Within hours of making the proposals public, the Illinois state Senate passed a $38.5 billion budget Wednesday night detailed in two bills with a combined 2,000 pages.
Despite saying the proposed budget that Illinois state lawmakers are set to pass by the end of the day Thursday is balanced, expect to see more supplemental appropriations in the coming fiscal year.
The Senate passed the $38.5 billion spending plan for the fiscal year that starts July 1. The proposal contains more than $1 billion above the current year’s budget that, alongside a $5 billion income tax increase, lawmakers passed last summer over Gov Bruce Rauner’s vetoes.
The proposed budget includes more than $400 million more for primary and early childhood education and 2 percent more for higher education.
It includes 5 percent reductions in money for local governments, which is less than the 10 percent reduction from the Local Government Distributive Fund in the current budget.
The measure also restores funding for social service programs that Gov. Bruce Rauner either eliminated or reduced, such as Teen Reach, Redeploy Illinois, autism programs, addiction treatment and prevention services and community health services.
The proposed budget includes more than $60 million in back pay for state employees that dates to 2011. The spending bill doesn’t include money for step increases, the court-ordered yearly raises the state owes public employees from the past four years. Budget leaders said the revenue and spending in the 1,245-page budget bill match up.
State Sen. Andy Manar, a Democrat from Bunker Hill who served as a budgeteer, said the budget was balanced despite not including the court-ordered pay increases. He said the process of figuring out exactly how much is owed hasn’t been completed. “Without question, there is gonna have to be a supplemental appropriation bill in [fiscal year 2019] to address the issue,” Manar said. “It’s money that we owe. We’re going to have to pay it.”
Rauner stopped the automatic compounding pay hikes known as step increases for around 14,000 members of the American Federation of State, County and Municipal Employees Council 31 in 2015. The governor said lawmakers never appropriated the money. A court order is due later this year that could make all that due at once.
Records obtained by the Illinois News Network via a Freedom of Information Act request show Rauner’s office estimates it will cost $412 million for just the four years of higher pay if the state is forced to pay all of the past years’ frozen step increases in the fiscal 2019 budget.
Manar said he expects more revenue than what’s estimated to ultimately come in for the coming fiscal year. “And as long as the governor’s office holds the line on spending, we’re not going to have a problem,” he said.
State Sen. Dale Righter agreed that the budget was balanced, but said just how balanced would depend on how the money was spent.
“Assuming that state government manages that money, particularly the Rauner administration, then it’s a balanced budget,” Righter said. “And that’s what’s important.”
Another element of the proposed budget is more than $400 million in savings partly from pension buyout schemes that will offer a lump sum to different classes of pensioners for smaller overall payouts. But given the Illinois Supreme Court ruling that diminishment of benefits is unconstitutional, the plans are voluntary.
State Sen. Heather Steans, D-Chicago, said budget group members arrived at the savings estimates after coordinated research with pension system representatives.
“The [pension] systems themselves ran it through their actuaries to give us what they think is the expected savings should be from the two different programs,” Steans said, “and then they will re-certify once the law is passed and send us recertification.”
Illinois has an unfunded pension liability of $130 billion, the worst in the nation. Some have estimated that takes nearly a quarter of every dollar the state brings in.
Other pension savings will come from kicking back any pension costs from salary increases greater than 3 percent to the local employer, like a university or public school district, a practice estimated to save $220 million.
Steans said there are no new programs in the budget, with the exception of $25 million appropriated to the Student Assistance Commission for the Aim High program developed by cooperative efforts of the higher education working group. The Aim High program will give matching grant dollars to universities to be used as scholarships as a way to keep students in Illinois.
There’s also a supplemental appropriation of $1.3 billion for a variety of overspending in the current fiscal year, including at the Illinois Department of Corrections, and language for funds to go to the Quincy Veterans Home.
The House now has the budget. If the House doesn’t pass it by midnight Thursday, a supermajority would be required for passage.
