Latest posts by Mike Sandrolini (see all)
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By MIKE SANDROLINI
PROVISO | After nearly three years without a state budget, the Illinois legislature now has one—albeit the House and Senate both needed to override vetoes by Gov. Bruce Rauner in order to get it enacted.
Earlier this month, the House got 71 votes to override Rauner’s veto—with State Rep. Chris Welch of the 7th District one of 61 Democrats who voted for the override—the minimum needed for an override. Ten Republican House members also voted to override.
In the Senate, one Republican, Dale Righter of Matton, joined State Sen. Kimberly Lightford and 35 other Democrats in voting to override the governor’s veto. Righer’s vote gave the Senate the necessary 36 votes needed to override.
Welch is pleased that the state finally has a budget, which he said, “saved the state of Illinois.”
“It was a rank-and-file effort, it was bipartisan, it was balanced,” he said. “This is a balanced budget where we actually have more revenues than expenditures. We actually end up with a small surplus. This budget does a lot for the state of Illinois and Proviso Township in particular.”
Illinois was on the verge of becoming the first state likely to have gone into junk bond status, and this budget helped avoid that, Welch said.
“We were on the fiscal cliff and about to go over,” he said. “Had we not passed this budget, we would have been lowered to junk status and it would have cost the state billions to borrow money. By passage of the budget, we’ve already heard from Standard and Poor’s and they moved us from negative to stable.”
The budget includes around $36 billion in spending and $5 billion in new revenue. Schools will open on time, and funding for K-12 schools increases by $350 million under the new budget—something Welch noted.
“There is also a $50 million increase for early childhood,” he said. “This budget significantly increases funding for schools. We’ve immediately allowed road construction projects to resume, the Lottery to resume, and funding to our universities and college students. This was a huge deal for the state of Illinois and the people of the 7th District. Long term, it gets us back on track to long-term fiscal health”
Welch also urged Rauner to sign Senate Bill 1—a funding formula that would give new revenue to school districts most in need first.
“We’ve been trying to do this for over 20 years in this state,” he said. “Under Senate Bill 1, we change the funding formula to an evidenced-based formula. Senate Bill 1 will increase the amount of money in school districts across the state, specifically in schools in the 7th District.”
Permanent tax increases are coming with the implementation of this budget. The tax rate for individuals goes from 3.75 percent to 4.95 percent, while the corporate tax rate jumps from 5.25 to 7 percent. This means that families will pay around $720 more per year if their household income is $60,000. The state legislature passed a temporary tax increase in 2011 when Pat Quinn was governor—with the individual rate going from 3 to 5 percent—but much of that increase was rolled back after Rauner became governor in 2015.
“No one likes to have their taxes raised,” Welch said. “I don’t know a legislator who wakes up in the morning and says, ‘Oh, I want to go and raise taxes on constituents today.’ That’s just not something that we do. But the reality is that we’ve said it all along that a responsible budget was going to be a budget that had cuts and revenue, and that’s what this budget has.
“It’s a responsible budget. It’s a balanced budget, and for those who are concerned, you can also remember that Pat Quinn’s (individual) income tax was at five percent. So this isn’t higher than what Pat Quinn installed in 2011. It’s 4.95 and Pat Quinn’s was at 5 percent.
“Pat Quinn won the 7th District with over 90 percent of the vote (in 2014). If you supported Pat Quinn at 5 percent, you can certainly support this budget at 4.95 percent and all of the positive things that it does for the state and the district.”
The new budget includes over $2 billion in spending cuts, and around a 10 percent cut for higher education as well as 5 percent cuts for many state agencies. Despite all this, Illinois has a backlog of $15 billion in unpaid bills and over $130 billion in underfunded pensions.
“Certainly we need to reform the pension system in this state,” Welch said. “We know that pensions are a huge driver in our budget instability. What we need to do is find a constitutional way to address it. There are still active negotiations going on that we hope to be constitutional solutions.
“One of the things we’re looking at is what we’re calling consideration models. In order to get someone to give up a benefit, you’re going to have to give them some type of consideration, and it’s going to have to be voluntary.
“Now that we have a budget, now we have a permanent stream of income, I think people will have a better idea what type of considerations can be offered to those who are currently in the system. The real thing is is that there are too many people in the system and we’re going to have to get people out of the system. In order to do that, we have to offer them something and hopefully they take it and we get a lot of people off the system and lower the costs.”
In regard to Illinois being competitive economically with surrounding states, Welch insists the state is competitive. Rauner had been adamant that his “turnaround agenda”—which called for worker’s compensation reform, term limits, legislative redistricting, a property tax freeze and a new funding formula for schools—be part of any tax increase in the budget, but none of it was implemented.
“If you don’t believe this state is competitive, you’re just buying into Bruce Rauner’s rhetoric,” Welch said. “If you look at our income tax and you look at our spending, Illinois is lower or very close to all of our neighbors. We are lower or right there with all of our neighbors; many of them are higher in terms of income tax and their spending. Illinois is a very competitive state but there are always things we can do to get better.
“And that’s why we’re probably going back into special session in the next two weeks or so because we still have some unfinished business. We have always said that if the governor’s reform items were not on budget items—although we were working with him on them in May and June—we separated them from the budget because they’re non-budget items. We are still working on those; we’re hoping the governor gets back to the table and work on them with us.
“When we left Springfield last week, we were hoping the communication would continue but the governor took a wrecking ball to his staff this week and has gone far to the right with hires. We just don’t know what to expect from this governor right now. We don’t know if he’s even going to come back to the table and talk about these reforms. We know that there’s more work to do. We know that we can probably make it more competitive, doing some things with worker’s comp; we know that we make it more competitive by doing some things with the property tax issue; we know we can make it more competitive by looking at a number of the items the governor mentioned.
“We were close this past session and we’re hopeful that he continues the talks, but with the things he’s done in terms of the changes in his office, it’s a negative signal.”