* Way back in late March, I did a couple of analyses of the budget outlook for subscribers and concluded that a bunch of cash appeared to have been squirreled away. It was impossible to say for sure just how much was available, but it looked to me like it was maybe around a billion dollars or more.
I wasn’t attempting to make the case that the state’s fiscal problems aren’t real, just that the GA could probably limp through this next fiscal year and then essentially kick the can down the road until after the November election. The problems are real for FY2015, but they get much, much more difficult in FY2016, when the full impact of the tax hike expiration will become apparent.
Anyway, kicking the can appears to be what the Democratic leaders have now agreed to do…
House Speaker Michael Madigan on Monday declared an extension of the 2011 temporary income tax increase dead for the spring and said House Democrats are preparing a “middle-of-the-road budget” that eases up on spending cuts that were part of a failed budget blueprint last week.
Madigan informed his 71-member House Democratic caucus that he was taking the income-tax extension favored by Gov. Pat Quinn off the table and shifting budgetary strategy as state lawmakers enter their final week before a scheduled Saturday adjournment.
“We’re proceeding under the expectation that the income-tax increase will not be extended,” Madigan told reporters after a Monday committee hearing at the Statehouse. […]
Madigan said the new spending plan that he expects to emerge soon will be a hybrid of the so-called failed “doomsday” budget that mustered only five House votes last Friday and an earlier, more-generous package of 73 spending bills that passed the week before on the assumption the income-tax extension would pass.
Budget makers will look to borrowing built-up money in special funds and spending adjustments to develop a “middle-of-the-road” fiscal outline – between the doomsday scenario and one that increased spending by $3 billion with the continued escalated income tax.
Madigan said the new budget will be based on a revenue estimate adopted in the House earlier this year that set $34.5 billion as the target. That projection will be increased by $189 million because of revised estimates for next year since the original estimate was set.
Quinn had said “savage” cuts would have to be made to education if the tax hike was allowed to expire. Madigan, though, said the plan is to give elementary and secondary education the same amount they received this year.
“It will be held flat,” Madigan said. “We’re always interested in providing more help for education, but at the same time we’re required to live within the revenue estimates that are available.”
He added that “pension payments will be made.” […]
Asked if the budget under development might results in layoffs and closures, Madigan said, “Those are matters for the agencies and the institutions to decide.”
* Raw MJM video…