Despite tentative optimism heading into the weekend before the scheduled May 31 legislative adjournment that a compromise could be reached on a balanced state budget and economy-boosting, job-creating structural reforms, Democrat leaders continued to slow-walk the process, stymying progress and leading the General Assembly to once again leave Springfield in May without an agreement.
Republicans worked diligently to find an agreement on a balanced budget with reforms. Legislative “working groups” met for months in an attempt to forge common ground on needed reform issues, as well as potential revenue sources. However, according to Democrat leaders those efforts failed to produce suitable fodder for a final compromise before May 31.
Though there was plenty of time to compromise and agree on a truly balanced budget alongside meaningful reforms to grow the economy, May 31 came without an agreement on a “grand compromise.”
Democrats’ Refuse Last-Minute Compromise
While lawmakers from both parties, in both chambers seemed to be negotiating in good faith, the Speaker remained staunchly opposed to the Governor and Republican leaders’ calls for reform. In fact, Madigan publicly advocated for the legislature to work in a continuous session.
Republican lawmakers and the Governor remained dedicated to Illinois’ taxpayers, repeatedly stating that structural reforms must be included as part of any final compromise.
While Republican legislators hoped that rank and file Democrats would stand with them and make compromise a reality—passing a balanced budget alongside reform—Democrat lawmakers instead chose to embrace the status quo.
Unfortunately, politics took the front seat to policy in Illinois, when Democrats refused to not only come together on a balanced budget alongside reforms for FY 2017, but also refused to consider the May 31 passage of a bridge appropriations proposal offered by Republicans that would have funded schools and kept government operating while lawmakers from both parties, in both chambers continued to work on reforms and a long-term solution.
Pointing to the budget rushed through the process by House Democrats in late May, Republicans noted that their counterparts aren’t strangers to acting very quickly. It is an outrage that Democrats refused to act on a bridge budget before midnight on May 31 to bring certainty and stability to schools, service providers and they people of Illinois.
Republicans underscored the will not approve any revenue enhancements without structural reforms. Pointing to the Democrats’ 2011 tax increase—after which Illinois still had a multi-billion dollar bill backlog, the state’s credit ratings were reduced to the lowest in the country and unfunded pension liabilities skyrocketed—Republicans say a tax increase alone won’t solve the state’s problems.
The last time the General Assembly passed a budget that was signed into law (although not a balanced one) was May 15, 2014, over two years ago.
Rauner’s Bridge Budget
After it became abundantly clear that Democrats had no intention of passing a balanced budget—or reforms—prior to the November election, Governor Rauner offered a six month stopgap budget in the hopes a larger budget plan could be worked out with Democrats.
Absent a comprehensive package, Republicans stressed that progressing into Fiscal Year 2017 with no appropriations would not be an acceptable alternative. Schools must open in the fall, vendor and grantee patience has understandably worn thin and the continued delivery of critical life, health and safety state services would be in jeopardy.
As an option of last resort, the Governor and Republican lawmakers urged passage of a standalone appropriations bill for PK-12 education (SB 3434), as well as passage of a fiscally responsible six month appropriations bill (SB 3435). The Governor also indicated he will sign Senate Bill 2038, which is pending on his desk and includes Fiscal Year 2016 appropriations for human services payments not covered by court orders.
The proposal was not designed as a full-year budget, but rather a six month bridge plan that would allow schools to open, keep the lights on, protect public safety and prevent a government shutdown. The Republicans’ bridge budget was fully funded, and therefore fiscally responsible, unlike other potential short-term budget proposals that seek to impose piecemeal, out-of-balance budgets for months at a time.
Specifically the Short Term Bridge Budget for Fiscal Year 2016 (Appropriates $25.9 billion in GRF):
Would include funding for homeless programs, domestic violence prevention programs, sexual assault programs, state parks and the senior citizens real estate tax deferral program.
Would utilize the balance in the “Rainy Day Fund” to pay outstanding bills at various agencies from Fiscal Year 2016, including funds for utilities, food and medical services at state prisons, mental health centers and veterans homes.
The state could also make payments to the many municipal utilities that are owed money, and postage needed at agencies to complete various necessary duties.
Would appropriate $458 million from the Commitment to Human Services Fund to provide payments to human service providers who are not covered by court orders or consent decrees.
Specifically the Short Term Bridge Budget for Fiscal Year 2017 (Appropriates $49.4 billion - $7.8 billion GRF - $33.2 billion Other State - $8.4 billion Federa):
Includes a standalone bill (SB 3434) for education to provide local schools with certainty of a full year of funding and ensure that all PK-12 schools open on time this fall. The bill includes full funding of General State Aid ($4.8 billion) *NO PRORATION*, and includes an additional $105 million to “hold harmless” schools that would have received less money in Fiscal Year 2017, than they received in Fiscal Year 2016. Also includes a $75 million increase for Early Childhood Education.
Appropriates all federal funds, which has no impact on the General Revenue Fund, but will allow federal funds to flow directly through to providers, such as child care providers.
Appropriates non-GRF line items, such as: capital projects halted in mid-construction due to the lack of appropriation authority in FY 2016; emergency repairs at state facilities; a road construction program in FY 2017, such as bridge repairs and local government road allocations; the low income heating and energy assistance program; debt service payments related to Met Pier bonds, Civic Center bonds and Sports Facilities Authority bonds; and ensures food delivery and utility services at state veterans homes.
Appropriates $600 million from the Education Assistance Fund for Higher Education (amount expected to accrue to the EAF during the first six months of FY 2017). This will provide stop-gap funding for public universities and community colleges, and the Illinois Math and Science Academy. It will also ensure those universities at most risk can open for and complete the fall semester, including Chicago State, EIU and WIU. (No MAP grant funding)
Appropriates $180 million from the Commitment to Human Services Fund for payments to human services providers that are not covered by court orders or consent decrees. (This is the amount expected to automatically accrue into this fund in the first six months of FY 2017).
Makes GRF appropriations of $450 million fully funded by non-repayment of interfund borrowing to ensure: food vendors will get paid to deliver to 24 hour residential facilities, including state prisons, DD and MH facilities; utilities and medical services continue to be provided at these same facilities; fuel is available for troopers and maintenance vehicles; child support payments can be provided statewide; purchase of cigarette tax stamps so that IL can continue to collect cigarette tax revenues.
Human Services Funding (Senate Bill 2038):
This is a stopgap funding proposal of $714 million to help struggling human service providers keep their doors open. This includes Fiscal Year 2016 appropriations for human services that were not covered by court order. Sent to the Governor
The measure relies on $456.8 million from the Commitment to Human Services Fund, a special fund that collected a percentage of revenue from the 2010 income tax hike. The remaining balance comes from several other miscellaneous state funds.
Several Republican lawmakers raised questions as to why no money was included in the bill for essential operations at the state’s human service facilities; these would include utilities, maintenance, food, etc. There were also concerns raised that language in the bill could potentially hold up some of the intended spending.