On the Budget Failure in Springfield

State Rep. Greg Harris

Commentary

By State Rep. Greg Harris
(D – 13th District)

As you know, the General Assembly did not pass a budget with sufficient revenue increases to fully fund many vital state services. As of this writing, Illinois joins California and a handful of other states not having an operating budget in place at the beginning of the new fiscal year on July 1. According the National Conference of State Legislators almost 3 dozen of our sister states were able to meet their legal obligations, through a combination of revenue increases and expenditure reductions.

Yesterday afternoon, Governor Pat Quinn vetoed one of the bills (SB1197) that makes up part of the complete state budget. SB1197 contained partial funding for distributive grants for human services such as childcare, senior services, mental health, substance abuse, etc. There were some who advocated signing the legislation and using the funds to prevent disruption in services and massive layoffs in the human service arena while continuing to negotiate for new revenue. Others believed that only by vetoing this funding and causing a crisis would some of my colleagues be forced to realize how important new sources of revenue are to serve our most frail and vulnerable.

Interestingly, the Governor did not act on the bills making up the rest of the budget such as Medicaid, elementary and secondary education, higher education, programs funded from other than GRF sources, state employees payrolls, etc. It remains to be seen whether he signs those into law and allows all of government (with the exception of the human services in SB1197) to function relatively normally, or vetoes one or more of those bills as well.

The House and Senate leaders have called us back on July 14 to deal with Governor’s vetoes, and “….any legislation, pending or otherwise, related in any way to the budget for Fiscal Year 2010, including but not limited to appropriation, budget implementation, or additional revenue resources.” Given the catastrophic effect on people’s lives that this uncertainty has, I had hope we would have returned sooner and stayed until a satisfactory resolution could be achieved.

However, there is also the school of thought that House and Senate members need to be home in their districts for a period of time to hear and see first-hand how devastating this budget situation is to the families they serve. I hope my colleagues are hearing from as many people as I am who are frightened, angry and desperate for our help.

On the final day of the last fiscal year, June 30, the Governor addressed a joint session of the House and Senate and offered $1 billion in budget cuts and called for passage of his revenue package. Again, there was not a lot of certainty as to what specifically what was to be included in those cuts and how they would affect different programs/districts. Here is a listing of the proposed cuts suggested by the Governor:

State Operations (includes layoffs,12 furlough days) $185 million
Medicaid and Health Insurance $140 million
Grants $250 million
Education $175 million
Corrections $125 million
Additional Reserves $100 million
Other State offices, departments and agencies not under the Governor $25 million

Here were other items from the Governor’s Office to address the budget shortfall:

Incorporates restructuring of debt and fund sweeps

  1. Long-term debt restructuring
  2. Pension Obligation Notes
  3. Fund sweeps

You will note that item #2 is “Pension Obligation Notes”. The issuance of these notes would have provided another $2.23 billion in funds to assist human service agencies. By the end of the day on June 30, the Governor’s staff worked with the Senate to kill the Pension Notes, which were part of their own plan.

This uncertainty and constant shifting of positions has not made a difficult situation any easier. At this point, many of us who support additional revenues continue to try to work with our colleagues, the Governor’s staff and interested parties to analyze a menu of possible ingredients to a long-term solution tour problems. These ingredients include:

  • Across the board budget cuts
  • Pension reform
  • Medicaid reform
  • Temporary income tax increase
  • HB174-type plan (formerly known as SB750 or the “tax swap”)
  • Pension Obligation Notes
  • Full funding of programs for federal match
  • Debt management
  • Other targeted revenues (e.g. cigarette taxes to offset Medicaid liability)
  • We also must consider the repayment of the state’s FY09 emergency borrowing and expiration of the ARRA funds in FY10

Where this will end remains unclear. When it will end is unclear. If you have other suggestions or ideas, please let me know at [email protected]

Via Facebook, with permission.