The state of the State

The legislative view of the budget

By NORA NEWMAN JURGENS

THIS year's legislative appropriations process was particularly susceptible to shaky revenue forecasts, forcing both the Thompson administration and legislative leaders to revise and re-revise their spending plans. But despite fiscal uncertainties, by the time Gov. James R. Thompson's $20.137 billion budget made it through the General Assembly, some $434 million had been added by both lawmakers and the administration, extra spending which he had to cut because it could not be supported by estimated revenues.

In March Thompson introduced a budget for fiscal 1987 totaling $20.137 billion, of which $10,660 billion would be spent for the day-to-day operations of state government. It included major budget increases for education and allowed his agencies about a 2 percent increase. (See "Governor on high wire with budget priorities," April 1986, p. 4.) The plan was based on expected revenues from all appropriated funds of $16.886 billion — $11.191 billion of it from general revenue sources that fund the state's basic services and programs.

Revenue forecasts continued to change. Both the governor's Bureau of the Budget (BOB) and the legislature's Illinois Economic and Fiscal Commission (IEFC) revised their revenue forecasts downward. With so much uncertainty about the amount of money that would be available, there was an almost daily guessing game between the legislature and the governor's office as to what the "real" budget would be.

Media attention usually focuses on the governor's version of the budget, except when the IEFC releases its revenue forecasts. What most people don't realize is that the final product is the result of months of bargaining and horse trading between the governor's office and members of the General Assembly.

Diplomatic accountancy

Crafting a state budget is a multiphase operation, requiring the exactness of an accountant and the diplomatic skills of a Henry Kissinger. Gov. Thompson and his BOB pull together the requests of all of state government. Once he presents that budget plan to the General Assembly, it is taken apart and put back together by the House and Senate appropriations committees, the legislative phase in the building of the Illinois budget. What the governor requests in his budget book must be converted into legislation since the state Constitution requires that all monies spent from the state treasury first must be appropriated by the legislature.

Four appropriations committees review every dollar. Bills are assigned to the committees according to subject matter: Appropriations I handles most of the larger agencies that provide the day-to-day services and operations of state government. The Appropriations II committees get the rest.

The two Democrats in charge of the Senate committees are Sen. Howard W. Carroll (D-l, Chicago), Appropriations I, and Sen. Kenneth Hall (D-57, East St. Louis), Appropriations II. Carroll, who has been involved with shaping state budgets for 10 years, is on Hall's committee. Carroll basically runs the entire process. (See box.)

There has been only one Republican spokesman this year for the two Senate committees; Sen. Roger A. Sommer (R-45, Morton), officially the minority spokesman on Appropriations I, has also been serving as the GOP spokesman on Appropriations II since the death last January of Sen. Prescott E. Bloom (R-47, Peoria). Sommer, who is not seeking reelection in November, is respected by his Democratic colleagues as a fiscal conservative, and is extremely knowledgeable about the process. Sommer worked closely with Carroll to reach compromises on the budget bills.

In the House, Democrats in charge of the appropriations process are Rep. Ted E. Leverenz (D-51, May wood) and Rep. Woods Bowman (D-4, Evanston). As chairman of Appropriation I, Leverenz runs his committee with an iron hand tempered with his wry sense of humour. He likes to chide department heads and staffers, referring to members of the governor's staff who attend committee meetings as "'damage control." Bowman, who has a doctorate in economics, conducts his committee with quiet efficiency, preferring the low-key approach.

Traditionally, members of the governor's party take responsibility for sponsoring his budget via the appropriations bills. As minority spokeswoman on the House Appropriations I Committee, Rep. Jane M. Barnes (R-38, Palos Heights) has had the unenviable task of shepherding the governor's budget through a process controlled by Democrats on the House Appropriations I Committee. Rep. J. Dennis Hasten (R-82, Oswego) had the same task on Appropriations II, but this was his last year since he gave up his reelection bid to run instead for Congress. In the Senate, different Republicans take responsibility for sponsoring various agency budgets, depending on their own personal areas of interest and/or expertise. After first having to justify every line item in their budgets with the BOB before the March budget is prepared, agencies have to go through the process again for the legislative committees. Each committee has a large staff directed by a seasoned veteran. These directors of appropriations for the Democratic and Republican leaders deal with many a disgruntled or evasive agency director. The appropriations directors prefer to keep a low profile, letting their bosses shine in the limelight, or take the heat, as the various agency and program budgets wend their way through the legislative process.

In the agencies' view, the legislative appropriations process may seem the closest thing Illinois has to the Spanish Inquisition Appropriations chairmen and their staffs are blunt with agency directors and budgeting staff during committee hearings. They put tough questions to the agencies, who must defend requests for increases, from travel to personnel. The Democrats also don't miss any chances to embarrass the opposition. This year, several agencies requested doors for their offices in the State of Illinois Center in Chicago. Many offices were left without doors after cost-cutting decisions were made during construction of the $173 million building. These door requests were fodder for the Democratic members, bent on proving that the building is a white elephant.

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The differing styles of the two chambers are evident in the committees. While the committee leaders and staff cooperate, the difference in size between the House and Senate, and in the needs of members is apparant in the greater number of amendments introduced by House members to the appropriations bills. As Sen. Carroll pointed out, the House is more "project oriented," while the Senate tends to be more concerned that revenues will support spending.

Democrats were adept this session at taking control of major budget provisions to avoid a replay of last year when they were outmaneuvered by the minority Republicans. The Democrats took over the Build Illinois program, holding in committee the Republican bill (S.B. 1741) and making a bill sponsored by Carroll into a vehicle for the program (see "Build Illinois: Round 2," pp. 44-45). Democrats executed a similar coup with the budget for the Department of public Aid, wresting control from Republicans through a parliamentary maneuver on the House floor. Last year, the public aid budget was the key to Republican strength in last-minute, post-June 30 negotiations over Build Illinois.

While agency directors and lawmakers fight over every extra dollar they can get, the level of appropriations is supposed to match state revenues. When the governor submits a "balanced" budget, his spending recommendations are balanced against projected revenues. He forecasts the revenues and theoretically keeps his spending plan at that level. This year, the revenue picture was muddier than usual for the fiscal 1987 budget, with large differences between the revenue projections presented by the BOB and the IEFC. In its June report, the IEFC estimated revenues for fiscal 1987 would come in $267 million lower than the BOB's estimate.

Concerned early in the session that revenues would not be able to support the spending side of the governor's budget, the two Senate Appropriations chairmen took the unusual step on May 7 of applying a set of guidelines to appropriations bills in order to chop out $95 million. All state government agencies, including the General Assembly, the constitutional officers and the courts, would take a 1 percent "productivity" cut, Sen Carroll announced. By cutting to create a cushion in case revenues came in at the level estimated by the IEFC, Carroll said, "We will be broke, but not bankrupt."

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Hall and Carroll admitted that the figure of $95 million would probably not "hold" throughout the session. But they were committed to taking down the budget to more "reasonable" levels, Carroll said. Certain budgets, because of their importance to the welfare of the state, would be exempted, according to Carroll. These included the Illinois State Board of Education (ISBE), the Department of Mental Health and Developmental Disabilities (DMH/DD), the Department of Children and Family Services (DCFS) and the Department of Corrections.

Gov. Thompson said at the time that it would be a "milestone" if the General Assembly sent him a budget lower then his original plan. After a series of hearings on the budget bills, the Senate appropriations committees did cut about $84 million from bills introduced in the Senate. The same guidelines were applied to House bills when they reached the Senate. But after the governor's three-volume book was converted into final appropriations bills, the legislature sent him a total budget of $20,571 billion, which still exceeded his original proposal by some $434 million. Legislators blamed the excess on the BOB, which approves all agency budgets before they go into line items within appropriations bills. The governor's people blamed legislators, who added pet projects to appropriations bills. The fact is that a combination of both administration "special considerations" and legislative "add-ons" added the extra dollars.

As the session came to an end in the early morning hours of July 2, Sen. Carroll made his traditional announcement that the General Assembly had adopted a budget "in balance with available resources." While the budget as passed by the legislature exceeded the amount proposed in March, Carroll said that the additions were largely due to higher reappropriations plus an unbudgeted revenue bonus of $74 million from the Exxon overcharge case. The general revenue funds portion of the legislative-approved budget was $104 million over the governor's original request, according to Carroll, who laid the blame on the governor. He said that since March the governor had allowed his agencies to increase their requests by nearly $130 million.

Money and promises

After the General Assembly passed the fiscal 1987 appropriations, revenue estimates continued to nosedive. The governor announced July 11 that he had cut 3 percent from every agency except the judiciary for a total of $353 million in general revenue funds spending. He explained he had to "bring the budget closer to the latest revenue forecasts for next year and save Illinois taxpayers $353 million." After the vetoes, total general funds spending of $11.060 billion would be supported by revenues of $10,994 billion, according to the BOB. (Details on the budget cuts will be reported in October's magazine.)

Senate President Philip J. Rock (D-8, Oak Park) immediately accused the governor of "operating state government through the back door." The administration's own budget estimates were $294 million too high, Rock said, and the governor failed to say "no" to his own agency directors' requests for more money.

The House and Senate will have to deal with the governor's vetoes when they return for the fall session, which is scheduled to begin after the November election.

Democrats in particular question whether the governor will be able to stick to the budget even after his cuts. "Will there be a tax increase May 1, June 1 or the day after the election?'' These words of House Speaker Michael J. Madigan (D-30, Chicago) are a Democratic reminder of Thompson's last reelection: He started his third term with a cry for tax increases. If there's a revenue shortfall, how can Thompson find all the money to fulfill any promises he made before the November election?

Sen. Carroll: dean of appropriations

THE appropriations process in the General Assembly moves to a smooth rythmn under the direction of Sen. Howard W. Carroll (D-l, Chicago), chairman of the Senate Appropriations I Committee. He's played the budget game for a record 10 years. With 16 years in the legislature, he has been around longer then Gov. James R. Thompson and his budget chief, Robert L. Mandeville.

Carroll, 44, shifted from revenues to appropriations 10 years ago because that is where "you really learn the operations of state government." He describes himself as a "balanced budget person," who is fiscally conservative but a moderate on policy. Those agencies and services that provide for people who are "in need" should get their fair share of state funding. Carroll said. That personal philosophy was evident in the list of agencies spared from cuts by his committee this year (see main story).

As the dean of the appropriations committees, Carroll wields much influence, yet his dedication to sound fiscal management has earned him the respect of his colleagues as well as the Thompson administration. A "decent" working relationship among all four appropriations committees has developed over the years, he said. Both sides of all four committees have more or less agreed to disagree, Carroll said, fighting over budget details, but coming to a consensus over the "bottom line."

Carroll is cautious about predicting whether Thompson's budget vetoes will hold or not. "It all depends on what the revenue stream is," he said. He anticipates that if revenues improve over the next three months, there will be restorations in November — worked out ahead of time with the administration. If revenues stay sluggish, he said, "What's the sense of an override?"

The rythmn of the appropriations process is reflected in the final outcome. Knowing that every line item will have to be accounted for, Carroll said, state agencies put together as "clean" a budget as possible, even before it gets to the appropriations committees. "They know we are watching," he said.

Nora Newman Jurgens

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