State lawmakers pass budget, veto override pending

Springfield economy would take a hit if state workers strike
Brent Hanson
The Illinois State Capitol. Photo courtesy of Illinois CMS Division of Media Services.

Illinois may soon have a full budget for the first time in two years, thanks to a handful of Republicans who voted for two budget bills and an accompanying tax increase bill.

The Illinois General Assembly passed the trio of bills last week, and the Illinois Senate has already voted on July 4 to override Gov. Bruce Rauner's veto. A vote in the House on whether to override the veto is scheduled for Thursday.

Illinois has operated without a full budget since July 1, 2015. Legislators passed a budget that year, but Rauner vetoed it, calling it unbalanced and demanding non-budget "reforms" be tied to the passage of any spending plan. Rauner proposed his own budget, but it relied heavily on savings which may not have materialized. Meanwhile, state agencies continued spending without a budget, but many social service providers, businesses and other state contract holders didn't get paid, negatively affecting the state economy. A six-month "stopgap budget" passed last year partly alleviated the pain for some contractors, but that spending authorization expired without a new budget plan in place.

Approaching the end of the state's 2017 fiscal year on June 30, the Democrat-controlled Illinois General Assembly passed a $36 billion budget with the help of Republicans who broke with Rauner's camp. The Republicans who voted for the package, including Rep. Sara Wojcicki Jimenez, R-Leland Grove, cited the devastation caused by the two-year budget crisis.

"By passing a balanced budget we can finally begin to climb out of the enormous financial hole and prevent a further erosion of our credit rating," Wojcicki Jimenez said. "Today’s vote is not the end of our crisis but a step in the right direction. We didn’t get into this mess overnight, and we certainly won’t get out of it overnight either."

The proposed budget, which has been portrayed as balanced by proponents, would fund state agencies and programs with about $36 billion in state spending. (That doesn't include federal funds given to Illinois for a variety of purposes like Medicaid reimbursement.) The plan would cut 5 percent of spending from many state agencies. Accompanying the budget plan is a permanent income tax increase from 3.75 percent to 4.95 percent for individuals. Corporations would be taxed at 7 percent instead of the current 5.25 percent.

The trio of bills first passed the Senate in May. The House passed the bills with some Republican support on July 2, and Rauner vetoed all three bills on July 4. The governor claimed the budget was $2 billion out of balance and failed to address issues like property taxes, which he demanded be part of any budget deal.

"The package of legislation fails to address Illinois’ fiscal and economic crisis – and in fact, makes it worse in the long run," Rauner said.

Immediately after Rauner's veto, the Senate voted on July 4 to override. The House was scheduled to meet at 10 a.m. today, but it adjourned until Thursday citing a lack of quorum for a vote. That chamber is scheduled to meet at 1:30 p.m. on Thursday.

The bills are:

Senate Bill 6 - Part 1 of the budget

Senate Bill 9 - The tax increase

Senate Bill 42 - Part 2 of the budget

Correction: This story has been changed to correct the tax rates for individuals and corporations before the increase.

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