The Chicagoist will be launching later but in the meantime please enjoy our archives.

Lack Of State Budget Is A 'Spectacular Failure,' Says Civic Federation

By aaroncynic in News on May 9, 2017 5:59PM

With the Illinois budget impasse approaching it’s *third* year, the Civic Federation released a scathing analysis calling the lack of a comprehensive budget for the state a “stunning failure.”

“Operating Illinois on autopilot is not a solution, nor is it sustainable. Rather, it represents an abdication of the most basic constitutional responsibilities of proposing and passing a balanced budget,” said Civic Federation President Laurence Msall in a press release.

The fiscal watchdog organization hefted blame on both Gov. Bruce Rauner and the General Assembly, saying it opposes both Rauner’s proposed budget and partial-year stopgap or other piecemeal appropriations solutions.

“Cherry-picking certain areas of government to fund while pledging to work toward a complete budget sometime in the abstract future has not and will not end the crisis and in fact is making it worse,” said Msall.

Attempts by lawmakers to come to a compromise or alleged ‘grand bargain’ with the governor—who has still been pushing pieces of his ‘Turnaround Agenda’ at the expense of passing a fully-funded budget—have mostly fallen flat, with each party laying the blame on the other. In the meantime, the impasse has severely harmed and even crippled social service agencies that rely on state funding and other entities that do business with it.

The Federation also said it would not support the budget Rauner proposed in February.

“To close the deficit of $4.6 billion, it relies on uncertain savings, one-time revenues and a bipartisan agreement in the Illinois Senate, the provisions of which are in flux and likelihood of passage is unclear,” said the organization.

Among things the Federation said it “cannot support” or is “concerned” about:

  • The $4.6 billion operating deficit and lack of a detailed plan to close the gap between revenues and expenditures.
  • Allowing the state’s backlog of unpaid bills to increase to $15.2 billion, which could balloon to $19.7 billion if the operating deficit isn’t closed.
  • Rauner’s plan to cut General Funds contributions to pensions by $1.25 billion.
  • Enacting appropriations that aren’t “part of a comprehensive and balanced budget, including partial-year stopgaps and K-12-only appropriations.”
  • Relying on the one-time sale of the Thompson Center, which may not materialize in FY2018, to shore up resources.
  • A plan to save $120 million on the state’s Community Care Program by creating a new program, which might not provide adequate services.

The group recommends passing a comprehensive budget that fully funds state government with a mixture of spending caps, borrowing, and increased revenues. Among them including limiting the state’s expenditure growth to 1.7 percent until “the State’s financial condition can be substantially improved,” bumping the state’s individual income tax rate back up to 5.25 percent with an expansion in the Earned Income Tax Credit by 50 percent to balance the hike for low-income taxpayers, and increasing the corporate tax rate to 7 percent.

As part of longer-term solutions, the Federation recommends amending the state Constitution to allow for a graduated or progressive income tax, where people with higher incomes would be taxed at higher rates and those with lower incomes would be taxed at lower rates, and an amendment to specify the pension protection clause applies only to accrued benefits.

In a statement emailed to Chicagoist, a spokesperson for the governor’s office said that many years of fiscal mismanagement is how Illinois ended up in the crisis:

“Decades of fiscal mismanagement are the reason why our state finds itself in this crisis today. Governor Rauner continues to urge legislators to pass a truly balanced budget with structural reforms that will create jobs and grow our economy across Illinois.”

Others however, blamed the governor for the dire state of fiscal affairs in Illinois. "To borrow a phrase from the Civic Federation, Gov. Rauner has been a 'spectacular failure' in office,” said Illinois Working Together. “Instead simply doing his job and proposing a balanced budget, the governor would rather play big money political games in an attempt to ram through his partisan agenda. Gov. Rauner should listen to the countless Illinoisans who are being hurt by his wrong priorities, drop his agenda, and do his job."

Gubernatorial candidate and billionaire JB Pritzker also slammed Rauner. "Illinois needs a leader who can bring people together to put an end to this budget crisis,” Pritzker said in a statement published by Capitol Fax. “While Bruce Rauner has decided to hold the state hostage for his teardown agenda, millions are suffering the consequences and future generations will inherit the mess he’s created."

The Grassroots Collaborative, which has long advocated for a host of progressive revenue solutions including a graduated income tax, a Lasalle Street Tax, closing corporate tax loopholes, and a bill currently in the House (HB3393) that would close the carried interest loophole,

“The Civic Federation report correctly dispels Governor Rauner’s dangerous budget fantasy and outlines the harm being inflicted on Illinois residents," said Executive Director Amisha Patel. "However, we can not borrow our way to financial stability. To repair the damage that has been done and to transform Illinois into a state that all our families want to live in requires renewed investment in the people of our state and new progressive revenue to fund that investment."
Read the full report here.