Appropriations vetoes
more cuts and 'the unveto'

THE NO. 1 ISSUE as the Illinois General Assembly convenes October 1 for its fall veto session is still the state budget. At least that's the way it looked at this writing on September 1. Gov. James R. Thompson was still signing, vetoing or rewriting substantive bills. But he had taken action on appropriations bills, with the exception of the last of the bills that comprise the capital portion of the budget.

Surprised? You shouldn't be. The 1979-80 recession has finally hit state government. Sales tax revenue has plummeted. Welfare spending has soared. And Congress is going along with Reaganomics, approving cuts in the budget, cuts in taxes and cuts in federal aid to the states.

It is too early to tell (in September) which of Thompson's appropriations vetoes the General Assembly will try to override, but it is possible to spot the most controversial.

EDUCATION: First "lower" ed. The General Assembly had approved $2.772 billion; Thompson has approved $2.634 billion — a cut of nearly $140 million. Of that, $25 million is actually a cut in funds to schools; the remaining $114 million is a cut in funds to teacher pensions. In each case the cuts were reduction vetoes, not line item vetoes; Thompson cut the money back, he did not cut the programs out. The best bet for an override appears to be in special education — which suffers from a classic case of the "spiraling mandate syndrome" — where the vetoes total about $10 million.

Now "higher" ed. The General Assembly had approved $1.233 billion; Thompson has approved $1.198 billion — a cut of $34 million. There is no cut in direct funds to universities: $7 million was cut from scholarships; $27 million from faculty and staff pensions. But the General Assembly probably won't bother to try to override the scholarship veto, since neither the General Assembly nor the governor went along with the commission's hefty supplemental request last fall.

PUBLIC AID: The General Assembly has approved $2.951 billion; Thompson has approved $2.938 billion — a cut of $13 million, which is distributed among three programs administered by the Department of Public Aid: Income Assistance, Medical Assistance and Social Services. Legislators may try to override a $1.5 million veto in relocation benefits, one of the three major social services benefits available to those who receive Income Assistance.

However, the most likely area for an override attempt appears to be in the so-called "local initiative" program under Social Services, where the vetoes total $1 million. But public aid is only one of the nine social service agencies involved in local initiative; the overall vetoes to all nine agencies total $8.3 million. All nine agencies are involved in the local initiative programs under Title XX of the U.S. Social Services Act. The cuts which Thompson made were line item vetoes; in effect, eliminating the programs.

'Local initiative' out

The state "shares" federal reimbursement funds for a number of social services programs, including local initiative, with local public and private agencies. Actually, the state pays 75 percent of the cost, via federal funds, while the local agencies pickup the remaining 25 percent. But Title XX reimbursement to Illinois will decrease by about $33 million or 25 percent in

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fiscal 1982. Thompson cut local initiative out of the budget in April; the General Assembly pasted it back in; he vetoed the appropriations in July.

TRANSPORTATION: The General Assembly had approved $2.595 billion; Thompson has approved $2.492 billion — a cut of $102 million. The cuts were not in the Department of Transportation's operating budget, but in its capital budget, which reflects authorization rather than spending. The reason: cutback of matching federal funds. And in the absence of a comprehensive highways/mass transit program this year, the General Assembly isn't about to override since the state can't possibly make up the federal matching funds (see p. 10).

MENTAL HEALTH: The General Assembly probably won't override Thompson's veto of $5.4 million in "operations" appropriations for the Department of Mental Health and Developmental Disabilities since he maintains the state can save that much money by not filling some 300 mental health jobs in fiscal 1982. These are new jobs that would have been created despite Thompson's hiring freeze and old jobs that will be vacated for one reason or another.

But legislators may not go along with the governor's veto of $1.4 million in appropriations for "grants" to local mental health facilities. In an effort to improve the quality of mental health care, the state has adopted a policy of deinstitutionalization that will eventually reserve institutions for the chronically ill, who comprise a minority of patients. Meanwhile local public and private facilities must absorb the vast majority of patients, those who are temporarily ill. Thompson had originally budgeted a 7 percent increase in grants-in-aid to the local facilities. But when they asked for an 8 percent increase, the General Assembly gave it to them. Thompson reduced the appropriations back to 7 percent.

CHILDREN AND FAMILY SERVICES: The General Assembly may attempt an override of Thompson's vetoes of $4.1 million in day care appropriations. The Department of Children and Family Services provides the following kinds of day care services, some of which would be affected by the veto: employment related, federal migrant, transitional (for recipients of Aid to Families with Dependent Children under the Department of Public Aid's Income Assistance Program), and local effort. The department's day care programs rank third in spending behind foster care and child abuse programs.

Another override possibility is a similar veto of $2.1 million in foster care appropriations.

CORRECTIONS: The General Assembly may well try to override Thompson's veto of $1 million in state reimbursement to counties for medical bills (above $7,500 per person) for state prisoners housed in county jails while they await trial. And legislators may try to override a $1 million veto in state aid to local private agencies which provide job counseling, training and placement help for inmates released early from state prisons. The state has adopted an early release policy to ease overcrowding in the prisons.

Pension cuts in

PENSIONS: The largest single veto is Thompson's $183 million cut in pension appropriations: $114 million for teachers, $27 million for faculty; $37 million for executive branch employees; $1 million for legislators and $4 million for judges. Both Republicans and Democrats concede the General Assembly can't restore the $183 million in pensions, certainly not the $114 million for teachers, without making comparable cuts elsewhere. According to Thompson, his veto does not affect the pensions of employees who have already retired, since he reduced the employer contribution for one year, but did not eliminate it.

While assets of the state's five pension systems cannot guarantee the future pensions of employees who are now in the work force, they do guarantee the present pensions of those no longer working. Anticipated assets at $5.2 billion, coupled with anticipated liabilities at $10.2 billion means the state funded its pension programs at 51 percent for fiscal year 1981, according to Thompson's Bureau of the Budget. With the vetoes, the Bureau of the Budget estimates pension funding will be about 50 percent for fiscal 1982.

By far the most unusual veto was Thompson's "unveto" of $2.6 million in state's attorneys' salaries. By statute, the state is supposed to reimburse the 102 counties for two-thirds of the salaries of their state's attorneys and assistants. Thompson's original budget called for funding the state's full share, or a $3 million appropriation. But in April, he eliminated the $3 million from his budget. In a compromise, the General Assembly restored 80 percent of the funding or $2.6 million. But Thompson vetoed the entire line item in July. The county boards — with their own tight budgets — were infuriated. There was talk of taking Thompson to court for not following the statute. In what is believed to be an unprecedented move, Thompson unvetoed the veto, signing the entire line item.

The state Constitution doesn't say the governor can't change his mind on vetoes, but it doesn't say he can, either.

Yet Thompson's vetoes, unvetoes, and the General Assembly's overrides may not be the real budget story this fall. As of September 1, Congress had passed Reagan's consolidation of categorical grants into block grants but had not yet appropriated the actual amount of federal block-grant aid to the states for federal fiscal 1982 (begins October 1). The actual amount Washington sends to Springfield could be less than Thompson has anticipated, despite his trips to Washington. Then there's Chicago. No one knows what will happen to Chicago mass transit or Chicago schools. A legislative press liaison said it best when he predicted the General Assembly's fall session would be identical to its spring session: "Nobody knew what the hell was going on — until it happened."

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