rauner that would give him sweeping powers to cut spending and dip into healthy non-general fund accounts to balance the state's books absent a budget compromise.
Cullerton and other Democrats grilled state budget director Scott Harry over potential cuts and how the governor would use the authority. Harry said "everything is on the table" but offered no details.
The bill would allow the governor to dip into special funds that hold monies distributed to local governments and pension contributions although the state would need to make up any pension funding delays.
Funds set aside monthly for debt service, early childhood education and kindergarten through 12th grade funding, as well as transportation funds would be protected. The latter is restricted by a constitutional amendment approved by voters in November that ends any diversion of transportation-related revenues.
"It is not anyone's preferred path," said the bill's sponsor, Senate Minority Leader Christine Radogno, R-Lemont, adding that the discussion underscores the "urgency" for a solution and her hope that it "renews" efforts to advance the "Grand Bargain."
Before voting down the Unbalanced Budget Response Act, Sen. Don Harmon, D-Oak Park, said: "You can't tell us what those cuts would be, you tell us you will have to develop them after we give you the power. It's a little like handing a razor blade to a toddler right now."
After the vote, the administration said in a statement: "If Senate Democrats are unwilling to let the governor balance the budget on his own, they have no alternative but to work with him to achieve a bipartisan balanced budget that makes structural changes to our broken system."
Rauner has laid out two proposed fiscal 2018 budgets. One banks on $3 billion of savings from a series of initiatives and the sale of the state's downtown Chicago headquarters, along with billions in additional tax revenue from the "Grand Bargain," to fund $37.3 billion of spending.
Otherwise, the state will have just $32.7 billion to spend based on current revenue projections. The state is currently spending billions more, prompting his request for emergency powers.
Also on Wednesday, a comptroller-backed bill dubbed the Debt Transparency Act was introduced by Sen. Andy Manar, D-Bunker Hill, and Rep. Fred Crespo, D-Hoffman Estates, requiring monthly reporting from state agencies on the number of outstanding liabilities and the estimated interest costs. Current law only requires that the state report agency-held bills only once a year.
State agencies are holding an estimated $4.9 billion of overdue bills which the comptroller's office has warned could cost $700 million in interest and penalties by the end of fiscal 2017 on June 30.
"My office right now has to estimate just how many bills are stacked up at agencies and how much is accruing in interest penalties. This is a crucial tool to get a better handle on this," said Mendoza, a Democrat who has butted heads with the Republican governor over how some debts are being paid.