Rauner's Budget Robs Peter To Pay Paul

By aaroncynic in News on Mar 5, 2015 7:30PM

Illinois' cash strapped budget is certainly a problem. Although Bruce Rauner promised to shake up Springfield when he was elected, his only plan for addressing the crisis so far is shaking poor people by their legs and seeing what change falls out of their pockets.

Outside of taking a large axe to Medicaid, Rauner's plan to shore up the state's $6 billion budget hole involves running many smaller blades through already cash-strapped programs. Last week, the governor proposed to fill part of the budget hole with $265 million from the state's contribution to the Low-Income Home Energy Assistance Program (LIHEAP), a mostly federally-funded program to help low income families keep current with their heating bills and avoid shutoffs during winter.

While a spokesperson for Rauner told Crain's it was essentially no big deal, others decried the idea. Calling the move a “game of budgetary chicken,” Bob Gallo, state director at AARP Illinois said “letting poor people freeze is not an acceptable solution to saving money.”

Rauner is also taking heat for his proposal to shake down suburban municipalities by withholding half of their share of state income tax revenue. This could leave some towns in danger of using up a big portion of their reserves, potentially forcing service cuts or a raise in taxes down the road. An analysis by the Daily Herald shows on average, the 90 suburbs studied would use up a quarter of the reserves to cover the loss of income tax revenue in the first year. At least eight would fall below the recommended minimum.

Rauner's office has been mum on whether or not the cuts would be permanent, which is the larger issue at hand. While some municipalities have larger reserves, others have below the bare minimum, which makes weathering another lengthy fiscal storm difficult. Lori Lyons, Finance Director for the town of Hampshire, Illinois told the Daily Herald:

“The Great Recession took a heavy toll. Reserves were tapped into to maintain core village services such as police protection and public works. It goes without saying, but Gov. Rauner's plan to withhold half of the municipal share of income tax revenues, if enacted, will have significant impact."

Meanwhile, state Democrats introduced a plan of their own they say could shore up $580 million in funding. The plan would move money sitting idle in state funds earmarked for various special purposes to close the $300 million shortfall in funding for the Child Care Assistance Program, along with overtime owed to prison guards and services for people with developmental disabilities. In a press release, state Sen. Heather Steans said:

“Our solution to the shortfall involves no borrowing and no new revenues, and it is imperative that we move forward immediately to resolve this short-term crisis, which has already shut down child care centers and left working parents without options."

State Republicans were unhappy with the idea, accusing Democrats of “playing politics” and being short-sighted because the proposal doesn't give Rauner the executive authority he claims to need to fix the budget crisis. Rauner spokesperson Mike Schrimpf, said “This is the exact type of short-term thinking that created this mess, and it does not even solve the major crises that will occur at the end of this month.”

While it is a short term solution at best and Illinois desperately needs to come up with long term fiscal solutions, carte blanche executive authority to simply slash and burn what little is left in our budget to help those struggling the hardest is probably one of the worst moves legislators could make.