A look at Illinois’ historic budget impasse, deal to end it
CHICAGO – Illinois’s historic budget deadlock ended Thursday when lawmakers voted to override the Republican governor’s veto and give the state its first spending plan in more than two years. But there was little joy.
While some crises can be avoided, taxes raised and some areas will see cuts in government spending under the new plan. Republican governor Bruce Rauner and the Democrats who control the Legislature remain largely divided. And Illinois’s finances are much worse than when stagnation began in 2015.
Rauner, a former businessman, won the election in 2014 with the promise of doing more business in Illinois, reducing union influence and changing politics as usual.
Earlier, when his takeover, a temporary increase in income tax for four years allowed him to pay up to 7 billion in additional income per year was allowed to expire. Revenue is far exceeded and red ink began to accumulate.
The new governor has called for changes before signing another tax increase to balance the budget. Democrats objected, saying their program would affect ordinary middle-class residents and elders.
Illinois has accumulated more than $ 15 billion in overdue accounts to providers, such as social service agencies that deal with people with disabilities.
Shelter fighting domestic violence and the homeless were forced to close and universities have laid off thousands of employees.
As Illinois approaches July 1 – the start of the third fiscal year without a budget – pressure has increased. Rating agencies have warned against Illinois, which could become the first state in the United States to be reduced to “waste”, which would mean paying more to get loans.
When the new fiscal year began, many highway construction projects have stopped, putting thousands of employees out of work. The same week, the Illinois lottery stopped selling Powerball tickets.
In almost two dozen states, the fact of not approving a budget results in a closure of the government. Other states have consequences for deterring final spending plans, such as non-issuance of legislators’ salaries.
Illinois has no such laws. Instead, the government continued to spend billions of dollars a year because of laws and court orders that require certain items are still paid. Lawmakers also passed several “down-borrowing” bills to fund areas such as K-12 education.
While people who rely on the government for help have felt the pain, stagnation was barely perceptible to others. Some 63,000 state workers received paychecks, and schools and government offices remained open.
House Democrats introduced a new plan in late June, which incorporates parts of a deal approved by the Democrats in the Senate and another proposed by the Republicans.
Fifteen members of the Republican Party in the House and Senate have left Rauner and supported, helping the Democrats to send him to the governor’s office. Many lawmakers who broke ranks represent districts where universities and social service agencies have suffered.
Rauner vetoed the plan, calling it a “disaster” that does nothing to fix Illinois.
On Tuesday, the Illinois Senate voted to cancel the veto; The house did the same Thursday.
The plan envisions 36 billion to spend about $ 3 billion that Illinois has sent no budget.
This means that it is not good news and good news. Universities and providers who have not received any money for stagnation and have waited months to pay will soon have more reliable funding flow.
However, many will be funded at a lower level than they were the last time they had a full state Illinois budget.
Higher education, for example, will receive 5 percent less compared to the fiscal year that ended in the middle of 2015. State agencies also see a reduction of about 5%.
The plan is funded by an income tax increase of $ 5 billion. This increases the individual income tax from 3.75% to 4.95%.
This figure is slightly lower than the 5 percent tax rate that Illinois took from 2011 to 2014. How much it will cost individual households can vary considerably.