Local lawmakers unsure whether special session will yield Illinois budget

McHenry County's state lawmakers have mixed opinions about whether a special session starting Wednesday will result in a budget.

The General Assembly will have 10 days to do something that the Democrat-dominated body and Republican Gov. Bruce Rauner haven’t been able to do for two years – approve a complete 12-month budget. The next state fiscal year starts July 1, and lawmakers again ended the spring session May 31 without passing a spending plan. While Senate Democrats did pass a budget in the last days of the spring session, Democratic House Speaker Michael Madigan did not bring it forward for a vote.

Besides the Democratic Senate plan, House and Senate Republicans last week with Rauner’s backing unveiled a proposal that they say balances $5.2 billion in tax increases with meaningful reforms. McHenry County’s lawmakers, all of them Republican, say they hope that the GOP proposal will lead to a needed compromise. State Sen. Karen McConnaughay, R-St. Charles, was one of the GOP lawmakers who helped present the package – she said it codifies where both sides were in Senate negotiations before she said the Democratic majority walked away and advanced their own plan.

“I’m optimistic that by putting our compromise in bill form, I hope the Democrats recognize that we want to get the state back on track,” McConnaughay said.

But some lawmakers, such as David McSweeney, R-Barrington Hills, said any deal that raises taxes will further derail Illinois and will not get his support.

“We obviously need a budget, but raising taxes will not only kill jobs but drive more people out of the state,” McSweeney said.

While the stakes have been high every year that the financially troubled state has gone without a budget, the consequences could be catastrophic if the impasse enters its third year.

Illinois school districts might not be able to open their doors at the end of summer with no plan to distribute per-pupil funding – although lawmakers during the last two fiscal years were careful to fund K-12 education despite the deadlock, there is no guarantee that lawmakers this time around will be amenable to passing a stopgap deal. Even if a partial budget funding education has passed, more than $1 billion owed schools in categorical reimbursements and other expenses is tied up in the state's $15.1 billion backlog of unpaid bills.

The state’s bond rating – already the worst of all 50 states and one step above non-investment grade – almost certainly will be downgraded to junk status if the special session does not yield a budget.

The Illinois Department of Transportation warned contractors last week that work would stop on road projects statewide on June 30 without a budget – IDOT did the same last June, but a six-month stopgap budget staved off any stoppages. And the Illinois Lottery will stop selling tickets for the multi-state Powerball and Mega Millions games because of uncertainty over whether big winners could get paid – the lottery in 2015 began handing out IOUs to prize winners until legislation passed to allow prizes to be paid out.

State Sen. Dan McConchie, R-Hawthorn Woods, said the spectre of schools not opening might force lawmakers to strike a deal. While some suburban schools might be able to open, downstate districts heavily dependent on state funding and Chicago Public Schools might not. However, he said both the Senate Democratic package and the GOP proposal put too much hurt on taxpayers.

“I would say there has to be some sort of resolution, certainly by the end of July, quite simply because there will be too many schools that won’t open if we don’t do that,” McConchie said.

But if reaching a deal was hard during the spring session, the Illinois Constitution makes it harder now.

After the May 31 end of session, the number of votes needed to pass a budget increases from simple majority to three-fifths of both houses. While Democrats hold a supermajority in the Senate, they are a few votes shy in the House, meaning any budget bill there will need buy-in from Republicans as well as the handful of suburban Democrats who have bucked Madigan before on tax increases.

The proposal unveiled by Republicans includes a 33 percent increase in the state income tax and an expansion of the sales tax to certain services, but with reforms to workers’ compensation and school funding, as well as advancing a constitutional amendment for term limits. It also limits the income tax increase to four years, pairing it off with a four-year statewide freeze on property taxes. Critics such as McSweeney have called a freeze inadequate, alleging that an income-tax increase in exchange for freezing the highest property tax burden of all 50 states from increasing even higher is not a good deal.

But McSweeney also pointed out that the GOP budget bill also includes $169 million in earmarks for capital projects by state lawmakers, which he called disgraceful in a plan to sock people with tax hikes. He singled out $19,700 for renovations to a farmers’ market facility, $18,750 for improving a community center and gym, and $65,000 toward a Puerto Rican museum and fine arts center.

“That’s exactly the wrong message to have special earmarks for members of the General Assembly. We need to change the discussion. We need to change spending. Spending is growing,” McSweeney said.

Rep. Steven Reick, R-Woodstock, called the Democratic Senate tax proposal "a bridge too far" unless it is paired with meaningful property tax relief.

“I just cannot blindly support a tax increase without significant relief for the overtaxed property owners in this county,” Reick said.