Tuesday, May 25, 2010

House passes a budget

By Jamey Dunn and Rachel Wells

Legislators voted tonight to borrow billions to the make the pension payment for next fiscal year and to give Gov. Pat Quinn “emergency powers” to shift funds and cut the budget.

A group of House Democrats presented the budget ideas they came up with while the General Assembly was out of session for two weeks. But by the end of the day, the plan that passed out of the House was similar to the one that emerged earlier this month.

Earlier in the day, Democrats voted down or withdrew proposal after proposal, including $300 million in cuts to K-12 education, $100 million in higher education cuts and a plan to make state retirees pay health care premiums, which would have saved an estimated $100 million.

The largest and most contested component of the budget, $4.09 billion in borrowing to make the pension payment, narrowly passed this evening. It failed by one vote the first time it was called today. After some arm twisting by Democratic leadership and Quinn, Lynwood Democratic Rep. David Miller, one of two members in opposition from his party, changed his vote.

Elmhurst Rep. Robert Biggins, one of only two Republicans to vote against his party, said he decided to support pension borrowing, House Bill 859, after speaking with the governor’s office while the rest of the House minority party met in private. “I thought about all the people in Illinois. This is the responsible thing to do,” said Biggins, who had voted against borrowing earlier in the evening. “This is a much less expensive way to go.” Biggins, about to retire from the General Assembly, said he did not ask the governor for anything, nor was he offered a job in return for his support. Danville Rep. Bill Black, another Republican who is retiring after the current session, voted consistently in favor of borrowing.

Other Republicans who had agreed to borrow for last year's payment after being promised cuts they say never materialized did not support a similar plan this year because they said Democrats haven’t done enough to trim the budget and encourage job creation.

“[Republicans] participated in that process to help [Quinn,] in his first term, try to address some issues,” Minority Leader Tom Cross said. “Many would say it was a mistake. … We get, this year, the downside of not making a payment, and we are not saying, ‘Don’t make a payment.’ We’re saying we want to fundamentally change the way we run government in Illinois,” However, House Majority Leader Barbara Flynn Currie of Chicago, the sponsor of the plan, said members on both sides of the aisle do not have the will to make cuts that would add up to the money needed for the payment. “You need 60 people to vote ‘yes’ to pass cuts of this magnitude, and [those people] are not in this chamber,” she said.

The House also passed its version of the “Emergency Budget Act,” introduced earlier in the month, with some new cost-saving measures tacked on. Senate Bill 3660 would:

  • Extend the time the state has to pay any overdue FY2010 bills from August 31, 2010, to December 31, 2010.
  • Require lawmakers, constitutional officers and executive agency directors to take 12 furlough days.
  • Create an independent state agency called the Railsplitter Tobacco Authority. The state would transfer its future payments from a national tobacco settlement to the agency, which would issue $1.7 billion in bonding, with the settlement money pledged to pay off the borrowing.
  • Allow the governor to borrow from special funds for the General Revenue Fund and Common School Fund. That money would have to be put back into the special funds 18 months after it was borrowed.

The new cuts in the bill would:
  • Require state agencies to review contracts for opportunities to renegotiate, terminate or re-bid. House Democrats estimate that could save $300 million.
  • Eliminate cost of living increases for legislators, state’s attorneys, constitutional officers and some state agency employees and members of boards of commissions for FY 2011.
  • Reduce the per diem payments legislators get on session days from $139 to $111 and reimbursement for car travel from 50 cents a mile to 39 cents a mile.

A “tax amnesty” bill the House passed today would bring in an additional estimated $250 million.

SB 377 would allow anyone owing past due taxes between 2002 and 2009 to pay them during a tax amnesty period without penalties and interest. State agencies would also be allowed to enter into deferred payment agreements, settle debts at no less than 80 percent of the amount due and use private debt collection agencies to obtain owed money. Anyone who fails to take advantage of the tax amnesty period, from October into November 2010, would be charged double the penalties.

The House passed the Senate’s spending bill, HB859, which would cut 5 percent from agency operating budgets. Other than those cuts, the measure appropriates lump sums equal to last year’s spending to Quinn, giving him the power to cut where he sees fit.

Currie said that the education funding in the bill hinges on the House passing a $1-a-pack cigarette tax increase that the Senate approved last session. If not, she says at least $327 million in cuts to K-12 would be the alternative. The proposal lacked the needed votes in the House earlier this month.

The Senate is back in session tomorrow, and House members plan to be in at least through Thursday. The House passed the basic structure of a budget today, but changes could still be in the works. Check back for updates.

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