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Budget coverage roundup

Thursday, Feb 20, 2020

* Sun-Times

For nearly two years during his campaign for governor, J.B. Pritzker pointed the finger at then Gov. Bruce Rauner for holding the state’s budget hostage for the Republican’s “Turnaround Agenda.”

Now, the Democratic governor is doing a turnaround of his own — and Republicans are accusing him of taking a my-way-or-the-highway approach.

Pritzker’s second-year budget includes putting nearly $1.4 billion in reserves, including funding for education — unless his preferred graduated income tax amendment passes this November.

In a sense, there are two budgets — one Republicans and Democrats alike would call balanced. But there’s another — included in the 2021 budget book and discussed in lawmaker briefings — that includes the uncertain world of a graduated income tax.

Rauner wouldn’t sign a budget until he got what he wanted and his veto had to be overridden after a devastating two-year stalemate. Pritzker is proposing a budget that appears to at least come close to balancing on paper, but will expand spending if his tax changes are approved.

Kinda different.

* More

Republican leaders in the General Assembly argued that the choice between the two budgets is a false one, and Pritzker’s address was nothing more than a sales tactic for the graduated tax.

“The reserves he’s calling for are a marketing plan to sell his (graduated tax) increase,” Senate Minority Leader Bill Brady, R-Bloomington, said. “If those resources weren’t there, I don’t think this is the way he would have approached the spending plan and it’s not a way we would approach it.”

OK, but a state law is already in place to raise tax rates on the top 3 percent if the voters approve the constitutional amendment. He, therefore, has a right to do what he did, regardless of the criticism.

* Even so, some of his ideas aren’t being met with open arms

Pritzker’s $42 billion budget proposal would deliver a $350 million increase for K-12 schools for 2020-21 only if voters pass the amendment. If not, he proposes boosting the school budget by $200 million — a sum that, once divided among the state’s 2 million children, would amount to $100 extra spending per child. Proposed increases for public universities and community colleges would similarly be held back. […]

Robin Steans, executive director of Advance Illinois, a group that helped lobby for a revamp of the state’s school formula in 2017, called the proposal “devastating.”

“This two-tiered budget — with some dollars immediately available and authorized, and some dollars held in reserve pending passage of a constitutional amendment enabling a progressive income tax — is a significant blow to our children and the adults who are committed to shaping their futures,” she said.

Mark Klaisner, president of the Illinois Association of Regional Superintendents, said that, because the formula prioritizes districts that struggle most with local property revenues, schools that need it most would still see an increase. The tricky part is the timing.

“Some people will say, How do we handle staffing? Or, will we have to let people go in November,” Klaisner said. “It’s a matter of planning.”

* More react

Democratic Rep. Will Davis of Homewood, the House sponsor of the evidence-based funding formula legislation that then-Gov. Bruce Rauner signed into law, said he has concerns about Pritzker tying the state’s increase to its share of funding education to the passage of the graduated income tax.

“We worked hard to get the education funding formula in place, and I don’t want to see it take any steps backwards,” Davis said. “We’re going to have some serious and some tough conversations about shifting those dollars around and putting things where we think they should be. … As much as we think that’s the great equalizer, then we’ve got to make sure it’s the real priority here in the state.”

Senate President Don Harmon of Oak Park said in an interview with public radio and TV that his Democratic caucus will likely try to preserve the $350 million education funding increase whether voters approve the graduated income tax or not.

* Many, but not all, of Pritzker’s proposed “cuts” are actually cuts to proposed increases if his tax plan goes down

* Proposed increases for universities and community colleges wouldn’t materialize.

* A hiring freeze for state agencies would be implemented around Dec. 1.

* Local governments would see cuts of 5 percent each in sales tax and income tax revenue that is shared by the state.

* A rate increase scheduled for the Department on Aging’s community care program would be postponed.

* Money for state employee group health insurance would be cut by $400 million, possibly leading to longer payment cycles.

* More from Hannah

Another big-ticket item Pritzker’s proposed budget would hold in reserves is $400 million to pay group health insurance costs for state employees.

Republicans objected to this strategy. State Rep. Tom Demmer (R-Dixon) said that logic could lead Illinois back down the path of fiscal instability the state is still recovering from after two years without a budget under former Gov. Bruce Rauner.

“We’re still going to accrue those liabilities,” Demmer told reporters. “State employees are still going to go to the doctor in fiscal year 2021. The difference is the governor saying that if the tax increase doesn’t pass, he’s not going to pay them. But that’s exactly the kind of problem that led us to have the ballooning unpaid bill backlog, and he’s proposing to go right back into this playbook.”

Subscribers know more about what this would do to the bill payment backlog.

* The Sun-Times attacks the pension cutters

No sooner did Pritzker present these two clashing budgets on Wednesday than his critics dismissed his entire argument. The real solution to the state’s financial problems is not a graduated income tax, they said, but a reduction in pensions for current state employees and retirees.

Can we please dismiss this canard for once and for all?

This editorial page has argued for reducing pension benefits as well, but the courts have made clear that iron-clad language in the Illinois Constitution prohibits this. And even a change in the state Constitution for this purpose likely would be impossible, violating provisions of the U.S. Constitution.

The Illinois Policy Institute claims it just wants “benefit reforms,” not cuts. But its favored plan, which was also backed by Gov. Bruce Rauner, would allow state and local governments to cut pension and retiree health insurance benefits going forward for current employees.

* Related…

* State’s cut of pot jackpot will hit $127 million, Pritzker’s new budget predicts: Nearly $100 million of that cash is expected to come from retail sales between July 1 and June 30, 2021. Of that, $36 million will go toward the state’s General Revenue Fund and another $10 million will be put toward the state’s massive bill backlog. Roughly $25 million more will fund the Restore, Reinvest and Renew Program, which was established to finance initiatives focused on unemployment and preventing violence and recidivism. The remaining money will be used to fund mental health and substance abuse services, public education and awareness campaigns and a police grant program. The other $27 million in projected tax dollars will come from wholesale sales and be used to fund the regulation of the program.

* Black caucus supports Pritzker’s budget plan, calls for added minority community investment

- Posted by Rich Miller        

9 Comments
  1. - Candy Dogood - Thursday, Feb 20, 20 @ 10:07 am:

    Illinois: A land where legislators and stakeholders still think it is appropriate to demand increases in spending without understanding that those spending increases are only prudent if there’s an increase in revenues.

    Yes. Of course there will be more funding for K-12 Education if the graduated income tax amendment passes and the legislature approves increasing taxes on rich people.

    No. That money won’t be available without implementing a progressive income tax that allows those that benefit the most from doing business in the State of Illinois to pay a higher income tax due to the success they’ve enjoyed because of our society at large.

    Too many of y’all were in the high school civics class that only showed movies.


  2. - Lester Holt’s Mustache - Thursday, Feb 20, 20 @ 10:17 am:

    As always, republican legislators are more than welcome to introduce a budget package that is based solely on spending cuts instead of revenue increases.


  3. - Grandson of Man - Thursday, Feb 20, 20 @ 10:24 am:

    All this pension-cutting talk is just empty clatter and we’d be better off if it just stopped. The problem is that in their neoliberal phase of the Quinn era, Democrats cut pensions by way of Tier 2 with no corresponding tax hikes on the wealthy, or at least putting a graduated income tax amendment on the ballot and applying pressure to get more support. Of course the ILGOP wouldn’t go along with it then or now.

    To unfortunately say it ad nauseam, we’ve already done pension reform but not the needed tax reform.

    It is a critical and central moral problem, to cut the middle class while leaving the wealthiest with no extra share of our financial burdens. It’s worse when we raise the flat income tax and cut pensions, hitting the middle class the hardest and sparing the wealthiest of paying more.


  4. - Candy Dogood - Thursday, Feb 20, 20 @ 10:47 am:

    ===we’ve already done pension reform but not the needed tax reform.===

    The tax reform is especially important to prepare us for the possibility that the tier 2 pensions are sufficient enough and we wind up on the hook billions of dollars in social security contributions.


  5. - Oswego Willy - Thursday, Feb 20, 20 @ 10:48 am:

    The ball game here is the closing argument to November;

    If we don’t pass the progressive tax, these are the cuts, or y’all are voting for a massive flat tax increase.

    That’s it. It’s that simple a message, it’s that plain of a play.

    The closing argument now has weight and measure to a budget, and the cost of what a flat tax increase will need to be.

    It’s pretty solid politics to a wonky kinda budget thingy.


  6. - City Zen - Thursday, Feb 20, 20 @ 10:50 am:

    ==cuts to proposed increases==

    Maybe they can fire someone not hired and count that as double savings.


  7. - Give Me A Break - Thursday, Feb 20, 20 @ 11:01 am:

    During yesterday’s post budget address interview on NPR, Brady was point blank asked where his caucus could come up with cuts. He didn’t name one area, not one, Just the usual blathering about waste in state gvt. Bottom line is the GOP have no answers other than talking points.


  8. - Demoralized - Thursday, Feb 20, 20 @ 1:07 pm:

    ==He didn’t name one area, not one==

    Those who say that never do. Because if they did they’d have to defend those cuts. It’s easy to say cut. It’s not so easy to justify what you want to cut.


  9. - Heyseed - Thursday, Feb 20, 20 @ 1:34 pm:

    Every line item in the budget has a constituency which will fight for it. That’s why those line items are there to begin.


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