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Tue May 27, 2014
House Democrats Reject Gov's Budget Ultimatum
Two months after Governor Pat Quinn laid out his vision for Illinois' budget, the House of Representatives has approved a state spending plan. Quinn presented two options: make 2011's temporary tax hike permanent, or make steep cuts across government. Lawmakers considered those options and chose ... neither.
Quinn has been clear about the potential consequences of letting Illinois' income tax rate drop, as it's scheduled to do at the end of the year.
During his budget address in March, he said not making the current 5 percent tax rate permanent would result in "extreme and radical cuts ... cuts that will starve our schools and result in mass teacher layoffs, larger class sizes and higher property taxes."
Less than two weeks ago, a majority of House Democrats seemed to be heeding the governor's warning. They voted in favor of Quinn's preferred spending plan. Except, no, wait a minute, not enough of them were willing to also vote in favor of the higher tax rates that would require.
Then, presented with a "doomsday" austerity budget — one that imposed Quinn's "extreme and radical cuts" — they didn't want to vote for that, either.
Which brings us to the present day, and a House budget plan that answered the governor's ultimatum with "none of the above."
"You know, I think this should not be a surprise to anyone," says Rep. John Bradley, a Democrat from Marion. "It's pretty much a flat budget from last year."
He's largely correct about the flat budget: prisons and the state police would see modest increases. State universities would be cut by a fraction of a percentage point. Schools get one of the more sizable bumps, but that's just to keep pace with what what officials have long described as inadequate funding. However there's always a catch.
"So we're trying to cobble together a budget, a responsible budget," Bradley says. "And the fiscal cliff really occurs in fiscal year '16, which begins calendar year next year."
The fiscal cliff: Illinois tax hike is set to expire halfway through the budget year. That means the coming year's one-and-a-half billion dollar budget hole will be significantly higher the following year.
On top of that, a lot of the complicated financial maneuvering that Democrats are proposing to limp through this budget cycle cannot be repeated in the future. And when you consider that Illinois is already billions of dollars behind in paying companies that provide state services, there's a way of looking at the budget that says it's not even sufficient to get through the current fiscal year.
Rep. Greg Harris is a Chicago Democrat. He says the backlog of state payments to vendors is only going to get bigger.
"People are going to continue to come in the door," he says. "People will not stop being disabled. People will not stop getting elderly simply because we don't have the ability to raise the revenue to pay for it."
He says as time goes on, Illinoisans will begin to see the consequences of not having what he says is enough tax revenue to provide the services people demand.
"Then people are going to say, 'Wow, we are really concerned because there is no one to come and bathe our grandma or help her with her shopping, and we're going to have to move her into a nursing home, and we don't want to do that.' " Harris says.
Harris also says this plan could lead to "possibly thousands" of state workers being laid off. Despite those misgivings, he and other Democrats voted for the budget. Across the aisle, Republicans, relegated to super-minority status in the House, spent most of the debate complaining about being locked out of the budget-making process.
House Minority Leader Jim Durkin's comments are representative: "Eleven o'clock this morning, another bill is dropped on us," he said during debate. "The ink is not even dry on this. How can you vote for this?"
Democrats could vote for it because, to their minds, it beat the alternatives. Because the governor asked lawmakers to choose between a permanent tax hike and drastic cuts in state programs.
They could vote for it because, rather than choosing the lesser of those two evils, creative accounting was the easiest way out.
Of course, lawmakers have gone down that road before, and often such short-term fixes have made things worse later on.
The budget bills still have to get through the Senate, and we have yet to hear what Gov. Quinn thinks of these developments.
Taken together, all this suggests the fight over taxing and spending in Illinois is far from over.