Mt. Vernon Register-News

June 15, 2009

Latest Ill. budget impass raises new questions

SPRINGFIELD, Ill. (AP) — Two weeks after the spring legislative session ended, Illinois still doesn’t have a new state budget, and it doesn’t look like it will have one anytime soon. Gov. Pat Quinn and legislative leaders are struggling to find some consensus on dealing with a record-breaking budget deficit.

Their decisions will affect tax rates for millions of Illinoisans, aid to the sick and needy, and a broad array of government services across the state.

Here’s a look at where things stand:

Q: How bad is the state’s financial situation?

A: Worse than ever. The combined budget deficit for this year and the next is at least $11.6 billion. Federal money and proposed spending cuts will fill that hole a bit, but state officials still face a gap of roughly $7 billion.

Q: Didn’t the Legislature pass a budget?

A: Sort of. They approved a level of spending that doesn’t come close to covering state government’s expenses, but they haven’t technically sent the budget to Quinn’s desk. That budget doesn’t specify where to make the enormous cuts that would be necessary to balance state expenses and income. That problem would simply be dumped in Quinn’s lap.

Q: So what’s happening now?

A: Rank-and-file lawmakers have been sent home. Quinn and legislative leaders are meeting about once a week in Chicago to discuss the situation. There have been no signs of significant progress.

Q: What are lawmakers’ options?

A: They could agree on some mix of tax increases and spending cuts. They could stick with the budget that legislators approved and let Quinn figure out where to make cuts. Or they could use that budget as a placeholder and pass a new version when they convene in six months.

Q: What would be the advantage of waiting?

A: Lawmakers wouldn’t have to decide on tax hikes until after the November filing deadline for legislative races, shielding them from potential challenges in the primary election. Also, passing a budget in January would require only a simple majority, instead of the three-fifths majority it now needs.

Q: Is there a disadvantage?

A: It would force state agencies to decide whether to keep spending as if they’ve got a full year’s budget or act as if they’ll only get six months’ worth of funding and begin slashing assistance programs and services.

Q: Is there a deadline to reach a decision?

A: The current budget expires June 30. Without a new budget after that, government would have very limited authority to spend money and would soon have to start cutting services.

Q: So where do they disagree?

A: The governor and legislative leaders haven’t offered many details about what they’re seeking. But in general, Quinn wants to raise taxes and is reluctant to cut services more than absolutely necessary. Republican leaders see the shortfall as an opportunity to make deep cuts and launch long-term reforms that they favor. Democratic leaders say they support a tax increase, but many party members don’t, at least not until more cost-cutting takes place.

Q: Are they getting anywhere?

A: They haven’t reached a consensus on whether the budget problem must be resolved by July 1, but they have agreed to set up commissions on job creation and implementing cost-cutting proposals. These steps aren’t major, but they indicate an effort to show the public that officials will do more than just raise taxes.

Q: Why are state finances in such poor shape?

A: The state is bringing in less money. Revenues aren’t simply lower than expected, they’re lower than previous years by billions of dollars, an extremely rare situation. At the same time, expenses are climbing. That’s because of a mix of increasing costs for health care and employee benefits, new spending approved by legislators and former Gov. Rod Blagojevich, and state law requiring a much larger contribution to government pensions.

Q: Could lawmakers balance the budget by cutting government waste?

A: There’s not enough waste to come anywhere close to filling the deficit. Illinois officials control about $28 billion. (There’s billions more in federal money that flows through state government, but that’s essentially off-limits.) With a hole of roughly $7 billion left to fill, officials would have to slash one dollar in every four — money that pays for schools, prisons, parks, Medicaid and more.

Some of that money may be misspent but not 25 percent of it.

Q: What would happen if all $7 billion had to be cut from the budget?

A: It would depend on how Quinn implements the cuts, what limits lawmakers place on him and to what degree federal regulations prevent certain cuts. For instance, if lawmakers insist on protecting education and federal rules prevent Medicaid cuts — the two biggest chunks of the state budget — then the deeper cuts would be needed in other areas, such as mental health programs, state police and prisons.

Q: Didn’t Illinois go through a budget impasse last year?

A: Yes, and the year before that, too. As the state’s budget problems grow each year, officials find it harder to work together and choose from the unpleasant options available to them.