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Budget report: ‘Things were completely different this year’

June 1, 2018 GMT

SPRINGFIELD – The legislature overwhelmingly approved a new spending plan this week, but one local lawmaker broke from the pack and voted no on the $38.5 billion budget plan awaiting Gov. Bruce Rauner’s expected signature.

Retiring state Sen. Tim Bivins, R-Dixon, in his final budget battle, was one of two lawmakers to vote against passage of the budget Wednesday in the Senate. The other “no” vote was cast by state Sen. Kyle McCarter, a Republican from Lebanon.

State Sen. Neil Anderson, R-Andalusia, and state Reps. Tom Demmer, R-Dixon, and Tony McCombie, R-Savanna, all voted for what looks to be the first budget to be put in place before the start of a new fiscal year since Rauner took office in 2015. The spending plan passed the Senate by a 54-2 vote, and by a 97-18 margin in the House.

While the plan was presented as a balanced budget, Bivins said he wanted to see more margin for error, which could have been achieved by cutting spending.

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“As always, this budget was presented just a few hours before the vote,” Bivins said. “There are some great things in it, but whether this is really balanced depends on a lot of things, such as the sale of the Thompson Center and getting pension savings from voluntary buyouts.”

The budget factors in $300 million in anticipated revenue from selling the James R. Thompson Center in Chicago, but that sale has stalled for several years. The voluntary pension buyouts are projected to bring in $445 million.

The revenue side of the budget was helped by a state income tax increase, federal tax policy changes, and improved investment returns. Spending, however, also was bumped up to $38.5 billion.

“I was really torn on this budget – it’s as close to balanced as we’ve seen in a while – but we shouldn’t have spent more, and it doesn’t address any of the long-term issues that put us in this financial situation,” Bivins said.

All four lawmakers agreed that education was a bright spot in the new budget. Early childhood education will get an additional $50 million and K-12 schools stand to receive an extra $350 million, as part of the new state funding formula that took effect last year. Higher education is in line for an additional $56 million, a 2 percent increase.

“This isn’t a perfect budget, but the things that were most important to me and my district were in there,” McCombie said. “I had met with the governor’s staff about education and told them it was very important to keep our promises on education funding.”

McCombie cited a 4-year funding commitment for the Monetary Award Program (MAP) as another significant education win. The program provides grants for Illinois students attending approved state colleges and universities, based on financial need. The grants had not been released when the state was operating without a budget.

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McCombie was the chief sponsor of a bill that called for $63 million in back wages to be paid to unionized state workers. The budget includes money to settle that debt, which dates back to 2011.

Lawmakers had higher hopes for some other areas of concern, but in the spirit of compromise, said the funding levels could have been worse.

“While it would have been nice to find additional money for social services, most are fully funded, and it turned out that there were no public safety sweeps,” McCombie said.

McCombie said she was encouraged by the show of bipartisanship in a surprisingly drama-free budget process. In an election year, the governor kept his demands for fundamental business reforms out of the budget negotiations. Keeping quiet through most of the legislative process, he asked for two things – a balanced budget and no new taxes.

“Things were completely different this year,” McCombie said. “The governor’s and Speaker’s staffs worked together and it was an all-around collaborative effort. People are tired of the politics of the last couple of years.”

Demmer said that a great deal of hard work was done in the past few weeks of negotiating.

“For the first time in the memories of a lot of folks here, we have a budget with bipartisan support,” Demmer said. “Overall, we started the year saying we need a balanced budget that didn’t increase taxes, and this meets the criteria.”

The plan includes a $1.3 billion supplemental appropriation to pay some bills that piled up while there was no budget.

During the negotiations, which began with all four caucuses sitting down together, everyone was mindful of what was most important to both parties, Demmer said.

“No one was going to get everything they wanted, but each side’s priorities were respected,” Demmer said. “It took a lot of time and work, but we didn’t want to get back into a budget impasse.”

Anderson downplayed concerns about the amount of guesswork in the state’s revenue estimates. Projections from party leaders and the governor’s office were close, he said.

“They were all within about $50 million,” Anderson said. “All budgets are based on reasonable assumptions, and if this is off a bit, it appears that it will still be manageable.”

Anderson agreed that the biggest bipartisan push came on the education front. Protecting public safety and social services were also high on both parties’ agendas.

The state still must deal with the fundamental problems that will continue to eat away at the state’s financial viability. The governor’s office must deal with an estimated $6.6 billion debt backlog, and private actuaries say the state’s $130 billion in unfunded pension liability is closer to $200 billion.

“This budget won’t fix everything, but it’s a good first step,” Anderson said. “We’ve spent within our means and now we’ll focus on the fundamental reforms that will keep people here.”

Local government will get to keep a larger share of state income tax money than previously discussed. For years, the governor has threatened to cut the funds by as much as 50 percent, but the budget calls for a 5 percent reduction.

“They had looked at 10 percent, then 15 percent, but last year was 10 percent, so they’ll see 5 percent more, and the administrative fee is going down,” Anderson said.

Anderson agreed that the budget process was very different from previous years.

“You can tell there is true compromise when there’s a feeling of ‘everybody’s happy, but nobody’s happy’, and that’s how this process felt,” Anderson said. “The rank and file wanted to come to an agreement because they realize we can’t keep taxing our way out of debt.”

Lawmakers also approved a $2.2 billion infrastructure plan Rauner pressed for late in the process. Included are $53 million toward the cost of a new veterans home in Quincy, $500 million for a University of Illinois-affiliated innovation center in Chicago, and $360 million for road improvements near the Obama presidential library.

The state’s new fiscal year begins July 1.