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Illinois General Assembly Takes Steps Towards Responsible Budget

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The Illinois General Assembly recessed on their planned adjournment date of May 7, having failed to enact a state budget for fiscal year 2011. May 7 was an artificial deadline. The real deadline is May 31, after which bills may not take effect before Jan. 1, 2011 unless they pass by a 3/5 majority, which would require there to be Republican votes to pass a budget bill. May 7 may have served a useful purpose for Senate President Cullerton and House Speaker Madigan, however, since it allowed them to determine exactly where the fault lines lie and determine what they must do to get a budget enacted before the May 31 deadline.

The failure of the General Assembly to agree on a budget is a temporary victory for the Responsible Budget Coalition, since the only budgets that were on the table on May 7 were fiscally irresponsible and would have inflicted severe pain on our most vulnerable state residents. The House resoundingly rejected both proposed budgets - one that would have required massive cuts in services and the other that would have resulted in massive borrowing. Speaker Madigan did not allow a vote on the other option - raising revenue.

In the waning days of the session before the May 7 recess, the General Assembly also gave serious consideration to enacting an Emergency Budget Act. The proponents apparently believed that putting all responsibility for budget cuts on the governor would allow them to escape detection when the residents of Illinois dust for fingerprints on the elimination of services to infants and toddlers, the mentally ill, the developmentally disabled, home-bound elderly, and so on. The Emergency Budget Act would allow the governor to implement emergency rules to cut programs, make all state programs "subject to appropriation" and thus optional instead of mandatory, and establish contingency reserves that could be used to eliminate budgeted state programs. In short, the Emergency Budget Act would give the governor unilateral power to cut spending and eliminate programs as he sees fit, without legislative review.

Governor Quinn would exercise these extraordinary powers for the first six months of the fiscal year that begins on July 1. If Quinn were to lose the November election - and all the polls show him trailing -- then the power to eliminate any and all state programs would fall into the hands of Sen. Bill Brady for six months until the emergency powers expire on July 1, 2011. Brady has proposed cutting taxes by $1 billion in the face of Illinois' $13 billion revenue shortfall, a position so extreme that it's not even embraced by the radical free market Illinois Policy Institute.

So how do you close a $13 billion budget shortfall? Here's what the General Assembly was considering:

$0.6 billion (4%) -- New Revenue
$0.3 billion (2%) -- Spending Cuts
$1.2 billion (9%) -- Spend all of 17-year proceeds from tobacco settlement this year
$0.6 billion (4%) -- Other
$4.7 billion (35%) -- Borrow
$6.0 billion (45%) -- Unpaid Bills
$13.4 billion -- Total

That's right -- $4 out of every $5 used to "balance" the state budget would be either borrowed or obtained by not paying our bills.

Last week's action shows that the messages of the Responsible Budget Coalition are penetrating. There is growing momentum to find a real solution to our fiscal crisis and not simply to postpone the problem and, in the meantime, make it worse. Slowly, the conventional wisdom that revenue increases are not possible during an election year is being whittled away. The game is far from over though, and advocates for a responsible budget that raises the revenue needed to begin to dig us out of our deficit hole still face an uphill climb. Nor is there any sign that the leadership of the General Assembly is willing to seriously entertain a proposal to significantly increase state revenues. In the meantime, there will also be great pressure on the budget holdouts to end their resistance to the enactment of a bad budget. It's still all hands on deck for a responsible budget.