State

Rauner will lay out ambitious goals for budget in Wednesday speech

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Gov. Bruce Rauner will deliver the final budget speech of his current term Wednesday, laying out his spending priorities as he heads into his bid for another 4 years.

To that end, the governor has set himself a formidable set of objectives that he said will be addressed in his budget plan for the fiscal year that starts July 1. This is what Rauner said during his State of the State speech Jan. 31:

“The surest road to economic vitality and job growth is a collaborative effort to regain our financial integrity,” Rauner said. “To that end, I will submit a balanced budget proposal [in February]. It will offer a path to reduced spending, and it will show the way to surpluses going forward so we can reduce taxes and start to push back against the assault on middle class bank accounts.”

During an appearance in Skokie in January, Rauner also said he would be asking for more money for education in his budget as well as to deal with the ongoing budget deficit.

Here’s a look at some of the budget issues:

The deficit

During a recent hearing before the Senate appropriations committees, Rauner’s budget office put the total state budget deficit at around $9 billion. That’s a combination of the remaining bill backlog and the deficit that Rauner said was part of the budget approved by lawmakers last summer.

Sen. Heather Steans, D-Chicago, one of the appropriations chairs, said Rauner’s budget director Hans Zigmund said the governor will address how to reduce that in the budget plan.

“I just heard him say [the governor] was going to address the $9 billion, that there would be a plan to do that,” Steans said after the hearing.

The administration has already taken steps to cut the deficit it says is part of the current year budget. That gap started at $1.7 billion, the administration said. Since then, the administration has enacted about $150 million in spending cuts, including $41 million to the Department of Commerce and Economic Opportunity, $85 million to the Department of Transportation and $21 million to the Department of Agriculture.

Another $875 million was covered by taking money from state funds that are set aside for specific purposes. As part of the budget deal, lawmakers gave Rauner the ability to tap into those special funds.

There is still about $600 million of the deficit left to deal with in this year’s budget. Zigmund told senators the administration wants to work with the legislature to figure out how to close that gap.

Bill backlog

Because of the budget agreement, the current bill backlog is about half of what it grew to be during the two-year budget impasse.

At its worst, the bill backlog stood at $16.67 billion. On Friday, the backlog stood at about $8.67 billion. The backlog has hovered around $8.5 billion since the state issued bonds used to pay down bills that were costing the state late payment penalties and also to leverage federal money that was used to pay additional old bills.

The question is what resources Rauner wants to devote to further cutting the backlog. The size of the backlog varies throughout the year, growing during periods when tax collections are normally slow and being reduced when tax collections are strong, like during tax filing season. Moreover, there are always bills in the pipeline waiting to be paid, so the state will never get to zero backlog.

Because of the variables involved, Comptroller Susana Mendoza’s office doesn’t set an absolute figure for what would be considered a normal backlog for the state to carry. However, they said the amount would be closer to $1 billion than the current backlog.

Reduce taxes

Rauner said his budget will include a plan to start cutting back the state income tax increase. During a speech to Sangamon County Republicans on Thursday, Rauner said he will “bring ‘em back down to 3 percent over the next two years.”

That’s a reference to the individual income tax rate, which now stands at 4.95 percent.

At the same time, the state is supposed to add at least another $350 million for K-12 education to keep pace with the goals set out in the school funding reform plan. The state is also facing higher pension costs and increases in other areas.

Balanced budget

Rauner said his budget proposal is going to be balanced. When he said that during the State of the State speech, it drew a sarcastic standing ovation from Democrats who contend he has yet to present a balanced budget.

Steans noted that last year, Rauner put an entry in his budget proposal that nearly $5 billion would be addressed through negotiations over the “grand bargain” that were then going on in the Senate. That grand bargain eventually collapsed, and Democrats accused Rauner of scuttling them.

Steans’ point was that last year’s budget plan wasn’t balanced because the $5 billion was only addressed vaguely in the proposal. PolitiFact has also found the governor’s claims of submitting balanced budgets is false.

Pending impasse

Regardless of Rauner’s budget proposal, the governor said last week that House Speaker Michael Madigan wants another budget impasse.

“Speaker Madigan has already indicated, he’s already told members of his caucus that he would love to see another budget stalemate this year,” Rauner said. “The Speaker thrives on that sort of disagreement.”

Rep. Lou Lang, D-Skokie, immediately took to social media to repudiate that.

“I’ll say on the record. Governor Rauner is lying,” Lang wrote. “In no way or form did Speaker Madigan say or hint to House Democrats that he wants a budget stalemate repeated.”

Two of the representatives who represent Springfield agreed there is no appetite for another impasse, even though they split on the current budget. Rep. Sara Wojcicki Jimenez, R-Leland Grove, voted for the spending plan and tax increases.

“What I’ve found, at least in our community, is that having a budget has created a real sense of stability and gone back to a time when it was more normal,” she said. “I don’t think there can be much of a dispute locally that we need a budget.”

Rep. Tim Butler, R-Springfield, didn’t vote for the budget and still thinks it was the correct vote. However, he doesn’t think people want another impasse.

“I certainly don’t see any appetite for a budget impasse,” Butler said. “When I talk to people in my district, and when I talk especially to people who rely on state government, they are happy that a budget has been enacted.”

Butler said he still hears complaints about the income tax increase, but “at the end of the day having a budget in place has created a little more stability that we didn’t have over the last couple of years.”

Contact Doug Finke: doug.finke@sj-r.com, 788-1527, twitter.com/dougfinkesjr.

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