Illinois Republicans and Democrats alike wailed when the Democrat-controlled Legislature approved a state budget last year that was more than $1 billion out of balance. Then-gubernatorial candidate Bruce Rauner called the spending plan “phony,” while the party in power acknowledged it was “incomplete” and riddled with gimmicks.
But the state is now on course to dig itself a far greater budget hole, through either unwillingness or inability to act on the current fiscal year’s budget. One estimate puts the deficit at $5 billion, thanks to court- and statute-mandated spending already underway at levels that both sides say is unsustainable.
Lawmakers say they’re not even sure how much money is going out the door. They agree the situation is leading Illinois — already billions in debt — to rack up more. They acknowledge balancing the budget gets more difficult with each passing day. Yet, like most everything else at the state Capitol these days, they’re split along party lines as to who’s to blame and how to fix it.
The effect on residents and businesses is clear: There’ll be a “dramatic” increase in what the state will eventually have to raise in taxes, cut in spending — or both, said Laurence Msall, president of The Civic Federation, a nonpartisan research organization.
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“This is an incremental path down the road of fiscal recklessness and irresponsibility,” Msall said.
At the center of the problem is a disagreement between Rauner and Democrats over what should be included in the budget.
The former private equity investor negotiating his first state budget wants a package that includes changes to curb public-employee unions’ influence and reduce costs for businesses. He says he won’t consider a tax increase until the Legislature gives into some of those priorities. But Democrats say Rauner’s agenda will hurt the middle class, and want to raise revenue to balance the budget without severe spending cuts.
In May, Democrats approved a budget that spent almost $4 billion more than the approximately $33 billion Illinois is expected to take in this year. Rauner signed the piece of the budget that funds schools, but vetoed the rest, saying he was trying to put Illinois on the road to “fiscal sanity.”
He also deemed the one-month, stop-gap budget Democrats sent him unconstitutional because, if applied over the full fiscal year, it would lead to an unbalanced budget.
Meanwhile, dozens of consent decrees issued by federal courts kicked in, mandating Illinois continue to spend money on services like the Department of Children and Family Services and Medicaid. Plus, payments to pension funds, debt service and tax refunds also are automatically authorized by law. And Rauner and labor unions were granted a court order requiring the state to continue to pay its employees at their normal salaries; Democratic Attorney General Lisa Madigan had objected.
Ninety percent of what the state usually spends has been authorized, despite having no approved budget, an analysis by Senate Democrats concluded. They say if spending continues at this rate, Illinois is on track to spend about $38 billion this year, leading to a $5 billion deficit.
The Rauner administration didn’t dispute the numbers, but blamed House Speaker Michael Madigan and other Democrats for supporting a “failed status quo.” Rauner this week called the situation “very tragic.”
“We’re spending at levels that are unaffordable by court decree that is … racking up more debt, more liabilities, more unpaid bills, that’s raising our interest costs and our overall costs,” he said Thursday in Peoria.
Madigan says it’s Rauner who has forced the state to spend money by seeking pay for state workers and approving the schools budget. The House revenue committee will continue hearings Monday to try to determine how much the state is spending — something all involved, Rauner’s staff included, acknowledge is a mystery.
“Are we spending money at a $32 billion rate per year? Or $34 billion rate per year or a $38 billion rate per year?” asked GOP Rep. David Harris of Arlington Heights.
When and if the two sides do reach a budget deal, they will have to raise taxes, cut spending retroactively or make 12 months’ worth of changes in a condensed time period — making any action both more painful and more politically difficult.