Madigan’s unbalanced budget overspends by $7 billion
llinois Comptroller Leslie Munger said Speaker Madigan's budget proposal would increase the state's unpaid bills to $15 billion and cause eight to nine month payment delays for vendors.
After having just 90 minutes to review House Speaker Mike Madigan’s unbalanced budget proposal, the Illinois House of Representatives voted in favor of the bill on May 25. The Illinois Office of Management and Budget said this plan would leave the state with a $7 billion budget deficit in fiscal year 2017. Gov. Bruce Rauner is expected to veto the bill.
The release of the plan for fiscal year 2017, Senate Bill 2048, the subsequent vote and the resulting chaos was an infuriating but typical example of the political games Illinois politicians play. The 500-page bill was introduced late in the evening and the vote was held shortly thereafter. The bill passed the house by a 63-53 vote. Several Republicans have vowed to protest the vote.
Madigan’s spending plan would near $40 billion, though the state is expecting to raise $32.6 billion in revenues in 2017.
It’s very likely the General Assembly will end spring legislative session without a budget for either fiscal year 2016 or 2017.
Key facts on SB 2048 include:
- The budget plan allots $40 billion in spending for fiscal year 2017, markedly more than the state will spend in fiscal year 2016, a year in which the state operated without a budget.
- If the $7 billion budget deficit were to be covered via income taxes, the personal income-tax rate would have to jump to 5.5 percent from 3.75 percent today, while corporate income tax rate would have to increase to 7.75 percent from 4.8 percent.
- The bill only appropriates $13.7 billion of the full budget. The remainder, approximately $26 billion, would operate under consent decrees, court orders and continuing appropriations. Those decrees, orders and other appropriations directed nearly 90 percent of the state’s spending in fiscal year 2016 and allowed the state to operate without an official budget for the full year.
- Illinois’ unpaid bills would surpass $15 billion by the end of fiscal year 2017 if SB 2048 passes, according to the Illinois Comptroller. Illinois’ current bill backlog already exceeds $7 billion.
- The plan includes a $100 million subsidy to Chicago Public Schools in the form of additional contributions toward the Chicago Teachers’ Pension Fund.
The bill also includes nearly $300 million in additional subsidies to Chicago Public Schools. That’s the district’s share in an additional $700 million in education funding for all school districts. The distribution of the $700 million would be based on each district’s current share in the state’s nearly $2 billion Poverty Grant Fund. Since Chicago’s current share of that fund is 41 percent, CPS would receive nearly $300 million of the new funding.
- An additional $75 million in funding will go toward Early Childhood spending.