Moody’s has placed the State of Illinois’ Baa3 rating on review for possible downgrade.
The review incorporates our expectation that the Illinois House of Representatives will override Governor Rauner’s veto and implement revenue increases as part of the budget proposal. The review will assess the budget plan’s credit implications and address the likelihood of further deterioration in the state’s most pressing credit challenges:
· Pension liabilities (appx. $251 billion in FY ending June 30, 2016)
· Backlog of unpaid bills (appx. $15 billion)
Moody’s places ratings on review when a rating action may be warranted in the near term, but when further information or analysis is needed to reach a decision. A majority of reviews are concluded within 30 to 90 days.
* More…
New York, July 05, 2017 — Summary Rating Rationale
Moody’s Investors Service has placed the general obligation rating of the State of Illinois, currently Baa3, under review for possible downgrade following the state’s failure to fully enact a timely budget for the fiscal year that began July 1, and its failure to achieve broad political consensus on how to move toward balanced financial operations. The review also applies to several related state debt ratings: the Baa3 assigned to sales-tax backed Build Illinois bonds and the Ba1 ratings assigned to Illinois subject-to-appropriation bonds, the convention center bonds issued by the Metropolitan Pier and Exposition Authority and bonds issued under the state’s Civic Center program. Illinois has outstanding debt of about $32 billion, of which 82% is general obligation.
The state’s government in recent days has made legislative progress towards a fiscal recovery plan based on permanent income tax rate increases, after going through two fiscal years without a complete budget in place. The decision to place the state’s ratings under review for downgrade incorporates our expectation that the legislature will implement revenue increases, overriding the governor’s vetoes. The review will provide a limited amount of time for the Illinois General Assembly to finish voting on the measures, and for assessment of the plan’s credit implications. The review process will also address the likelihood of further deterioration in Illinois’ most pressing credit challenges: its severely underfunded pensions and a backlog of unpaid bills, which has doubled during the past year.
Despite the progress toward budget balance that the emerging fiscal plan embodies, the plan entails substantial implementation risk. The governor yesterday vetoed the plan’s revenue, spending and implementation legislation, citing a $2 billion current-year deficit and the plan’s failure to incorporate proposals in areas such as workers compensation insurance reform and caps on local property taxes. The plan’s approval relied almost entirely on Democratic party support in the state’s senate, and a vote to override the governor’s vetoes of the measures has been deferred by the state’s house of representatives. The plan therefore appears to lack broad bipartisan support, which may signal shortcomings in its effectiveness once implemented. In addition, the state’s baseline tax collections declined in fiscal 2017, suggesting that any tax increase may yield less revenue than anticipated in coming months.
So far, the plan appears to lack concrete measures that will materially improve Illinois’ long-term capacity to address its unfunded pension liabilities. A June 30 order from a federal judge that the state accelerate payments owed to Medicaid managed care organizations and service providers cast doubt on the state’s immediate ability to keep up with its statutory pension contribution schedule while also meeting obligations for debt service, payroll and school funding. The state anticipates addressing its approximately $15 billion backlog of payments owed partly through a bond offering that probably will rank among the largest in the state’s history. This component of the state’s broader fiscal plan leaves Illinois not only dependent on market access to ease liquidity pressures, but also facing a significant increase in its tax-supported debt burden. Moreover, the effectiveness of the state’s strategy to contain and reduce its deferred bills, once the backlog-financing debt has been issued, remains to be seen.
Whew. It never ends.
* By the way, the lead House Democratic budget negotiator Rep. Greg Harris told me this about a recent Tribune story claiming that the bill backlog could be reduced as much as $8 billion…
$6 billion is the total that could be authorized. Currently the revenue available would support $3 billion which could turn to $5 billion if it is used to pay down [federally] matchable Medicaid bills. Should another revenue source become available you could have another $3 billion issuance.
$5 billion is only about a third of the current backlog.
…Adding… Rep. Harris just sent me another text…
There are several other sources to pay down old bills besides bonding. There is $1.2 billion in interfund borrowing, $300 million in limited sweeps, about $800 million in EAF and CHSF and several hundred million from Drug Rebate Fund so the total resources added to the GO bonding would make about $8 billion available for backlog of bills
*** UPDATE 1 *** Just for clarity, I followed up with Moody’s and asked: “So, are you saying that Illinois could still get downgraded even if the House overrides the governor’s vetoes?” The response from Joe Mielenhausen…
Essentially, yes.
We are anticipating that the House will override the veto and the budget plan will be implemented, but essentially we’re now reviewing how the budget implementation will impact the state’s two most pressing credit challenges – pension liabilities and the backlog of unpaid bills – and whether this mitigation will be enough to avoid another downgrade.
All 3 rating agencies have been clear that we must override the Governor tomorrow or we could hit junk bond status. Moody says they assume we will override and “….will provide a limited amount of time for the General Assembly to finish voting”. That time will be tomorrow afternoon. Passing a balanced budget is clearly the single most important thing we must do to start stabilizing our State.
* Earlier today, Gov. Rauner told reporters that he would do “everything possible” to stop his budget vetoes from being overridden. He might want to check in with his wife. This press release is from Illinois Action for Children and Mrs. Rauner’s Ounce of Prevention Fund…
Over the long holiday weekend, the Illinois General Assembly worked in a bipartisan manner to end the unprecedented budget impasse, passing a full-year budget for FY2018 and the revenue increases needed to fund that budget. The governor vetoed the bills and the Senate has voted to override that veto. We strongly urge the House of Representatives to now follow the Senate in voting to override the governor’s veto.
The approved budget — the first full-year, fully-funded budget since FY2014 –provides significant funding to early childhood programs including Preschool for All and Prevention Initiative, home visiting programs, the Child Care Assistance Program, and Early Intervention.
We applaud the members of the General Assembly in both parties who took the tough vote to try to end this impasse. We hope the House can take one more important vote to move Illinois forward.
While it will take some time for early childhood programs to rebound from the impasse, with this override, we are relieved that early childhood programs will be able to shift their focus to rebuilding their programs, providing vital services for children and families, and planning for the future of those children and families they serve.
* Not-for-profit human service groups have done their very best to continue providing services without state money. Countless private companies that provide goods and services to state facilities like prisons haven’t stopped doing their jobs. But all of a sudden road work stops? This seems a bit odd…
Road construction workers across the state were sent home Monday — or not called in at all — with the budget-related shutdown of approximately 900 transportation projects totaling $3.3 billion, according to one of the state’s largest contractor associations.
The Illinois Department of Transportation estimates 20,000 workers are affected.
“By-in-large, it’s a statewide construction shutdown. One member told me he asked people to come in, just in case there was a (budget) settlement, but he sent them home. Most asked them to stay home until there’s a resolution,” said Mike Sturino, president and CEO of the Illinois Road and Builders Association. […]
An email alert on Monday to road-association members advised the shutdown would continue, even though state lawmakers reported some progress toward a budget. Illinois entered its third fiscal year without a full-year budget on Saturday. […]
IDOT notified contractors days ahead of the start of the new fiscal year the department could no longer pay its bills as of midnight June 30 without a budget. Contractors were instructed to secure construction sites, including advisories to motorists.
* Gov. Rauner was asked today what he planned to do to stop his vetoes from being overridden…
Rauner: We are doing everything possible to make sure my veto stands and that it’s not overridden.
Reporter: Like what?
Rauner: Everything possible.
* And he more than implied that the Republicans who broke ranks were tools of the House Speaker. Here’s what he said when he was asked about the Republicans…
You know what? Speaker Madigan and his subordinates should not be working for Wall St. credit agencies, they should be working for the people of Illinois. […]
What we have is a continuing failure by elected officials in Springfield on both sides of the aisle. It’s been led by Speaker Madigan for 35 years. This is more of the same. Our system is broken.
* Asked whether he was concerned that blocking an override would hurt the state’s credit rating…
Rauner: We have to put the peoples’ concerns, what the people need and want ahead of all else. The people should come first in Illinois. Not Wall St., not special interests, not the political class, not the political insiders, not the politicians, not the folks who make money from the government.
Reporter: You don’t think people care about a junk credit rating?
Rauner: What people want is jobs. We need more jobs. What people want is lower property taxes. What people want is a political system that’s not rigged, that’s not dominated by one person, or it’s not corrupt and corroded with special insider deals. People want change, and let’s be clear, this budget is more of the same, this budget and this tax hike is what’s been going on in Illinois for the last 35 years and the system is broken and this tax hike will not fix it.
Don’t listen to some Wall St. firm. That’s not what matters. Listen to the people of Illinois. It’s their concern, it’s their lives… Don’t listen to Wall St., don’t listen to a bunch of politicians who want power and to stay in power like they’ve been for 35 years. Listen to the people of Illinois. People of Illinois don’t want more taxes on their lives. People of Illinois want more jobs. People of Illinois want property tax relief. People of Illinois want a better future for their kids and their grandkids. People of Illinois want a political system that works for them not for the political insiders. And term limits can help get that done. And the people of Illinois want those things.
He did say at one point that his office has been in frequent contact with credit agencies.
* The governor claimed that he’s been negotiating in good faith for “more than two years.” He claimed Madigan “wanted a crisis” to force a tax hike…
And we have got to stand against it. We’ve to to get the people to realize, Democrats, Republicans, independents, this is not about partisanship. This is about the people coming together, rising up and saying, ‘Enough. No more. No more of this system that Speaker Madigan and his loyalists have been doing to us.’
* He was then told by a reporter that he didn’t sound too concerned about a downgrade…
What I’m concerned about is the people of Illinois, so they have a better future. That’s all that matters. We’ve got to put the interests of the people ahead of all else. That means jobs, more good paying jobs. That means property tax relief. That means term limits. And that means better education funding, more education funding for all schools on an equitable basis. Not a special deal for certain politicians here in Chicago. That’s what that means.
Tyler Diers of the Illinois Chamber of Commerce, visited Highland to present the Champion of Free Enterprise Award to Rep. Charlie Meier at Windows on Broadway with Highland Chamber Members and business leaders in attendance. The award acknowledges state legislators who recognize the importance of free enterprise and who agree with pro-business legislative policies to further economic opportunities for Illinois businesses and their employees.
“With Illinois’ lackluster economic performance, there has never been a more crucial moment for our state to embrace pro-business legislators who represent the business community and support the fundamental principles of the free market system,” said Todd Maisch, president and CEO, Illinois Chamber of Commerce.
Locally Charlie is always volunteering. He has been a 4-H leader for 27 years. Charlie has been a Charter Member of the Heritage House and Museum in Okawville since 1982 helping it grow into 3 properties, one of which is on the National Register of Historic Places. Charlie has been an instrumental player in restarting the local AG and FFA program at Okawville High School. Charlie has been a Chamber member since 1992 and presently serves on the tourism tax committee. He is a life member of St. Peters U.C.C. Church, Sunday school teacher, and has served on numerous committees there.
The man has a good heart and clearly loves his community.
* Meier also campaigned against higher taxes. From his campaign site…
Charlie knows we can run Illinois with NO NEW TAXES. He has served on the Washington County Board for the last 5 years. One major project going on is the building of a new Judicial Building and preserving the historic Court House. Due to the abilities of Charlie and the board the judicial building will be built with NO TAX INCREASES. This is what we need in Springfield, someone who will not raise your taxes, but continue to move forward on improvements.
* In June, when Gov. Rauner announced the special sessions, Meier said this…
Meier is hopeful that under Rauner’s leadership, lawmakers will reach a compromise.
“Before I was elected to serve in the legislature, Governor Blagojevich called several special sessions which resulted in no action by the General Assembly,” Meier said in his statement. “I hope the outcome will be different this time due to the fact Speaker Madigan is working with a different Governor. A Governor that actually has a plan to improve our state instead of digging our state deeper into debt.”
But Rauner clearly didn’t have a viable plan. So, some House Republicans started negotiating with Democrats on a budget deal.
* And then 15 House Republicans, including Rep. Meier, voted for it. From Meier’s statement…
The fact of the matter is our state is penniless, flat out broke. Yesterday, the Illinois House voted to send Governor Rauner a budget which spends $3 billion less than if we were to continue operating without a state budget. In addition to passing a budget, the House approved a 1.25% income tax increase, a proposal I supported. The truth is, this wasn’t easy, I realize a tax increase isn’t popular. However, this was the viable option to keep our state government from shutting down and putting lives at risk.
They’ve called him a traitor, a liar, and a Democrat.
Since voting Sunday to increase Illinois’ personal income tax rate by 32 percent, state Rep. Charlie Meier has been lambasted on social media. […]
One commenter wrote: “This is just another ‘kick the can’ exercise. I ain’t buying the statement that this was such a difficult decision. Is anybody else taking a ‘haircut’ on this besides the taxpayer?”
Another wrote: “I cannot begin to tell you how disappointed I am. You are taking food from my kid’s mouth and giving it to the Chicago Democratic Machine. Shame on you.”
And yet another wrote: “Madigan is playing chess and you’re playing checkers. You caved. If people wanted a tax-and-spend Democrat they would’ve voted for one. Oh, I guess they did.”
But did all of them truly break? Did the governor release pressure on some of those members in the eighth hour, knowing that a handful had solidly crossed over? That way, a budget finally passes.
* The President’s Election Integrity Commission didn’t know that Illinois has a State Board of Elections…
Add Illinois to the list of states that are balking at turning over massive amounts of voter data that normally is kept private to a commission chaired by Vice President Mike Pence.
In an interview, Ken Menzel, general counsel to the Illinois State Board of Elections, said the board this morning finally received a written request from the Presidential Advisory Commission on Election Integrity. The commission says it’s trying to prevent voter fraud; Democrats say it is attempting to drive down voter turnout among progressive voters.
The request mistakenly was sent to Secretary of State Jesse White, whose office passed it on to the board.
Menzel said the matter will be researched and referred to the board for possible action. But the board doesn’t meet until Aug. 22, Menzel added, so nothing is going to be happening soon. And it’s clear that at least some requested data will not be going to the feds.
As I’ve already explained (click here) Illinois has strict rules about what the board of elections can and cannot divulge.
* This is such a weird state. The governor vetoes a budget and a tax hike and the bond markets rally because traders figure the General Assembly will ignore him…
Illinois bonds surged as the legislature moved closer to ending a record-long impasse over the budget, reducing the risk that the state’s bond rating will be cut to junk.
The rally came after the state senate overrode Governor Bruce Rauner’s veto to approve tax increases and the first full-year budget in two years, sending the measures to the House of Representatives. Without a spending plan in place, Illinois had been squeezed by chronic deficits and credit-rating companies warned that they may withdraw the state’s investment-grade rank, a step that could have prevented some investors from buying its debt.
“It does look good — it looks like the momentum is there,” said Gabriel Diederich, a portfolio manager at Wells Fargo Asset Management, which has Illinois debt among municipal bond holdings. “When you get shreds of fiscal management and fiscal prudence, even small steps have been greeted positively.”
The average price of taxable general-obligation bonds due in 2035, the most actively traded, jumped 6.5 percent to 110.5 cents on the dollar Wednesday, the highest since the end of October. That pushed the yield down to 6.36 percent from about 7 percent on July 3. The state’s bonds were the most heavily traded municipal securities Wednesday.
* Meanwhile, the Tribune editorial board makes a last-ditch effort to stop the override…
Members of the Illinois House, the decision falls to you. Will you override Gov. Bruce Rauner’s veto of a permanent, 32-percent increase in the personal income tax? Or will you instead insist, first let’s agree on the reforms that many of us promised voters would have to be part of any tax deal?
We ask because if you vote this tax increase into law and then have to admit to your constituents that accompanying “reform” bills are really just diluted eyewash, you’ll look like chumps for Speaker Michael Madigan.
At this writing, an override looks like a terrible risk for you. We say this not because we’re reflexively opposed to tax increases — we aren’t. We say it because Illinois citizens need offsetting fixes from Springfield. Otherwise you’ll own the same old state government and weak Illinois economy, but at a price you’ve just raised by 32 percent. […]
So, House members, if you’ve delivered solutions — on property taxes, on pensions, on work comp, on government bloat in Illinois — then maybe you should vote to override Rauner’s veto.
The Tribune argues that the budget chaos should continue until the governor’s reforms are enacted, but 16 Republicans specifically voted to end that insane and protracted chaos.
You’re going to see a whole lot more arguments like this before tomorrow’s expected override vote.
* There are several ways to look at this new tax hike. You can, for instance, click here and check out the Illinois Policy Institute’s tax hike calculator. Just remember that if you deduct your state income taxes on your federal tax form you’ll have to lower that amount a bit more.
So, we now know how much this will cost you, personally as an individual. But what sort of impact will it have on the state economy as a whole? Let’s first look at the income tax hike revenue projections…
Individual: $4.453 billion
Corporate: $514 million
Total: $4.967 billion
* Let’s start with individuals. According to the Federal Reserve of St. Louis, which used US Bureau of Economic Analysis numbers, total personal income in Illinois last year was $673.983 billion.
So, the new tax will eat up 0.661 percent of total personal income in Illinois. Just for fun, add in the corporate tax projection and it’s 0.737 percent of total personal income (it wouldn’t be that high, but whatever).
* Also according to the Federal Reserve, Illinois’ 2016 Gross State Product was $791.608 billion.
So, the tax hike represents 0.627 percent of total Illinois GSP.
In his Tuesday veto message, Rauner asserted that the budget package was $2 billion out of balance. His office says the legislation counts $500 million in savings on pension costs that aren’t guaranteed and fails to account for $1.5 billion in spending from the budget year that ended Saturday. That money would have to be paid out of the current budget year funds, Rauner’s team contends.
I went over the governor’s veto in detail with subscribers today, but since this is in the public domain, let’s look at it.
* If you click here, you’ll see that the Republicans’ “Capitol Compromise” plan (labeled “Brady June” in the document) booked $1.25 billion in pension savings. As we’ve discussed many times before, the governor’s first budget proposal booked a whopping $2.2 billion in immediate pension savings.
So, spare me the outrage.
* Now, on to the second point. The governor spent a ton of money without any appropriations. He signed contracts for goods and services knowing that there was no legally authorized cash to pay for them. And, now, after spending that unauthorized money, he wants the General Assembly to pay off his bills.
Despite my snark, the state does need to pay those bills. But if the governor wants that revenue, he needs to go negotiate with the leaders to generate it, or make cuts on his own. And that would’ve been much easier to do if he had used his line-item and reduction veto powers instead of vetoing the whole budget in one fell swoop.
* Meanwhile, the comptroller sent out a press release late yesterday describing her new role in life…
While Rauner’s agency directors have never named a cut they are willing to accept, this budget will force $3 billion in cuts to the state budget, finally bringing back some adult fiscal discipline. The imperfect, but thankfully, bipartisan political compromise does not solve all the problems Governor Rauner’s recklessness created, but it helps us stop the haemorrhaging and begin digging Illinois out of his pit.
The Office of the Comptroller has served as the chief trauma center for the state, trying to keep our schools, nursing homes and social service agencies alive. This legislation would lead us to being more of a recovery room, with a trauma unit to deal with the remaining bill backlog.
Notice that both leaders did not respond to the call.
The House has adjourned until tomorrow at 1:30.
* From the Speaker’s office…
The staff continues to assess members’ schedules so we can afford all the supporters of the bipartisan, compromise balanced budget plan the opportunity to vote on the override motion.
*** UPDATE 1 *** Speaker Madigan’s chief of staff just sent this e-mail to House members…
Session is set for Thurs., July 6 at 1:30 pm to consider SB override motions.
In other words, tomorrow could be the big day.
*** UPDATE 2 *** Press release…
Speaker Michael J. Madigan issued the following statement Wednesday:
“The House will hold a vote on Thursday, July 6 to override the governor’s vetoes of the balanced budget sent to him. House Democrats look forward to working with our colleagues on the other side of the aisle to begin healing the wounds of the last several years.”
During his 2014 campaign, Bruce Rauner pledged to roll back the state income tax rate to 3 percent from 5 percent in just four years, reversing Gov. Pat Quinn’s 2011 tax increase. Rauner’s tax plan was a fantasy. He insisted that his “reforms” would create enough economic growth to mostly replace revenue lost from tax cuts.
There was some tax relief after Quinn lost to Rauner. On Jan. 1, 2015, days before Rauner was sworn in, the income tax rate automatically dropped to 3.75 percent. And while Rauner demanded that the rate be allowed to fall, the Democrats in charge of the General Assembly were the ones legally responsible. And then all heck broke loose. Since Rauner took office, state government has suffered a massive fiscal catastrophe, and state taxpayers are still waiting for the full relief he promised.
One of Rauner’s first trips as governor was to Decatur, to unveil his “right to work” plan. He demanded that the state force labor unions to allow their members to escape paying dues. It immediately poisoned any relationship he could have hoped to build with the legislative majority Democrats, who not only rely on unions for campaign help but tend to be strong supporters of union issues.
Rauner wouldn’t sign any bills to raise the income tax rate to help balance the budget, wouldn’t negotiate a budget and wouldn’t even propose a “real” budget until he got his reforms. The state was paying most of its bills in under 30 days before Rauner became governor. It’s now so fiscally impaired that Illinois government is just getting around to paying bills it incurred in October—eight months ago.
While tax revenue dropped, spending went up because state and federal judges ordered the state to pay its bills and because Rauner kept signing contracts for billions of dollars in goods and services even though he knew there was no money to pay for any of it.
So why didn’t Rauner drop “right to work” when his idea faced such fierce resistance? And, many months later, when he finally did back off, why did he insist on slashing the prevailing wage for trade union workers and tying a property tax freeze to a massive rollback of union rights?
* Things got so busy that I forgot to post my syndicated weekly newspaper column. Here you go…
Senate Republican Leader Christine Radogno was the first ever female leader of a state legislative caucus in Illinois. That alone puts her in the history books.
But she’s also a decent human being, something that often seems in short supply around the Statehouse.
The fact that several Senate Democrats showed up for her press conference last week to announce she was resigning and then took turns hugging her after it was over demonstrated the deep well of respect and admiration she had built in the building. She even got a hug from House Speaker Michael Madigan after she told her fellow legislative leaders she was resigning in two days. Madigan isn’t the hugging type, at least not at work.
Legislative leaders, even minority leaders, have big offices, large staffs and, usually, egos to match. But Radogno was genuinely surprised at how many reporters showed up for her resignation press conference.
Her retirement was huge news because she has sparred behind the scenes with Gov. Bruce Rauner all year and reporters figured that had something to do with it. Rauner, a fellow Republican, repeatedly derailed Radogno’s efforts to devise a “grand bargain” with Senate President John Cullerton that was supposed to end the stalemate Rauner created by refusing to negotiate or even present a balanced budget. Tellingly, Radogno did not mention Rauner in her resignation letter, but she denied to reporters that her differences with the governor had anything to do with her leaving.
Gov. Rauner always treated Radogno and her Senate Republican caucus with a heavy hand. Just weeks after he was sworn into office in 2015, he met with Radogno’s Republican Senators in a back room at Springfield’s Saputo’s restaurant and delivered a couple of stern warnings.
Rauner reportedly referenced the $20 million sitting in his campaign fund at the time and said he wanted to be their partner in the upcoming session and would support those who supported him.
And then the hammer came down. Multiple credible sources told me the governor informed the Senate Republicans he would ask for their votes on 10 issues and that he absolutely needed all of their votes on all 10 items. Not five, not seven. Ten. And if anyone in the room didn’t vote for all 10, then they’d have a “(expletive that begins with an ‘F’ and ends with an ‘ing’) problem” with him.
The governor also warned his audience not to leak anything about the meeting to me. Anyone who talked, he said, would have a “(same expletive as above) problem” with him.
The Statehouse tradition is that a governor can try to influence legislators, but can’t try to control them, particularly against the wishes of their own chamber leaders. But Rauner showed right away that he wasn’t concerned with such niceties. And when Radogno started working with Cullerton, Rauner wouldn’t allow any legislation to pass without his blessing. And he didn’t bless much.
Because of Rauner, the grand bargain turned into something it was never intended to be. It was sparked last December after yet another horrible meeting with Rauner and the equally intransigent House Speaker Michael Madigan. Their idea was to find a way to get things moving after a year and a half of total governmental and legislative impasse. Radogno and Cullerton wanted to come up with a Senate-centric, bipartisan solution to Fiscal Year 2017 (which just ended on June 30th), work out some stuff on the governor’s non-budget issues like a property tax freeze and workers’ compensation reform and launch it all over to the House as a way of putting pressure on Madigan.
But the governor figured that Speaker Madigan would drastically water down anything that emerged from the Senate and he wanted the Senate to come up with a solution for Fiscal Year 2018 as well. It was simply too high of a bar. In the end, the Senate Democrats just weren’t willing to go along with the governor’s non-budget and budget demands.
The Senate Republicans elected Sen. Bill Brady, R-Bloomington, to replace Radogno. Brady ran against Rauner in the 2014 Republican gubernatorial primary, but he and the governor are fairly close. The governor probably won’t have many [expletive deleted] problems from Brady, but he has a new role now, so we’ll see.
Radogno and Cullerton had their fights, but they did their utmost to remain civil. Brady is a very likable fellow, so we’ll see how this new relationship works out.
I had an off the record dinner with Radogno after she announced her resignation. We hugged when it was over. I’m really going to miss her because she is truly one of a kind.
* The Senate left town after overriding the governor’s vetoes yesterday, the House is in at 10 and Gov. Rauner will talk about the “Impact of Speaker Madigan’s 32% tax hike with Hegewisch community and business leaders” at 1 o’clock. So, watch whatever happens in real time with ScribbleLive…
They’re reconvening tomorrow at 10. But word is there will be no override votes until Thursday because of attendance issues, but that hasn’t been formally confirmed. It’s just what members have been told.
Senate Republican Leader-Designee Bill Brady (R-Bloomington) offered the following reaction after the Illinois Senate voted to override the Governor’s veto of a budget passed with a permanent income tax hike and no substantial reforms.
“I want to acknowledge the bipartisan participation that this chamber has seen over the last few months, and compliment colleagues on both sides of the aisle for their work. It’s regrettable that I stand today not able to support this package because it is incomplete. We need a comprehensive solution for this state. We’ve negotiated in good faith, but I regret to say, that we have not come to a conclusion on that solution.
“We still need to address the high property taxes in Illinois, and the burden on they place on people and job creators in this state. We still need to address workplace reforms that will bring jobs to and keep jobs in Illinois. We need to address government consolidation and education funding reform. I regret that I cannot support a comprehensive package today, but I hope, and trust, that we will be able to come together and complete our work soon.”
* Keep in mind, these are official, for the permanent historical record veto messages…
Veto Message for SB 6
To the Honorable Members of
The Illinois Senate,
100th General Assembly:
Today I veto Senate Bill 6 from the 100th General Assembly, which is part of Speaker Michael Madigan’s 32% permanent income tax increase forced upon the hard working people of Illinois.
The package of legislation fails to address Illinois’ fiscal and economic crisis – and in fact, makes it worse in the long run. It does not balance the budget. It does not make nearly sufficient spending reductions, does not pay down our debt, and holds schools hostage to force a Chicago bailout.
This budget package does not provide property tax relief to struggling families and employers. It does not provide regulatory relief to businesses to create jobs and grow the economy. It does not include real term limits on state elected officials to fix our broken political system.
Even with the Madigan permanent 32% income tax increase, this budget remains $2 billion out of balance for fiscal year 2018. This budget will require even more tax hikes to balance the budget and pay down the bill backlog. This budget puts Illinois on track for major future tax increases and will lead us to become the highest taxed state in America in the coming years.
Moreover, this budget package holds K-12 school funding across Illinois hostage to force a bailout of Chicago Public Schools. Hidden in this budget are terms that withhold school funding unless the school funding formula is rewritten to shift money from suburban and downstate school districts to CPS.
Budgets in Illinois will not be balanced or stay balanced unless our economy grows faster than our government spending. We have been ignoring that truth for 35 years. This budget package includes no changes to create jobs and grow our economy. It will push more families and businesses out of our state.
Therefore, pursuant to Section 9(b) of Article IV of the Illinois Constitution of 1970, I hereby return Senate Bill 6, entitled “AN ACT concerning appropriations”, with the foregoing objections, vetoed in its entirety.
Sincerely,
Bruce Rauner
GOVERNOR
Veto Message for SB 9
To the Honorable Members of
The Illinois Senate,
100th General Assembly:
Today I veto Senate Bill 9 from the 100th General Assembly, which is part of Speaker Michael Madigan’s 32% permanent income tax increase forced upon the hard working people of Illinois.
The package of legislation fails to address Illinois’ fiscal and economic crisis – and in fact, makes it worse in the long run. It does not balance the budget. It does not make nearly sufficient spending reductions, does not pay down our debt, and holds schools hostage to force a Chicago bailout.
This budget package does not provide property tax relief to struggling families and employers. It does not provide regulatory relief to businesses to create jobs and grow the economy. It does not include real term limits on state elected officials to fix our broken political system.
Even with the Madigan permanent 32% income tax increase, this budget remains $2 billion out of balance for fiscal year 2018. This budget will require even more tax hikes to balance the budget and pay down the bill backlog. This budget puts Illinois on track for major future tax increases and will lead us to become the highest taxed state in America in the coming years.
Moreover, this budget package holds K-12 school funding across Illinois hostage to force a bailout of Chicago Public Schools. Hidden in this budget are terms that withhold school funding unless the school funding formula is rewritten to shift money from suburban and downstate school districts to CPS.
Budgets in Illinois will not be balanced or stay balanced unless our economy grows faster than our government spending. We have been ignoring that truth for 35 years. This budget package includes no changes to create jobs and grow our economy. It will push more families and businesses out of our state.
Therefore, pursuant to Section 9(b) of Article IV of the Illinois Constitution of 1970, I hereby return Senate Bill 9, entitled “AN ACT concerning appropriations”, with the foregoing objections, vetoed in its entirety.
Sincerely,
Bruce Rauner
GOVERNOR
Veto Message for SB 42
To the Honorable Members of
The Illinois Senate,
100th General Assembly:
Today I veto Senate Bill 42 from the 100th General Assembly, which is part of Speaker Michael Madigan’s 32% permanent income tax increase forced upon the hard working people of Illinois.
The package of legislation fails to address Illinois’ fiscal and economic crisis – and in fact, makes it worse in the long run. It does not balance the budget. It does not make nearly sufficient spending reductions, does not pay down our debt, and holds schools hostage to force a Chicago bailout.
This budget package does not provide property tax relief to struggling families and employers. It does not provide regulatory relief to businesses to create jobs and grow the economy. It does not include real term limits on state elected officials to fix our broken political system.
Even with the Madigan permanent 32% income tax increase, this budget remains $2 billion out of balance for fiscal year 2018. This budget will require even more tax hikes to balance the budget and pay down the bill backlog. This budget puts Illinois on track for major future tax increases and will lead us to become the highest taxed state in America in the coming years.
Moreover, this budget package holds K-12 school funding across Illinois hostage to force a bailout of Chicago Public Schools. Hidden in this budget are terms that withhold school funding unless the school funding formula is rewritten to shift money from suburban and downstate school districts to CPS.
Budgets in Illinois will not be balanced or stay balanced unless our economy grows faster than our government spending. We have been ignoring that truth for 35 years. This budget package includes no changes to create jobs and grow our economy. It will push more families and businesses out of our state.
Therefore, pursuant to Section 9(b) of Article IV of the Illinois Constitution of 1970, I hereby return Senate Bill 42, entitled “AN ACT concerning appropriations”, with the foregoing objections, vetoed in its entirety.
Ah, the joys of message synergy. Madigan, Madigan, Madigan. This will most definitely continue indefinitely.
* The Institute has also posted a cartoon shaming Republicans for bipartisanship…
* Press release…
State Senator Jason Barickman (R-Bloomington) released the following statement after Senate Democrats passed an unbalanced budget: “It’s extremely disappointing that after all the progress we have made in negotiations, Democrats would simply ram through an unbalanced budget that doesn’t offer any fixes or reforms for the systemic issues that continue to plague Illinois. This budget does little to nothing to pay down the massive bill backlog nor will it stop the constant exodus of people and jobs from our state. We need bipartisan solutions, not more of the same failed ideas and policies that got us here.”
The Tribune reports today that the package would allow the state to generate $8 billion, mainly from federal matches, to pay down the backlog. The rest is gonna be the governor’s problem unless another deal is cut, I suppose.
* And another…
State Senator Dan McConchie (R-Hawthorn Woods) releases the below statement following the House and Senate passing a budget plan, which includes a major tax increase:
“To say I am disappointed would be an understatement. Raising taxes and failing to address any of the fundamental issues that plague our state is detrimental to taxpayers. We’ve seen this before and it doesn’t work. This is the exact same failed approach the state took in 2011—increase taxes without addressing the underlying issues hurting our state. Continuing the mistakes of the past will not bring us a brighter future.
“This budget plan is bad for businesses and especially bad for families, and it certainly isn’t attracting people and businesses to Illinois. We had a real opportunity to come together and find bipartisan compromise. Unfortunately, today was a missed opportunity.
“Although I am saddened by the votes today, I remain committed to working to make Illinois competitive and a state that people can be proud to call home.”
* Keep in mind that these are Senate bills, so the Senate has to go first, and as of 12:01, the bills aren’t on the governor’s desk according to LIS, but Cullerton’s spokesman said a short while ago that he believed they had been delivered. The Senate Democrats told me they would send them to Rauner as soon as possible.
But, man this could be cutting it close because the markets and the ratings agencies re-open tomorrow morning…
Extra confirmation. Madigan spokesman Steve Brown says the House won't vote TODAY to override Rauner's pending vetoes of budget bills.
Speaker Michael J. Madigan issued the following statement Tuesday:
“I’m disappointed that Leader Durkin has chosen not to attend our leaders meeting for the second day in a row. Democrats are committed to working with Republicans to find common ground on the remaining non-budget issues that have long been prioritized by the other side of the aisle, but we can only do so if Republicans are willing to negotiate with us. It is my hope that Leader Durkin will return to the table to discuss the issues that he and Governor Rauner have insisted by considered alongside the state budget.”
Senate GOP Leader Brady has indicated that if Durkin doesn’t go to the meetings then he won’t go, either.
JB Pritzker released the following statement following the passage of a bipartisan state budget by the Illinois General Assembly:
“For nearly three years, Bruce Rauner has driven our state into crisis and inflicted pain on tens of thousands of Illinoisans,” said JB Pritzker. “Now, as Republicans and Democrats come together to declare enough is enough and finally pass a budget, for Bruce Rauner, not even the threat of a complete meltdown can get him to do his job.
“Bruce Rauner has no intention of letting this crisis end. As he has for 734 days, Rauner will continue using school children, college students, seniors and people with disabilities as pawns in his game to drive this state to bankruptcy and junk status. Rauner is a one track mind with a single goal of ramming through a special interest agenda that leaves most Illinoisans behind.
“Democrats and Republicans in the General Assembly did their job. And while the damage caused by Bruce Rauner can never be undone, for the sake of our children and families, I hope Governor Rauner will step up and sign the bipartisan budget plan that’s being delivered to his desk.”
So, Pritzker is openly willing to own support for a tax hike. Interesting.
* Biss campaign…
Daniel Biss released the following statement as the House and Senate reached agreement on a budget.
“The House and Senate have agreed on a budget, and sent it to Governor Rauner’s desk. This budget has support from Democrats and Republicans—it’s far from perfect, but it will open schools in the fall, fund vital social services, pay public sector employees, and put our state within the realm of financial solvency. Governor Rauner has committed to veto it.
“Rauner’s obstructionism is nothing new to Senate Democrats, or to the people of Illinois. What is new, however, is that he is losing control of his own party. In response pressure from their constituents, many of my Republican colleagues, including members of both houses, voted in favor of the budget and in defiance of Rauner. This isn’t about political parties or ideological commitments, it’s about doing what is necessary to save our state — and we will be prepared when it becomes necessary to override the Governor’s veto.”
…Adding… Press release…
Ameya Pawar, 47th Ward alderman and Democratic candidate for Illinois governor today issued the following statement in response to Gov. Bruce Rauner’s decision to veto a bipartisan and balanced budget bill that passed both chambers of the Illinois General Assembly:
“Republicans and Democrats in both houses came together this week to pass a responsible budget that protects middle class families and finally puts our state on a steady fiscal path. With his veto, the governor made very clear that he doesn’t care about the future of our state and the hard-working families that make it great.”
“Instead, he is holding our future hostage to achieve two selfish and dangerous goals: to destroy organized labor and the fundamental protections they have won for workers, and to use Chicago schools as a scapegoat now that he’s done paying to clout his own child into the public school of his choice. Today’s actions make it clear that only one person stands between a bankrupt state and a bright future. It’s time for Bruce Rauner to go.”
*** UPDATE 1*** Raw audio of Sen. Righter’s media availability thanks to our very good buddy Dave Dahl…
*** UPDATE 2*** Righter said he’s had several conversations over the past several day which helped him come to the conclusion that a “Yes” vote was the right vote…
“This state has to start balancing its budgets. That is the first and most important thing. Every dollar that we throw on to the backlog of bills is a dollar that the next generation has to pay for even though we got to spend it. That’s simply wrong.” […]
“Obviously, I am elected and work for the people of the 55th Senate District and that’s who made the call today.” […]
Righter said the impasse has been “very harmful” for EIU and the “university system as a whole.”
“In the end you vote your district, and my district told me to vote for this package.”
Asked what people should cut from their household budgets to pay for the tax hike, Righter said, “Everyone’s gotta balance their budget at home.”
Righter said he spoke to the governor’s office and Leader Brady and “both were very respectful” of how he was planning to vote.
“Today, I represented my district,” he said at the end.
[ *** End Of Update *** ]
* So, why did Republican Sen. Dale Righter break with the governor and vote for a tax hike, budget and BIMP bills? His local Eastern Illinois University president worked him…
* The Senate approved SB 9, the revenue bill, on a vote of 36-18.
Senate Republican Leader Bill Brady asked for more time to negotiate. But the bill’s sponsor, Sen. Toi Hutchinson, replied “We don’t have any more time. We know we don’t.”
“We are faced with the fierce urgency of now,” Hutchinson said. “We don’t have any more time.”
Hutchinson claimed the package before the Senate was the result of two years of bipartisan talks and a “lot of give and take.”
“It is time to be the independent legislature the framers demanded,” Hutchinson said, urging her colleagues to show they are members of a “co-equal branch,” which was a clear dig at Gov. Rauner.
…Adding… Sen. Dale Righter, a Republican, voted for the bill. Democratic Sens. Tom Cullerton and Julie Morrison voted against the tax hike.
…Adding More… Roll call…
Roll call on revenue bill in Senate. Sen. Righter, a Republican, who voted yes. pic.twitter.com/FO0m87cBAl
*** UPDATE 1 *** The Senate has approved SB 6, the omnibus appropriations bill with 39 votes. It should’ve had 40, but Sen. Martinez said her button wasn’t working. Roll call…
Republican Sens. Anderson, Fowler, McCann and Righter voted for the bill.
*** UPDATE 2 *** The budget implementation bill passed 36-17 without any debate at all.
…Adding… The Tribune’s headline writer strikes again…
* Rep. C.D. Davidsmeyer, R-Jacksonville, voted in favor of both bills. “I was concerned about the downgrade. I was concerned about the backlog of bills growing from $15 billion to $25 billion. At the end of the day, we ended up with a 4.95 (percent) income tax, as opposed to next year, where it would probably be a 5.55 income tax. I was trying to decrease the impact on my constituents.
“I’ve talked to a lot of my constituents, and after I explain, they understand. There’s a lot of people from outside of my district that are upset. I’ve had threats of hanging from a tree and things like that … just words, on Facebook.
“At the end of the day I think we can be civil and have a discussion, but I think it’s fiscally conservative to lower the amount that we’re spending currently today. We’re spending $39 billion. We’re taking it down to $36.5 billion. I think that’s a fiscally responsible thing to do.”
Their inboxes and social media feeds are jamming with hate mail, but three suburban Republicans say they wouldn’t change their votes on a state income tax increase, given what’s at stake. […]
[Rep. Mike Fortner (R-West Chicago), a former mayor, said the $36.5 billion budget proposal was less than the nearly $39 billion spent last year and included reforms such as a government consolidation bill.
“Increasing the income tax has never been my preferred option,” Fortner said. But “my balance point was reached. This was a real balanced budget, there were real reductions in spending levels, and sufficient reforms to move forward.”
Suburban Democrats who voted for the budget bill but against raising taxes included Marty Moylan of Des Plaines, Michelle Mussman of Schaumburg, and Sam Yingling of Grayslake.
Assists from the 15 Republicans gave Democrats in volatile districts leeway to defect. But Moylan and Yingling said any legislation without property tax reforms was a nonstarter.
If a property tax freeze had been included, “maybe it would have made a difference,” said Moylan, a former Des Plaines mayor. “I don’t want to raise taxes on the middle class and working class. This could hurt job creation.”
Yingling is concerned about the state’s bond rating tanking but hoped negotiations will continue between Rauner and party leaders for a resolution.
“Regressive property taxes are forcing people out of their homes,” Yingling said. “As long as they stay in place they’ll continue to struggle.”
The lone Republican to do the same thing, Rep. Dave Severin, was not asked about his votes by local media. Instead, they focused solely on his “No” vote on the tax hike.
Voters, take note: The 10 Democrats and one Republican who voted against the tax hike but in favor of spending have to be held accountable to their own endless rhetoric about the need to pass honest budgets.
Remember, Democrats control this process in both houses. They have been the party insisting for years the budget could not be balanced through spending reductions alone. Higher taxes had to be part of the equation: Illinois can’t possibly cut its way out of this mess … Until Sunday, that is, when 10 of them slithered away from their party’s long-held position.
They’re hoping you won’t notice their double talk. We hope you will. It’s called hypocrisy.
Madigan told reporters that Republican leaders skipped out on a leaders meeting on Monday afternoon but said he will continue to work with Republican leaders about changes to workers’ compensation and a property tax freeze.
While he described Republican support for the income tax as a show of resistance against Rauner, Republican leaders believe Democrats abandoned the negotiating process by moving forward with the votes. Illinois Republican Leader Jim Durkin’s office confirmed he wouldn’t attend a leaders meeting on Tuesday.
At issue are some of the requests made during negotiations. Durkin’s office contends Democrats asked for a “good faith” vote from Republicans on the spending plan, which they came through with last week, and an assurance they would help to override the governor’s veto of a bill which, in part, authorizes phone carriers to pay out 911 centers.
Both of those happened, yet Madigan — despite ongoing negotiations on reforms — moved forward with votes.
Good points. But 15 of Durkin’s own members broke ranks to support the tax hike. They clearly saw different writing on the Statehouse walls.
…Adding… From comments…
Also, the day before, when Madigan announced his plans to not hold votes on Saturday and Sunday, Durkin went to the floor to excoriate Madigan for not getting a budget package to the floor that very day. And then the House GOP applauded Durkin wildly, and one GOP member even heckled the Speaker.
So Madigan called his bluff.
Don’t gamble unless you are willing to have your bet called. Durkin has no leg to stand on here.
“We worked with Republicans today on those issues; we’ll continue to work with the Republicans on those issues until they’re resolved,” Madigan said.
Republicans appear unconvinced. Rauner spokeswoman Catherine Kelly said the speaker is “clearly trying to distract from his 32 percent permanent tax hike.” Spokeswomen for Senate Minority Leader Bill Brady and House Minority Leader Jim Durkin would not say why the two men didn’t attend Monday’s meeting, but Durkin’s office said he would not attend Tuesday. Brady’s spokeswoman indicated without all leaders attending, Brady won’t either.
The absences raised questions in Cullerton’s mind about where negotiations, particularly on the tangential Rauner demands, stand.
“We have to do something,” Cullerton said. “The House has acted but we’d prefer to do it in agreement with Republicans.”
Southern Illinois University System President Randy Dunn, according to a spokesman, called the vote by Bryant and the other 14 Republicans a “heroic stand” in the midst of a historic political standoff. Bryant said she’s also received words of encouragement and thanks from regional school superintendents, health care providers and others. […]
Southern Illinois’ economy is more vulnerable to the effects of the ongoing impasse than other regions because large percentages of people are employed by the state — at prisons, mental health facilities, and public aid, driver services and other government offices — or by entities that are directly supported by state funding, including hospitals, social service agencies, universities and community colleges and K-12 schools, she said. […]
Bryant and the others who supported the bill, “stood up not just for SIU, but the entire Southern Illinois region,” Charles added.
Dunn also thanked Rep. Brandon Phelps, D-Harrisburg, who joined with the majority of Democrats voting in favor of Senate Bill 9. The bill would raise the personal income tax from 3.75 percent to 4.95 percent, and the corporate income tax from 5.25 percent to 7 percent.
It’s about time that a university president finally stepped up on this. Their institutions are on the verge of death. They need to speak out.
Also, where’s AFSCME been? Where’s SEIU? Where are the trade unions that rely on road construction work?
The groups that are against a tax hike have ginned up an intense social media firestorm. But the groups which rely on government have stayed mostly mum.
* Both of the teachers’ unions have announced support for the tax hike, however. This is from the Illinois Federation of Teachers President Dan Montgomery…
“Last night, we breathed a sigh of relief as a bipartisan supermajority of lawmakers found a way out of our state’s two-year budget crisis. As we prepare to celebrate the 4th of July, it finally felt like we had gained independence from Governor Rauner’s political threats and radical agenda that lowers taxes on the wealthy while working families struggle.
Of course, it didn’t last long.
The Governor’s pledge to veto this strong, bipartisan agreement and worsen the damage is deplorable. Five universities have reached junk bond status. The state owes more than $1 billion to our K-12 schools and $15 billion to businesses who have provided goods and services expecting to be paid. Social services are shuttered.
But Governor Rauner couldn’t care less, because he’s never wanted resolution.
He said he would happily shut down government and create a crisis for leverage to enact his agenda. And while claiming to negotiate in good faith, he spent millions of dollars on political ads attacking those with whom he was supposed to be working.
On behalf of more than 100,000 educators, staff, and public employees across Illinois, we want to thank lawmakers for doing the right thing, particularly the fifteen House Republicans who courageously stood up to Bruce Rauner who would rather see Illinois crumble than prosper.
We urge the Senate to follow the example of their House colleagues and vote for this bipartisan revenue and spending plan, and when approved, we urge Governor Rauner to end this madness and sign the bills immediately.”
Tonight, the Illinois House of Representatives took a major step toward stabilizing the financial crisis Illinois has been in for more than two budget-less years.
We thank the members of the House for taking this step to vote on a full and balanced budget – especially those Republicans who saw the dire circumstances our education systems in this state were facing – and stepped up to support them.
We urge the Senate to concur with this budget plan and we strongly urge Gov. Bruce Rauner to sign it.
“From the preschool student learning to write his name and add his numbers to the university student planning her future career, this budget bill gives our state hope,” said IEA President Cinda Klickna.
“Education and the state of Illinois are too important to be allowed to crash and burn. Thank you for finding common ground for the good of us all.”
*** UPDATE *** Shortly after the Senate’s votes today, the U of I sent this to legislators…
We are grateful to the legislators who voted to support the budget that provides funding for the second half of FY17 and for the full year of FY18. This financial support is crucial to ensure the continued excellence of the University of Illinois System, which enrolls more than 81,000 students and plays a key role as an engine of progress for our state. We hope the lessons learned during this long and difficult impasse will help to restore long-term stability and provide predictable funding year after year so we can plan our future and expand our impact on the public good. We urge the governor to sign the legislation.
Thank you!
Jennifer M. Creasey
Director State Relations
Office of Government Relations
Statement from the office of Illinois Senate President John J. Cullerton. Please attribute to spokesman John Patterson.
The Illinois Senate will be in session Tuesday morning to vote on a balanced budget.
The Senate President attended a leaders meeting this afternoon with the expectation of finalizing an agreement on workers compensation and property tax relief legislation as part of the ongoing effort to win the governor’s signature on a balanced budget. Unfortunately, the Republican leaders skipped the meeting.
The Senate is committed to finishing the work it began in January and hopes to finally find bipartisan agreement to put an end to this chaos and restore stability to our state.
I think what you saw with Republicans engaging in bipartisan support of the [tax hike] bill, in my judgement, was a reaction to the positions adopted by Gov. Rauner; the tactics employed by Gov. Rauner and his staff over several months.
So, we have not had a normal legislative process in the Illinois legislature. There’s been an undue level of intimidation by the governor and his staff relative to people in the legislature. […]
Despite what the Tribune says about me, I only engage in persuasion. I work with my members. We thoroughly discuss these issues in our caucus. My method is to use intellectual persuasion, to persuade Democratic members and sometimes Republicans on the wisdom of a position or a vote. I don’t engage in intimidation. I don’t engage in threats. And you won’t find one member of the legislature who would ever tell you that… I’ve been here long enough to know that it doesn’t work.
“Persuasion” can sometimes be in the eye of the beholder. Also, he doesn’t have to issue threats because people already know what crossing him entails.
I will veto Mike Madigan’s permanent 32% tax hike. Illinois families don’t deserve to have more of their hard-earned money taken from them. pic.twitter.com/7F9xkl2S5X
Moving forward, this vote shows that if the legislature is willing to pass the largest tax hike in state history with no reforms then we must engage citizens and redouble our efforts to change the state.
* Speaker Madigan told reporters today that he “would move to override” all three bills the House has passed over the past couple of days. Those would be the tax hike, the approp bill and the BIMP.
Those are all Senate bills, however, so the Senate Democrats would have the first crack at an override motion, and they have their own issues right now. But Madigan predicted the Senate would approve the bills.
* Madigan said he thought the two Republican leaders “should have been here” for today’s scheduled meeting of the four tops.
The House Speaker said he would schedule another meeting tomorrow at 10 o’clock in the morning..
“We’re continuing to work on what we call the ‘off-budget’ issues,” Madigan claimed. “We will continue to work with [the Republicans] until it’s resolved.”
* Senate President John Cullerton just told reporters that the two Republican leaders did not attend today’s leaders’ meeting, which had been scheduled to begin at 1 o’clock.
I told subscribers earlier today that this might happen. After yesterday’s tax hike vote, the Republican leaders wanted to avoid “negotiating the terms of their own surrender.”
Cullerton told reporters that he was still very willing to work on non-budget issues like workers’ comp and a property tax freeze. “We are still ready to move legislation regarding reforms, not just what the House has acted on, pending caucus talks,” Cullerton said.
* When asked whether he had enough Democratic votes to pass the tax hike on his own, Cullerton said he’d have to ask his caucus first, but said it would be “very difficult” to do it without GOP votes. The Senate Democrats put 32 votes on SB 9 in May, but they’ll need 36 to pass it this time around.
As I also warned subscribers, Cullerton said he had some missing members today.
Below is a statement from State Rep. Steve Andersson (R-Geneva) on his support of the budget compromise that passed the House on Sunday with bipartisan support.
Yesterday I voted to create a balanced budget for the State of Illinois for the first time in more than 2 years by voting for SB 6 and 9. In addition to reducing spending by approximately 3 billion dollars, we needed to also increase revenue, which required an income tax increase to slightly lower than what Illinoisans were paying in 2014. I did not want to vote for a tax increase, and like my fellow Illinoisans, I do not want to pay a tax increase. However, it was, at this juncture, the only viable option.
Why? Here are the realities that we faced that led us to this place:
1. If we had not acted, as the bond markets opened today, the State would be downgraded to junk status- the first time for any state in the entire country. “Junk” is more than just a clever name. With a junk rating, most institutions legally cannot buy our bonds. This makes our ability to borrow virtually non-existent which is essential to even keeping minimal state services functioning. Without funding, our universities and community college faced de-accreditation. This would gut our institutions of higher education which not only are commercial drivers in the state, supporting entire communities, but provide education and opportunities keeping our students in Illinois to help build the future of our state. Instead, those students would be uprooted in the middle of their education, and they would have to find alternatives, if that is even possible.
2. The Comptroller advises that starting in July the state’s cashflow will enter a stage where we won’t have enough money to pay our core bills (these include items such as bond interest payments, state employees’ salaries or anything else) because we will only be paying back due bills. In other words, Illinois will have no money at all for expenditures, and being in junk bond status, no ability to borrow. Further, last week a Federal Judge ordered the state to prioritize payment of back due Medicaid payments to the tune of 600 million dollars a month in addition to everything else we are required to pay. It is not an exaggeration to say that there was the very real possibility that the state of Illinois would not be able to survive this added burden.
Simply put, the state was out of money and about to actually shut down and we were out of time as key financial raters threatened to reduce the credit rating of the state as soon as Monday. Yesterday was the absolute last chance to avoid this catastrophe and absolutely, the last and final resort we had.
Of course, nobody wants a tax increase.
Some have argued to “hold out” and pass a better designed budget with just budget cuts. This would require cutting as much as 45% of anything that was “cutable”. This means police, fire protection, schools, higher education and social services. The reality is “cuts only” did not have the votes. Without the votes, even the best budget will never become a reality. And in this case those votes simply did not exist and would not exist.
So, we were left with two bad choices and only two bad choices. As your legislator, I was sent here to govern and I had to pick the least bad of the two horrible choices. I chose to save the state first and continue to fight for reforms. The other option was to me unthinkable, irresponsible, and immoral. To allow the state to fail was in my eyes, just not an option. If I allowed that to happen, the resulting damage would spell disaster for our state and be decades in the recovery, if at all.
Now as a result of this action, the State can live on. More negotiations can and are happening and we continue to have a chance to improve our state. The other choice effectively ended the State of Illinois. As my friend Rep. David Harris said, I was not elected to preside of the destruction of our great state. That was not an option for me, either - I chose survival for the State of Illinois. And I believe I made the right choice given the circumstances.
* Meanwhile, Rep. John Cavaletto (R-Salem) explained his vote for a tax hike to a local radio station…
Cavaletto said the turning point for him came when the Republican caucus was given information on the devastating impact and scary situation the state’s bond rating being reduced to junk status would have on Illinois. He questioned how the state could build itself back from the bankrupt situation and said an increase in the income tax didn’t worry him as much.
Cavaletto said you could have heard a pin drop in the Republican caucus after the presentation.
“I hate tax increases, hate them, and it will hurt small business to do this, but I also think it hurts small business when you ask them to do business with the state and then you don’t pay them,” she said. “We must have a balanced budget, and if that means that we must increase taxes right now to do it, I, like one of my other colleagues, know I’m probably going to get primaried on this,” she said, referring to the possibility of losing her seat in the next primary election.
“Do I want to raise taxes? Absolutely not. Do I think it’s the right thing to do down the road? Absolutely not. But I want you to remember what we’re doing here today. We’re paying the bills for our bad behavior, even before I came here.”
“There are a couple of organizations in the state that are extremely far right, and their preference is to burn the place down and then build it back up again, and they are never going to think it’s ok to vote for a tax increase. “
If Rauner does veto the plan, he will be able to run for re-election without the albatross of having been the Republican responsible for permanently bringing the income tax rate up from 3.75 to 4.95 percent—a 32 percent jump.
That’s only if the GA successfully overrides him (or even tries). But, yeah. I and others have been saying this for weeks and weeks. A veto override gives the governor all the benefits of the new state revenues and the anti-tax political issue.
In voting for the tax hike before Rauner’s sought-after reforms, the governor loses leverage in future negotiations.
But [Rep. Steve Andersson, R-Geneva] says Democrats still have incentive to work with Rauner on his [non-budget]wish list.
“The governor still needs to sign this,” he said. “There is a motivation to get to a ‘yes’ from him so that we don’t have to come back and override”—something there is no guarantee would succeed.
Rauner has repeatedly threatened to veto a permanent income tax hike unless it’s tied to a permanent property tax freeze, and the bill the House passed was a permanent income tax hike.
The increased likelihood that Illinois (BBB-/Watch Neg) will soon have a budget in place is a development with significant credit implications, in S&P Global Ratings’ view. Passage of tax and spending legislation by Illinois’ House of Representatives on July 2 represents a meaningful step toward the enactment of a comprehensive budget for fiscal 2018.
We had previously indicated that, in our view, because of the state’s structural deficit and the magnitude of its unpaid bills, its fiscal trajectory was unsustainable. More immediately, a recent federal court ruling (and the potential for others) compelling the state to fund more of its obligations each month threatens to provoke a liquidity crisis. The protracted failure of Illinois’ lawmakers to assert governing control over the state’s finances has, in effect, begun to directly undermine the state’s discretion over the allocation of its resources.
Enactment of a comprehensive budget with revenue and expenditure alignment could help put a halt to this erosion of the state’s sovereignty over its fiscal affairs. In this way, the legislation passed by the House could represent the first step in a stabilization of Illinois’ fiscal outlook and may lead to an easing of pressure on the state’s credit quality.
Even with a budget, however, it’s likely that Illinois’ finances would remain strained and vulnerable to unanticipated economic stress. In addition to having accumulated record amounts of payables, the state’s university system has been deprived of state funding since January 2017. If a budget is enacted, the degree to which it closes the state’s structural deficit, provides a pathway for addressing the backlog of unpaid bills, and its impact on cash flows, will be important factors in our review of its effect on Illinois’ credit quality.
Conversely, in the event progress toward a budget falters, the weakened condition of Illinois’ finances and liquidity provide it with minimal margin at its current rating level, as detailed in our June 1 CreditWatch placement statement.
* Starting right now and running through the remainder of this overtime session, I’m banning the use of exclamation points in comments. If you use an exclamation point, your comment will have to be approved manually - by me - and it will only be approved if you use it in a humorous, ironic or other acceptable manner. I’m sick of the uptick in shouting, particularly from the newbie trolls on both sides. Yeah, tensions are high, but go scream on Facebook if you feel such urges. Get it out of your system and then you can come back here.
If I could, I’d also ban the use of all capital letters, but I’m not able to do that. I’d love to ban the improper use of “your” when it’s used as a contraction of “you are.” I’d also love to ban the misspelling of “lose” as “loose,” or “ad” as “add,” or “moot” as “mute.” Alas, none of that can be done, either. But lemme tell ‘ya, that stuff drives me up a wall when I see it.
* The Question: What word or words would you like to see banned from the comment section? Explain.
House Democratic women request meeting with Gov 2 implore him to retract his threat to veto the budget & save our state from junk status. pic.twitter.com/pY3AxYnDCx
— Rep Sara Feigenholtz (@StateRepSara) July 3, 2017
Sit in by House Democratic women in Gov Rauners office demanding a meeting to save our state and keep schools open!! #DoYourJobpic.twitter.com/DL1T4pwkeU
GOP Reps. Barbara Wheeler, Keith Wheeler, Margo McDermed, Grant Wehrli, Tony McCombie, Lindsay Parkhurst, Jeanne Ives and Peter Breen showed up.
The group of anti-tax Republicans whipped out their own phones and apparently started asking the Democrats about their tax hike plan. The Democrats then returned to the floor. I’m hoping to find video of the latter exchange. If you see it somewhere, post a link in comments.
…Adding… From the Democratic women…
“We believe now is the time to end this state budget impasse and yesterday’s votes are an important step toward a solution. Our group today visited the Governor’s office to request a meeting with the Governor to ask him to approve this package.
We have made significant compromises and have seen bipartisan support for a balanced budget. Rather than issuing veto threats, we want to meet with the Governor to explain why this is the right solution and hope he will meet with us soon.”
* This is a huge blow to the Illinois House. Bipartisan, hard-working, tenacious and an all around good guy…
State Representative Chad Hays (R-Catlin) announced today that he will not seek reelection in 2018. He has served in the General Assembly since December of 2010 and as Assistant Minority Leader since 2013.
“Serving in the Illinois House of Representatives has been a supreme honor and a tremendous privilege,” said Hays. “I have been a passionate advocate for Vermilion and Champaign Counties and the East Central Illinois area, and sincerely appreciate the opportunity to temporarily occupy the seat representing the 104th District.”
Hays pointed to a changing political climate in Springfield as a contributing factor of his upcoming exit from State politics. “The functionality of the Illinois General Assembly today is simply untenable and counterproductive,” said Hays. “Legislators who care deeply and have the courage of their convictions and the intestinal fortitude to do what is right regardless of consequences are increasingly silenced. I believe we are in serious jeopardy of independent thought being a relic in our public discourse.”
The current dislike and distrust between the Governor and Speaker of the House has paralyzed government in Illinois. Ego, money and power eclipse the desire of well-meaning and honest public servants. Blame, press conferences and talking points have replaced governing. Voices of moderation and reason are increasingly elbowed out by well financed fringe elements.
Our State faces financial calamity due to years of spending well beyond its means and the collective inability of leaders to put petty, partisan differences aside for the common good.
The Governor’s office has struggled with identifying which fights to fight and what constitutes victory. Politics is the art of the doing the doable, particularly when you are in the minority. The pathway to success for the Administration is to seek and build upon incremental progress.
The rules of engagement in the House of Representatives are the conduit to one man unilaterally controlling the Legislative process in a total and complete end run around Democracy. The stifling nature of the House Rules render “we the people” void of a voice or even a venue from which to be heard. The House has become a remote outpost in relation to what our Founding Fathers had in mind.
There truly are legislators who care deeply, have the courage of their convictions and the intestinal fortitude to do what must be done regardless of consequences. They are increasingly silenced and dwarfed by monied bullies. We are in serious jeopardy of independent thought being a relic in our public discourse.
The functionality of the Illinois General Assembly today is simply untenable and counterproductive.
* For months, newspapers, pundit, etc. have been screaming “Get a budget!” So, what happens when the House passed what appears to have been a balanced budget? Check out the headlines…
* Tribune: Madigan’s House approves major income tax hike as Republicans break with Rauner
* Sun-Times: Illinois House OKs income tax hike, spending plan; Rauner vows vetoes
* AP: Rauner says he’ll veto hike in Ill. income tax
* Daily Herald: Rauner promises to veto income tax hike
All tax hike, all Rauner veto, all the time. With a sprinkling of “Madigan!”
Polling consistently shows that Illinoisans do not want a tax hike. So, from that perspective, Gov. Rauner “won” today’s headline war.
*** UPDATE 1 *** From the Illinois Republican Party…
Hey Rich,
In addition to the headlines you posted, Governor Rauner’s message is also cutting through the clutter on social media. The Governor’s veto message on the Bruce Rauner Facebook page was the farthest reaching organic post ever for Rauner. That post has already organically reached over 300,000 individual newsfeeds.
Taken together, posts from Rauner and ILGOP pages about Madigan’s tax hike and last minute budget organically reached over 550,000 newsfeeds since yesterday. That’s not even including the Governor’s official side veto post, which received even more shares.
The prospect of Madigan’s massive tax hike - the largest in state history since it is a permanent increase - is activating voters who otherwise have been passive observers of the impasse so far.
* From Comptroller Mendoza’s statement last night…
We still have a long road ahead to a comprehensive budget plan to pay down our $15 billion backlog of unpaid bills that has tripled in the two years since Governor Rauner took office.
It’s actually worse than that. Except for K-12, last year’s stopgap budget only contained appropriations for half the year. Universities, social service groups, business vendors, etc., etc., etc. never got an appropriation for the second half of Fiscal Year 2017, which ended Friday.
The second half of FY 16 ended the same way and the state’s leaders just sent that down the memory hole.
So, they not only need to deal with most of that backlog (they don’t have to deal with all of it at once, just as long as they can get it down to a 30-day payment cycle), they also have to figure out what to do about the billions they never got around to appropriating in the first place.
* Aside from passing a temporary tax and then not preparing for its partial rollback, the other giant failure of the Democrats in 2011 was not dealing with the overdue bills. That debt was like a massive ball and chain being dragged around by the government’s neck, and it didn’t get resolved for four years, helping to convince folks that the tax hike “didn’t work” and that Pat Quinn was a failed governor. Borrowing to pay off that debt would’ve done wonders for Quinn, and so I’m curious whether the Democrats will “help” Rauner out this time.
The Illinois House of Representatives on Monday passed a bill for the final piece of the state’s fiscal 2018 budget that includes authorization for $6 billion of bonds to pay down a $15 billion bill pile.
The budget implementation bill was sent to the Senate on a 72-36 vote. The House on Sunday passed appropriation and revenue bills that require concurrence votes in the Senate.
In passing the budget implementation bill, a dozen House Republicans joined majority Democrats to reach a 73-vote threshold that could withstand a possible veto by the governor if the measure passes the Senate. Republican Governor Bruce Rauner has already said he will veto the revenue bill that includes a big income tax rate hike. […]
State Representative Greg Harris, the House Democrats’ budget point person, said enough money has been identified only to cover debt service on $3 billion of bonds and that the rest of the debt could be issued once additional revenue is available.
Sigh.
$3 billion is almost a point on the income tax.
There’s also some dispute over the language in the BIMP about when the bonds are supposed to be paid back.
Rep. Sue Scherer, D-Decatur, voted for the spending bill but against the tax increase legislation.
* By my count, 11 House members did the same thing. Just one was a Republican (Dave Severin). The rest were Democrats who are either considered targets or think they are…
* Rep. Scott Drury voted “Yes” on the tax hike and “No” on the spending bill. Rep. David Harris voted for the tax hike, then didn’t vote on the approp bill. Rep. Michael McAuliffe voted against the tax hike, then didn’t vote on the spending bill.
Over the weekend the State of Illinois made concrete progress on reaching an agreement to break the two-year long budget impasse, according to Fitch Ratings. The state House of Representatives passed both spending and revenue measures with some bipartisan support in special session on Sunday. The tax increase legislation, an amendment to Senate Bill 9, would permanently raise the personal income tax rate to 4.95% and make other revenue enhancements. There is also apparent accord on significant budget reductions to align spending with expected revenues. The bills now return to the state Senate for concurrence, where a super-majority vote is required to raise taxes. The governor has threatened to veto the revenue increase although there appear to be sufficient votes to override the veto
Fitch downgraded Illinois’ rating to ‘BBB’ on Feb. 1, 2017 and maintained the rating on Rating Watch Negative. At that time, Fitch indicated that the Rating Watch would be resolved within six months based on an assessment of the state’s fiscal trajectory as it starts fiscal 2018 and that failure to enact a balanced budget for fiscal 2018 would result in a further downgrade.
Fitch will continue to monitor the developments in Illinois. Enacting a budget that sets the state on a path toward budgetary balance and provides a means to address the state’s accumulated budgetary liabilities would stabilize Illinois’ Issuer Default Rating and related ratings. Temporary or partial measures, or a failure to enact a budget within the context of this session, would result in a downgrade. The continuation of spending without sufficient revenues, particularly in light of the ongoing legal challenge to the state’s prioritization of other payments ahead of Medicaid payments, will increase liquidity pressure. The state risks losing full control of its budgetary decisions, which would be inconsistent with the current rating.
If there is no evidence-based model in place, the appropriations for K-12 aren’t any good.
They drafted the approp bill so that only an evidence based model can spend the appropriations.
The Illinois State Board of Education can’t distribute any money if an evidence-based model distribution formula isn’t passed.
So, the governor has to sign something or schools get no cash.
The Republicans have their own evidence-based model bill, but it’s not yet going anywhere and Speaker Madigan has repeatedly insisted that Rauner sign SB1, the Democrats’ school funding reform bill.
*** UPDATE *** I’m told by the governor’s office that should the Senate pass the tax hike bills the governor will take “immediate action” when it hits his desk. “So members shouldn’t plan to go anywhere.”
[ *** End Of Update *** ]
* Press release…
Governor Bruce Rauner today issued the following statement following the House of Representative’s passage of a 32 percent income tax hike without any reforms to grow the economy, create jobs, or provide property tax relief:
“When I took office, I promised the taxpayers of Illinois that I would fight every day to take this state in a new direction after decades of failed leadership from both parties. Today, Springfield has decided to give the people of Illinois the largest tax hike in history and continue out of balance budgets with no real reform.
“Under Speaker Madigan’s direction, legislators chose to double down on higher taxes while protecting the special interests and refusing to reform the status quo. It’s a repeat of the failed policies that created this financial crisis and caused jobs and taxpayers to flee.
“I will veto Mike Madigan’s permanent 32 percent tax hike. Illinois families don’t deserve to have more of their hard-earned money taken from them when the legislature has done little to restore confidence in government or grow jobs. Illinois families deserve more jobs, property tax relief and term limits. But tonight they got more of the same.
“For two and a half years we have been working to find common ground on a balanced budget. As recently as two days ago we believed that was possible.
“The legislature could have passed a no reform budget like this one two years ago. Instead, they allowed Mike Madigan to play his political games, passed phony budgets, racked up our debt and inflicted pain on the most vulnerable. All of this to force a permanent, 32 percent tax increase on Illinois families.
“Moving forward, this vote shows that if the legislature is willing to pass the largest tax hike in state history with no reforms, then we must engage citizens and redouble our efforts to change the state. “
*** UPDATE 1 *** Press release…
“Today, Democrats and Republicans stood together to take a crucial step toward reaching a compromise that ends the budget crisis by passing a fully funded state budget in a bipartisan way. While none could say this was an easy decision, it was the right decision; it’s clear that a budget package that cuts billions of dollars in state spending and also provides new revenue is the only path forward. I’m grateful legislators worked together to provide for our schools, protect medical care for the frail elderly, services for survivors of domestic abuse and others in great need.
“There is more work to be done, and we will continue working with Republicans to ensure the issues still on the table are fully resolved.”
*** UPDATE 2 *** House Republican Leader Jim Durkin…
“You have all heard the following statement: ‘it’s Déjà vu all over again.’ It has never been more true than today. What transpired is a repeat of the Illinois Democrats infamous temporary tax of 2011, with the only difference being today’s tax increase is permanent - yes, permanent. These votes confirm that the Illinois Democrats will never accept change and are only interested in the status quo – the status quo that placed Illinois in this squalid condition. The fight for Illinois families, workers and employers is not over.”
Except 15 of his own members voted for the bill today, unlike the 2011 tax hike when it was a purely Democratic vote.
*** UPDATE 3 *** Mayor Emanuel…
“I want to thank the host of Democrats and Republicans who came together tonight in bipartisan fashion to put the people of Illinois ahead of political party. This bipartisan budget is a major step forward to ending three years of inaction in Springfield. This bipartisan budget will prevent Illinois’ most vulnerable from losing their safety net, keep road projects active and keep people at work, ensure schools across the state open next month, and prevent Illinois from being downgraded to junk status. And this bipartisan budget will provide much needed stability to people in every corner of Illinois and from all walks of life.”
*** UPDATE 4 *** Press release…
Illinois Republican Party Chairman Tim Schneider released the following statement after the Illinois House of Representatives passed Speaker Mike Madigan’s permanent 32% tax hike without reforms:
“Today, Springfield politicians led by Speaker Mike Madigan voted to permanently raise taxes by 32% on the hard-working families of Illinois without passing property tax relief for homeowners, job-creating reforms, or term limits on politicians.
“Make no mistake about it - this historic vote was not the product of negotiation and compromise focused on pro-growth, citizen-empowering reforms. Last night, Madigan broke away from good faith budget negotiations with the intent of pushing his own plan to protect the broken status quo. Today, Madigan then introduced his massive 1,241-page tax-and-spend plan and gave lawmakers only hours to read, debate, and vote on the package.
“This 32% permanent tax increase, the largest in Illinois’ history, was the product of insider deal-making between special interests and entrenched politicians. Next year, voters will hold those politicians accountable for choosing Madigan over the people of Illinois.
“Now more than ever, Republicans across Illinois are standing with Governor Rauner and redoubling our efforts to end Madigan’s corrupt status quo.”
I don’t see how they can keep claiming this is the largest tax hike in Illinois history. 2011’s was larger.
*** UPDATE 6 *** Press release…
Comptroller Mendoza’s Statement on Sunday’s Budget Votes in the State House of Representatives
I want to thank all the members of the Illinois House of Representatives who courageously voted to step back from the fiscal disaster of the last two years and to take back their constitutional power of appropriation. In particular I want to thank the 15 Republican profiles in courage who were true heroes today, standing up for the people of Illinois and not for a Party of One.
We still have a long road ahead to a comprehensive budget plan to pay down our $15 billion backlog of unpaid bills that has tripled in the two years since Governor Rauner took office. I am disheartened but not surprised that he, as a Party of One, has announced that he will veto the bill. I hope that all the legislators who showed true courage on Sunday’s tough votes stay strong and steadfast in overriding his irresponsible veto.
Sunday’s vote sends a strong message to the financial markets that Illinois is serious about getting its fiscal house in order. I strongly encourage Republicans and Democrats in the state Senate to likewise forge ahead working together. Our office will continue working with members of the General Assembly to help in whatever capacity we can. When we come together in a bipartisan fashion, great things are possible for the state. Let’s keep this positive momentum going.
* The House passed an amended SB 9 tax hike bill on a vote of 72-45 today. 15 Republicans voted for the proposal. [Click here for the roll call.] The bill now heads to the Senate.
Several Republicans broke with the governor today. This bill was truly the result of a movement by the rank and file.
Reps. Andersson, Bryant, Cavaletto, Davidsmeyer, Fortner, Hammond, David Harris, Hays, Jimenez, Meier, Mitchell, Phillips, Pritchard, Reis and Unes all voted for the bill. Several of those members are also members of House GOP leadership.
The bill permanently raises the income tax rate to 4.95 percent. Gov. Rauner has opposed a permanent income tax hike if it’s not tied to a permanent property tax freeze. Brian Mackey hit the highlights of the bill on Twitter today. Click here for that.
* Quite a few of the members who spoke in favor of the proposal were Republicans. “This is the sword I’m willing to die on,” said Rep. Mike Unes (R-East Peoria). “If it costs me my seat, so be it”…
“Come tomorrow morning at the opening of business, if we don’t get this done, we will be the first state in the history of the United States of America to be in junk bond status.”
Rep. David Harris (R-Arlington Heights), who didn’t vote on the amendment, said during a thunderous speech that he wasn’t elected to the House to preside over the financial destruction of Illinois.
Rep. Jeanne Ives (R-Wheaton), who voted against the bill, insisted that the state’s economy was “too weak for a tax hike”…
The only people who are going to gain from this are the public sector unions … They are the only ones who are going to gain in this tax increase, not the hard-working people who live down the street from me and our small businessmen.
Another “Yes” vote, Rep. Terri Bryant (R-Murphysboro), described herself as being on the right and said “I hate taxes, I hate them.” But, she said, “As someone who’s on the right, who’s a fiscal conservative, we can’t have vendors, mom and pop places to be asked to do services for the state… and then after they perform those services say ‘Whoops, we don’t have the money to pay them’… and allow them to go into bankruptcy.
Bryant’s voice cracked at times, said she’s probably “get primaried” for her vote, but said, ” I don’t have to own what people did before I came here, but I do have to own what’s been done the past three years.”
Rep. Greg Harris, the bill’s Chicago Democratic sponsor, listed all of the calamities the state has survived, then asked as he closed debate: “If we defeat this bill tonight, will the state of Illinois survive us?”
* The bill now moves to the Senate for concurrence. The bill received 32 votes last May, which was two more than required at the time. But it’ll need 36 tomorrow when the Senate returns.
Sens. Tom Cullerton, Hastings, Stadelman and Morrison all voted “No” in May. Sen. Haine was absent and he’s not expected to be in Springfield tomorrow because he’s very ill. No Republicans voted for the proposal when it was last in the Senate.
* This post will likely be updated with reactions from various folks. Stay tuned.
*** UPDATE *** The ominibus appropriations bill just passed 81-34…
* Sun-Times: Illinois House approves income tax increase: With the state on the cusp of a catastrophic downgrade, the Illinois House on Sunday cleared the most controversial element of a budget package, a revenue measure that hikes the income tax rate to 4.95 percent to try to end a historic impasse.
* From the Illinois Policy Institute’s news service…
House Minority Leader Jim Durkin emerged from a Republican caucus meeting Sunday afternoon and said Democrats added a new amendment to their $36.5 billion spending bill.
Late Saturday, Speaker Michael Madigan announced a vote on a tax increase package would be held Sunday. But Durkin said that Republicans couldn’t put votes behind tax increases without knowing what’s in the spending plan.
“The Democrats made matters more complicated by filing a new spending bill within the last 15 minutes,” a visibly agitated Durkin said. “We have no idea what’s in it. To take a tax increase vote before knowing what you’re spending on, to me is irresponsible. As usual, we have not been advised what is in the new spending bill, and I think our caucus feels that is a sign of bad faith.”
Durkin said he wasn’t sure if Madigan would call the tax increase bill for a vote now or not. He said he spoke to Madigan this morning to see how the day would play out. it was “pretty brief.”
“The process gets extremely complicated and I will say it’s a step back in the negotiations on the reforms and bringing the impasse to an end,” Durkin said. “I want to do this in a fair, transparent manner. Today is not the day for it.”
* I checked in with Madigan’s spokesman Steve Brown, who said the amendment “reflects the discussions that the leaders and the budget/spending groups have been holding the past few days.” There have been “daily, multiple meetings,” he said.
Brown said he didn’t think it spent more than the omnibus appropriations amendment which passed Friday, but wasn’t sure.
* The House was about to start debating the new spending proposal (an amendment to SB 6), but the Republicans requested a one-hour caucus. They’ll be back by 4:40 this afternoon.
*** UPDATE *** I just spoke with Rep. Greg Harris, who is the House Democrats’ budget negotiator.
Rep. Harris said the newly filed amendment includes things like the Tier 3 pension savings the Republicans had asked for. It also increases the cuts in higher education from the House Democrats’ 5 percent to the Republicans’ preferred 10 percent. It does spend more on some stuff, like $15 million for the Department of Corrections.
Harris insisted that everything in the new amendment is identical to what the budget negotiators had agreed to. He said he didn’t know why Leader Durkin wasn’t briefed, but that Durkin would “know that it had to be filed.”
According to Harris, the new amendment spends $36.054 billion, compared to Friday’s spending plan which spent $36.449 billion. So the new amendment, according to Harris, spends $395 million less than the one which was adopted with an overwhelming bipartisan majority a few days ago.
* A Democratic staffer pal of mine texted me: “I’ve done more mental health checks today than a DHS worker.”
I lol’d back and asked how things were going. The reply…
In its most simplistic terms, people just need to stop, breathe, and make decisions. We don’t have time to build a new spaceship; we just need to keep this one from exploding.
The Republicans control the executive branch, they can cut or eliminate whatever they want, mostly without legislative approval to do so. The fact that they haven’t is pretty strong evidence that this is just empty rhetoric.
That’s not really true. A lot of cuts require changes in statutes. And as we’ve seen time and time again during this “automatic pilot” era of state spending, judges exert immense control over what the state can and cannot do without a budget.
* But here’s something I wrote this morning for subscribers that wound up getting cut for space…
The single biggest mistake made by the governor over the past five or six weeks was pulling Senate Republican votes off the budget implementation bill that the Senate Republicans had negotiated with the Democrats.
The Democrats fell three votes shy of passing that BIMP bill on their own because it cut so much (particularly out of Medicaid) and the more liberal rank and file members wouldn’t abide passing a bill designed to attract Republican votes without actual Republican votes.
Had the governor not pulled Republican votes off that bill and it had passed, the current situation would be totally different. It would now be the three tops and the governor against Madigan on spending. Now, the spending negotiations are a purely partisan divide at the leadership level.
The bipartisan Senate bills (including the BIMP) reduced spending by $3.761 billion. When the Republicans wouldn’t/couldn’t vote for all the bills they’d negotiated, the Senate Dems passed a package of legislation that reduced spending by $3.032 billion. The Republican “Capitol Compromise” proposal would reduce spending by $4.012 billion (plus a ridiculous non-cut budgetary gimmick of $1.178 billion that I explained to subscribers several days ago).
Traditionally, the 4th of July weekend is reserved for family, fun, and festivals. But Representative Allen Skillicorn (R-Dundee) says Illinoisans have been without a budget for over 24 months, the 2017 financial year ended June 30th, and the state is on the brink of a credit downgrade.
“The politicians who haven’t done their jobs need to stay in Springfield and pass a balanced budget that avoids tax hikes. The current scheme from Speaker Madigan includes massive tax hikes and does absolutely nothing to curb spending or reign in Illinois’ deep structural problems. Illinois has been drowning from inefficient and wasteful bureaucracy, high taxes, and public corruption for the past 30 years,” said Skillicorn.
Representative Skillicorn has voluntarily waived his per diem and travel pay for the entirety of the special session. Skillicorn had planned to take part in the Crystal Lake Parade on Sunday, but instead will stay in Springfield to pass his Right Now balanced budget with no tax hikes.
Skillicorn says, “My top priority is to pass a balanced budget with reforms not unneeded tax hikes. The people deserve legislators that get the job done. I will continue working on my Right Now budget and will stay in Springfield over the weekend to be a part of the solution!”
We have been informed that we will be voting on a revenue bill today. As I have been saying for the last two years it is impossible to cut our way to a balanced budget. Additional revenue is necessary. Anyone who thinks differently is just wrong. While no one likes to pay taxes and certainly not more taxes, the reality is that sometimes it is necessary. I have done my best to communicate this to the people in the 77th district. Only with an income tax increase will we be able to care of our seniors, care for people with special needs, provide early intervention in schools, repair our aging infrastructure, fund our state universities, feed our needy, provide healthcare for lower income families and once again be proud of our state.
That raises the question: What is the real deadline for the Legislature to approve a budget and stave off further financial disaster, now that the June 30 deadline has passed and the state has entered its third consecutive year without a real budget?
The real deadline, if there is one, exists only in the minds of two people, Gov. Bruce Rauner and House Speaker Michael Madigan, who don’t want the rest of us to know what it is because it might weaken their negotiating position.
I personally would think it is 8 a.m. Wednesday, July 5, the day after the holiday, when Wall Street gets back to business.
That would seem to be the earliest the bond rating agencies would lower the boom on Illinois and throw the state into junk bond status over its incompetent governance.
The ratings agencies had threatened to reassess the state’s bond rating as early as Saturday, and there’s nothing that says they will wait, but the betting around here is that the long holiday weekend provides a little more time.
If there’s no real progress demonstrated today, all heck might break loose in New York tomorrow, even though the ratings agencies are closed. We’ll see.
The fact that state Sen. BILL BRADY, R-Bloomington, will bring a downstate voice to top General Assembly leadership is being welcomed by some of his colleagues. […]
“People from downstate bring a different perspective to the legislative process,” said Rep. TIM BUTLER, R-Springfield, whose 87th House District is part of Brady’s 44th Senate District. […]
“I’m personally not one that denigrates Cook County and the city of Chicago,” Butler said. “I try very hard not to. I think the city itself is a wonderful city. … I would like to see some of the politics of Cook County change, but obviously, Chicago is a vital part of our state.”
Rep. SARA WOJCICKI JIMENEZ, R-Leland Grove, who represents some parts of Springfield that Brady does not, said she has always looked up to Radogno and considers her courageous. But with her leaving, Jimenez said, she thinks Brady’s ascension to leadership “could be great for us here in Sangamon County.” She said he is “someone who lives not too far from us in Springfield and has a lot of the same issues and concerns that we do.”
Brady is the first truly Downstate legislative leader since Frank Watson led the Senate GOP Caucus (Tom Cross was from exurbia). Watson retired in 2009. And like Radogno before him, Brady is the only legislative leader who isn’t an attorney.
* But there’s something else to consider that a friend pointed out to me yesterday. All four legislative leaders are now white, male, financially well-off Irish-Americans.
Several Senate Democrats were holding an upbeat news conference about progress being made in talks when Madigan’s statement about the [Sunday] tax hike vote was issued. None of them knew it was coming. Just before its release, Sen. Heather Steans, D-Chicago, one of the Democrats’ budget negotiators, said, “We think we are really about nailed down now on all of the numbers for the budget and revenue side of this.”
If you missed that Madigan press release, click here.
* Sen. Toi Hutchinson looked stunned when a reporter read Madigan’s press release aloud to the gathered Senate Democrats…
State Sen. Toi Hutchinson, D-Olympia Fields, was surprised to hear the “revenue package” would be called. Hutchinson, who sponsored the Senate’s revenue bill, said it shows the “fluidity” of budget talks.
Hutchinson said recent negotiations about the revenue bill weren’t about elements in the measure but more about what Republicans wanted passed before they could declare support for an income tax hike.
“What we’re going to end up seeing when there’s final votes on this is that you will see Democrats who refuse to vote on revenue, and you’ll see some Republicans who change their minds,” Hutchinson said. “It’s going to be one of those situations where people are voting based on their districts and based on what they believe is the right course of action moving forward.”
[Madigan spokesman Steve Brown] said the “revenue package” is “the one that the Republicans endorsed.”
“It could be modeled on that,” Brown said. “There may be some changes.”
Top Republicans last month offered up a “compromise” budget plan, which included a four-year property tax freeze. While it assumed an income tax hike, Republicans never filed a revenue bill.
The “changes” reportedly include a permanent income tax hike, which the governor opposes.
The move by Madigan to call a vote without Republicans on board sets him up to collect ammunition against the opposition party, as he will be able to point to people who supported the spending plan on Friday but voted Sunday against the tax hike and accuse them of wanting to spend money without paying for it.
House Democrats who could be Republican targets in next year’s election also could vote against the tax hike in an attempt to inoculate themselves from Rauner-funded GOP attack ads.
Asked why Democrats would call the tax bill without a broader agreement with Republicans, [Rep. Lou Lang] said, “This cannot go on forever.
“There are members of Mr. Durkin’s caucus who are ready, willing and able to vote on a bill, and they want to do it right away, so we are going to oblige them,” he said.
I think members have told the Speaker that a number of Republicans are prepared to vote for the revenue bill.
* And from the Illinois Policy Institute’s Facebook page…
UPDATE: Our sources tell us there are two Illinois Republicans in the House who are confirmed “yes” votes on the $5 billion tax hike.
Rep. Sara Wojcicki Jimenez
Ph. (217) 782-xxx
xxxx@ilhousegop.org
Rep. Steven Andersson (Citizens for Steve Andersson)
Ph. (630) xxxxxxx
xxx@xxxxx
Andersson is apparently encouraging his colleagues in the House to join him in voting for Madigan’s tax hike.
Please contact both of these lawmakers and tell them to vote “NO” on the $5 billion tax hike.
The vote is expected to take place Sunday at 2 p.m.
The comments are quite something. And as subscribers know, it’s more than two Republicans.
* Rep. Andersson posted a photo of himself on Facebook last night having dinner with his wife. Check out a couple of the comments…
You are Madigan’s Toady. Switch parties traitor.
You are selling your soul to the devil. This tax increase will only drive more people out of this state. In fact we are prepared to relocate our entire family, not just my household, entire family. Hang your head low sir, you deserve it!!!!!!
*** UPDATE *** Rep. Steve Andersson responds to the Illinois Policy Institute Facebook post…
Rich,
Saw your post. FYI, there are 69 comments to the moment. A few supportive, mostly negative, some very offensive. But what’s far worse is that someone or some group has given out my personal cell phone number. Those calls and texts are about as nasty as you can imagine. Came in all night and day.
