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With no budget, Rauner repeats calls for pro-business reform

Illinois Gov. Bruce Rauner delivers his State of the State address last month to a joint session of the General Assembly in the House chambers at the State Capitol in Springfield.

SPRINGFIELD — One week after President Barack Obama called for bipartisan compromise in a speech before the Illinois General Assembly, Gov. Bruce Rauner on Wednesday will address that still deeply divided body about his plan for next year’s state budget.

The first-term Republican’s second budget address comes as he and the Democrats who control the Legislature remain deadlocked over the budget for the current fiscal year, which began July 1. Despite impending layoffs at public universities, disruption of social services across Illinois, and warnings that the state is digging itself billions of dollars deeper into debt because of declining revenue and court-mandated spending, there’s no sign of a resolution in sight.

Democrats say Rauner continues to insist on passing portions of his union-weakening “turnaround agenda” before he’ll agree to tax increases to balance the budget. The governor says that whereas he and fellow Republicans are seeking structural reforms that would increase revenue by growing the economy, Democrats offer only tax hikes and budget cuts.

One thing on which lawmakers from both parties can agree is that while state law requires the governor to present his budget plan for next year, Rauner’s speech needs to focus on resolving the current impasse as well.

“What I would like to hear is a focus on solving the problem this fiscal year,” said Sen. Andy Manar, a Bunker Hill Democrat who serves on Senate appropriations committees. “We should continue to work on the current fiscal year because next fiscal year’s budget framework isn’t going to come together without addressing the problem in the current fiscal year.”

Rep. Dan Brady, a Bloomington Republican who serves on the House Budget Oversight Panel, said Rauner may offer a two-year plan that includes granting him authority to move money around within this year's budget to cover shortfalls in areas that aren’t protected by the courts, such as higher education.

“Because of the quicksand that we’re in … the governor is going to need a lifeline extended to him from the General Assembly, Democrats and Republicans, allowing him the authority to do budget transfers that none of us like,” Brady said. “But it’s going to have to be done if we’re going to try and have some form of a budget yet in this fiscal year.”

Although a similar solution was used to plug holes in last year’s budget after a temporary state income tax increase was allowed to partially roll back, Democrats appear unlikely to go along again this year.

Another issue on which there seems to be some consensus, both inside and outside state government, is that new revenue will be needed to put the state on firmer financial footing.

In a report released Thursday, the Chicago-based Civic Federation, a nonpartisan budget watchdog, recommends raising personal and corporate income tax rates back to their pre-rollback levels of 5 percent and 7 percent, taxing non-Social Security retirement income, expanding the sales tax to services, and temporarily removing the sales tax exemption for food and over-the-counter medicine, among other recommendations. These increases should be coupled with spending cuts aimed at paying down the state’s unpaid bills and other changes to deal with ballooning pension costs, according to the report.

“There is nothing politically attractive, there is nothing easy about what the state of Illinois faces,” said Laurence Msall, the organization’s president.

Ralph Martire, executive director of the Center for Tax and Budget Accountability, said his organization has been making similar revenue recommendations for years.

“If you don’t do those things, you can’t solve your problem,” Martire said. “And that’s not ideological. That’s math.”

The Responsible Budget Coalition, a group of more than 250 social service agencies, labor unions and other organizations across the state, also is urging the state to “choose revenue.”

“We want to hear the governor say his No. 1 priority is a budget that invests in families and communities and that he won’t use them as leverage for his nonbudget agenda,” coalition spokesman Neal Waltmire said.

Rep. Mike Smiddy, a Hillsdale Democrat, said what he doesn’t want to hear Wednesday is another recitation of Rauner’s turnaround agenda.

“If he continues to bring out the issues time and time again, I think it’s going to be very difficult for the state,” Smiddy said.

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