Budget speech: Will Quinn pitch cuts or taxes?

News-DemocratMarch 24, 2014 

Illinois Gov. Pat Quinn in a 2012 file photo.

ZIA NIZAMI/BND

When you're the governor of a state that's broke, you don't have many options for your annual budget speech.

You either talk about the spending cuts that will be necessary, or you talk about raising taxes. Or both.

Those are the options for Gov. Pat Quinn as he prepares to deliver his annual budget address Wednesday at the Capitol.

David Yepsen, director of the Paul Simon Public Policy Institute at Southern Illinois University Carbondale, predicts Quinn will try to delicately straddle the cuts-versus-taxes issue.

"He'll talk about some of the draconian choices that would be necessary," Yepsen said. "But I guess I would be surprised if he talks about specific revenue increases right now. He might hint at them."

The Democratic governor's blueprint for state spending takes on added significance this year because of the gubernatorial election in the fall. The Republican gubernatorial candidate, Bruce Rauner, will try to shoot holes in the plan.

Complicating the issue is the state's sad financial picture, which includes a $7 billion backlog of unpaid bills. On top of that, Senate Democrats estimate Illinois will have a $3 billion budget gap next year -- about $1.6 billion of which is because the temporary income tax increase Democrats approved in 2011 is scheduled to be rolled back in January.

Senate Democrats say that would lead to spending cuts of about 20 percent, and last week they asked the heads of state agencies to spell out the impact of that type of cuts. Their predictions were dire, such as firing 13,400 teachers and releasing 15,500 prisoners.

Yepsen said the doom-and-gloom predictions are part of Democrats' attempts at "conditioning public opinion" to the notion that such cuts aren't practical.

Yepsen said Quinn's budget address is likely to build on that theme.

"I think it will be flavored with a notion that we've got some draconian things that are going to have to happen here," Yepsen said.

As for taxes, Yepsen said: "I don't really expect much to happen on this tax issue until maybe even after the election. I think we should keep in mind that we got this tax increase during a lame-duck session, and it may be the sort of thing that doesn't happen until after this November's election."

He added: "If Quinn wins, and the Dems keep control, they can swallow hard and make part of the tax permanent. If Quinn loses, the Dems can say, 'OK, we'll pass a six-month budget and let Gov. Rauner come up with a plan.'"

Chris Mooney, a political scientist at the University of Illinois at Springfield, said Quinn is "kind of in a trick box."

Quinn could let the tax increase expire and deliver bad news to education and public safety workers. "On the other hand, if he says we should make the increase permanent, then he plays right into Bruce Rauner's hands in the fall," Mooney added.

Asking for an extension of the temporary income tax increase could be politically dangerous for Quinn. In a recent Simon Institute poll, about 60 percent of respondents said they oppose or strongly oppose making the increase permanent. The tax equals one week of a person's pay.

But there's another tax idea that appears to be more politically palatable. Last week, Democratic House Speaker Michael Madigan proposed a so-called millionaire tax, which would tack on an additional 3 percent surcharge on individual incomes above $1 million. The revenue, an estimated $1 billion, would go to public schools.

Yepsen said a new poll shows public support for the millionaire tax. And the millionaire tax would dovetail with Quinn's campaign theme of being a common man fighting for the common man, while depicting Rauner as an out-of-touch millionaire.

Rauner opposes an extension of the income tax increase.

"We don't have a tax revenue problem in Illinois primarily," Rauner told Chicago radio station WLS. "We have a spending problem primarily. We are already a fairly heavily taxed state. We are already suffering from one of the highest unemployment rates in America. And our spending on a per person basis in Illinois has risen dramatically over the years."

Quinn asked lawmakers to move his budget speech from Feb. 19 until after the primary, which Republicans deemed as political posturing so Quinn would know his primary opponent. But Quinn said he needed more time to develop a five-year spending plan.

He signed the last temporary tax increase after lawmakers approved it in the final hours of a 2011 legislative session with the idea that the approximately 67 percent increase would help fill a budget hole.

Quinn has declined to talk about the budget before his speech.

"I'll lay out with specificity, with concrete details exactly what the budget's going to be in the coming fiscal year," he told reporters Monday.

However, Senate Republicans have outlined a list of conditions that must be met before they'll sign off on a spending plan, including worker compensation reforms and a moratorium on new state programs or expansion of existing ones. They also want talk of a new tax structure off the table.

Senate Republican Leader Christine Radogno noted numerous GOP budget proposals have been "mocked" in past years.

"If they want us to work with them," she said. "There are things they're going to have to recognize and commit to."

Contact reporter Brian Brueggemann at bbrueggemann@bnd.com or 239-2511. The Associated Press contributed to this report.

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