SPRINGFIELD — For the third year in a row, the three men at the center of Illinois politics are circling inside the Capitol, and nobody is pulling punches.
In one corner is Republican Gov. Bruce Rauner, and in the other are Democratic leaders Michael Madigan and John Cullerton. The goal: Pass a budget before the end of session on May 31.
The past two years have seen lawmakers come up short, both sides throwing in the towel, as an untold number of Illinois residents suffer through the longest gap between budgets of any state in the country.
Lawmakers remain optimistic they can come to terms in the final weeks of this session, though perhaps it is because the thought of heading home without a budget would mean further devastation. The state’s universities, social service providers, vendors and others sit on a long list waiting to get paid.
How close the two sides are to an agreement depends on whom you ask. Lawmakers are on the ropes to provide a plan, and political observers paint a dark picture of financial ruin without it.
A spokeswoman for Rauner deferred questions for this story to an opinion piece the governor wrote Tuesday in the Springfield State Journal-Register and several subsequent news conferences he’s held across the state.
In the opinion piece, the first-term Republican governor reiterates many of the policy stances he has taken during his tenure, arguing he would support the passage a tax increase, but only with fundamental changes to what he sees as a "broken system."
“We’ve been trying to negotiate a good deal for taxpayers for more than two years,” Rauner wrote. “But we won’t be pressured by special interests, insiders and career politicians to take a bad deal for taxpayers.”
Much of the spotlight over the past few years has been on the battle between Rauner and Madigan, the powerful longtime speaker of the House and chairman of the Illinois Democratic Party.
While Rauner has painted Madigan as a career politician who bows to special interest, Madigan spokesman Steve Brown points to the budgets passed since Madigan first became speaker in 1983, saying Madigan worked with governors and legislators of both parties to get them approved.
“As I’ve said, the governor needs to look at himself in the mirror and ask that figure that he sees, ‘Why did you screw up this state budgeting process?’” Brown said.
This spring session has seen much of the budgeting focus turned to the Illinois Senate, where months of bipartisan talks have seen senators taking swings at passing a "grand bargain" budget that would include items as varied as a property tax freeze, gambling expansion, workers' compensation reform, an income tax increase and changes to the school funding formula.
These talks failed in March, when Republicans pulled their support and said more negotiations were needed.
This past week saw another effort in the Senate to pass budget items on to the House, with bills that expand gambling, change state purchasing rules, reform pensions, change the school funding formula and allow the state to borrow $7 billion to pay down some the state’s $14.1 billion backlog of bills.
But work to pass a bill to implement necessary cuts to get to the previously approved $36.5 billion spending plan failed, and bills that would reform workers' compensation or raise taxes were never called for a vote.
As in March, Democrats said time was running out to get a budget approved and that Republicans needed to vote.
“I was under the impression we had reached an agreement on the budget,” Cullerton said in a news conference after the vote.
But Republicans said the two sides were close to an agreement on the remaining issues and that Democrats need to wait for both sides to agree to terms before putting items up for a vote.
“I think there were significant reforms that were done today,” said Sen. Chapin Rose, R-Mahomet, shortly after the Senate voted Wednesday. “But the better course of action would have been to move the items that were in agreement, then go back into the room and make sure the budget balances, get the language finalized and then put it for a vote.
“We’re this close to getting something done.”
Several senators told a Lee Enterprises reporter that they believe all parties have been negotiating in good faith and that an agreement can be made.
Rauner has publicly been cordial when addressing the Senate’s effort to pass a budget, but he did not mince words when asked about Madigan and House Democrats during a stop Tuesday in Springfield.
“House Democrats, under Speaker Madigan, have showed no good faith willingness to engage in negotiations,” Rauner said.
He also addressed a recent move by Madigan to have four of the top Democrats in the House negotiate with the governor’s office over non-budgetary items, referring to it as an effort to derail budget talks in the Senate.
Brown dismissed the governor’s concerns, saying the House wants to work with Rauner on ways to improve the state’s economy.
Similar sentiment is shared by House Republican Leader Jim Durkin of Western Springs, who said Thursday afternoon that he was "cautiously optimistic" a deal could be reached before May 31.
“The sense of urgency is immense,” Durkin said. “You can feel it in the air, and I agree that we need to bring this to a resolution.”
How did we get here?
Those who watch Illinois politics said the budget impasse represents a "perfect storm" of conflicting personalities and years of poor planning.
Those decisions stretch back decades and stem from members of both parties, said Kent Redfield, a professor emeritus of political science at the University of Illinois at Springfield.
He cited the pension strain created by the "crooked bargain" at the end of Republican Gov. George Ryan’s tenure, when thousands of longtime state employees were allowed to retire early so the incoming Democratic administration could fill those openings with their own people.
He also noted the overall tenure of impeached Democratic Gov. Rod Blagojevich, who is in federal prison after being convicted of corruption, and the 2008 recession as events that already put Illinois in a perilous fiscal position well before Rauner took office.
The recession significantly changed the way the state handles its budgeting, said Jak Tichenor, interim director at the Paul Simon Public Policy Institute at Southern Illinois University Carbondale.
Before then, a majority of spending was related to federal mandates such as Medicaid, making for a fairly predictable budget process. State lawmakers negotiated over discretionary spending such as K-12 and higher education funding, but Tichenor said they would enter those negotiations knowing state revenue was stable.
“But if you go back to 2008 to the great recession, and state revenues just went off a cliff,” he said. “You had appropriation committee chairs at the Capitol looking at balance sheets and saying, ‘Well I’m trying to fund a $32 billion budget, and I only have $24 (billion) to $25 billion in income.’
“And that’s where you started to see the real allocation of pain and scarcity instead of budget making as we traditionally did it.”
A temporary income tax increase approved by lawmakers and then-Gov. Pat Quinn in 2011 moved the personal tax rates from 3 percent to 5 percent and the corporate tax from 4.8 percent to 7 percent, which helped to pay down some of the bill backlog. But the increase was allowed to expire in 2015, reducing the rate for individuals to 3.75 percent and to 5.25 percent for corporations.
The motivation behind letting it expire was so the newly elected Rauner could negotiate a new budget with the Democratic-led House and Senate.
Two-and-a-half years later, the sides have only managed to agree to a stopgap budget in 2016 that provided some money for struggling universities and social service providers. Most spending has been court-ordered.
Redfield said that from the start, Rauner and the Democrats seemed to underestimate one another, specifically when Rauner started to sell his "turnaround agenda" that included the creation of local right-to-work zones and other measures perceived to be anti-union.
“I think the initial set of demands the governor was putting out there was overtly optimistic in terms of what one could get a Democratic legislator to agree to,” Redfield said. “That clearly got negotiations off on a very bad start, and we never got to the point where we could get an acknowledgement from both sides that they were sharing power and they needed to make compromises.”
Like Redfield, Tichenor said the first few months of Rauner's tenure knocked the relationship of party leaders off balance. Rauner's initial agenda was unique, Tichenor said, because past governors did not traditionally negotiate structural reform packages as part of the overall budget negotiations.
“The governor may have underestimated just how strong the Democrats' resolve was not to turn their backs on their traditional allies, as well as the Democratic leaders may not have appreciated how strongly the governor felt about trying to impose some of those turnaround agenda items in exchange for a tax increase,” he said.
The inability to produce a long-term budget has had a significant impact on the state and its residents. If a spending plan isn't approved until the 2018 General Election, as some have speculated, the effects could be catastrophic.
The unfunded liability in Illinois’ pension funds hit $119 billion in fiscal year 2015, according to an April report from Pew Charitable Trusts. That means just 40 percent of the state’s pension system is funded. Among the states, only New Jersey is in worse shape.
A report by the Illinois Comptroller’s Office on Wednesday said the bill backlog has increased to a record $14.3 billion, nearly triple what it was two years ago.
In a statement, Democratic Comptroller Susana Mendoza laid the blame at the feet of Rauner’s administration.
“It’s clear the Rauner Administration has been holding bills at state agencies in an attempt to mask some of the damage caused by the governor’s failure to fulfill his constitutional duty and present a balanced budget,” Mendoza said, referring to a practice where the administration can sit on a voucher before submitting it to the comptroller’s office.
“At a time when Senators from both sides of the aisle are working together to reach a deal, this administration has been keeping them in the dark about the true extent of the bill backlog.”
Higher education and social service agencies have taken a pummeling during the impasse, suffering through cutbacks and layoffs to try to make ends meet.
In Decatur, the lack of a state budget has played a major role in cuts made at Richland Community College. Since the start of spring, the college has eliminated five administrative positions and announced plans to lay off 18 employees, eight full time and 10 part time, and offer buyouts to an additional 14 full-time staff. It has also closed its child care center, with administrators pointing to the state situation and declining enrollment as factors.
College officials have said they also plan to approve a budget for the coming fiscal year without any money from the state, which used to make up 14 percent of its total budget.
Those actions are part of what Tichenor refers to as a "brain drain" that has occurred due to the budget impasse. As the state struggles to fund higher education and Monetary Award Program grants, out-of-state schools have begun to poach potential students and faculty with the promise of financial stability, he said.
“We’re losing some of our best and brightest in the state because of the impasse,” he said.
If lawmakers are unable to come together on a budget, then Redfield said the state will enter a "very dark scenario" that could mean irrevocable damage to social service agencies and most colleges and neighboring communities.
“If we have no movement until after the 2018 elections, I think it would be a certainty some universities would not open that fall,” he said. “I think Eastern, Western, Northeastern, and Chicago State are all the top of the list. The Carbondale situation is pretty tenuous as well.”