Wednesday, May 05, 2010

Budget off to a rocky start

The broad strokes

By Jamey Dunn

House Democrats appear to be crafting a budget without a tax increase, without borrowing to make the annual pension payment and without Republican support.

In a House committee this morning, Majority Leader Barbara Flynn Currie, a Chicago Democrat, laid out some possible pieces of the budget. The committee approved an amnesty plan for delinquent taxpayers that Currie said could bring in about $250 million.

She later voiced support for a $1-a-pack cigarette tax increase that passed in the Senate last session. Currie estimated it would bring in about $320 million. A plan to “securitize” the state’s chunk of the national tobacco settlement would bring in more than $1 billion for next fiscal year.

“All of these things are part of a final budget mix, and we’ll see where we go,” Currie said.

But by far the biggest component was a plan to borrow almost $4 billion to make the pension payment. It passed in the committee along partisan lines.

On the House floor, the borrowing amendment, which is similar to the tactic the state employed to make the pension payment last fiscal year, was called for a vote to add it to existing legislation, and it received the simple majority it needed. However, the full bill will require a three-fifths vote to pass on to the Senate.

With Wednesday's vote, the Democrats were testing the waters for pension borrowing, and the response was a resounding “no.” There wasn’t even unanimous support on their side of the aisle. Of course, the bill can always be called for another vote later, and time will tell if Democrats can find the 10 or so votes they would need for it to garner the three-fifths majority.

“It’s the same old thing. We’re just continuing to look at a budget as an instrument of debt rather than a balanced instrument that’s supposed to have real revenue for the expenses,” said Rep. Roger Eddy, a Hutsonville Republican.

Eddy added, “I think unless and until there is a real commitment to talk about some of the reforms that we feel are necessary for a responsible approach to budgeting, nobody’s really interested in borrowing more as the answer. ... When you think about the cost that has been piled onto the pension system in the last seven or eight years with various schemes and payments not being made, we’re paying hundreds of millions of dollars in interest.”

Currie said that while cuts may be necessary, Republicans couldn’t produce a list of $4 billion in cuts that would be politically tolerable or sustainable for the state.

After the committee meeting this morning, she had hinted that the borrowing might not find the support it needed. Currie said that without borrowing, “we’re going to have to scuttle about and figure out what our other options might be.”

Gov. Pat Quinn’s budget director David Vaught said of the pension bonds this morning, “This bill is about cash—we don’t have any, so we’d like to use bonds, issue bonds and sell some bonds, to pay the pension funds.”

If pension borrowing cannot pass in the House, it begs the questions: Where will the “cash” come from? Or will it come at all?

State Police Funding

By Rachel Wells

Illinois State Police may get their funding, but local governments won’t be happy about it.

The Illinois Senate approved a measure today that would provide an estimated $22 million to the state law enforcement agency, which under proposed cuts would otherwise lay off about 460 sworn officers and close five regional offices.

Some of that funding will come from additional $1 to $15 fines imposed during court proceedings, but others would apply to mail-in bonds, such as those associated with some speeding tickets, that by Supreme Court ruling cannot be raised above $75. In those cases, counties and municipalities would have to share the $75 fee with the Illinois State Police, shrinking local government’s cut.

Lawmakers aren’t sure how much Senate Bill 3695 would take from local governments statewide, but Kip Kolkmeier of Metro Counties said Lake County government had estimated annual losses at about $160,000, with municipalities in Lake County losing about $180,000.

“I’m not trying to diminish that, that just doesn’t seem like a whole lot at risk compared to the employment of 460 officers and us losing five of our regional offices to protect us,” says Senate sponsor Kimberly Lightford, a Maywood Democrat.

“If the state police are to lay off 464 officers and close five districts, the director has already testified in committee that we will become a reactive agency and no longer be proactive out writing citations,” said State Police Capt. Tim Becker. “In 2009, our 540,000 citations generated $16 million for the counties. That’s $16 million they will not be getting if we’re not out writing tickets.”

Opponents voiced concerns that the money could be swept into the general revenue fund and may not go toward state police funding in the end

“[It’s] going to take a big slice out of municipal and county law enforcement officials’ money. So in the end, we’re robbing Peter to pay Paul,” said Rep. Dale Righter, a Mattoon Republican.

The measure, already approved by the House, now heads to the governor.


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