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Politics

Critical, crowded agenda

Charles N. Wheeler III

By CHARLES N. WHEELER III

The platter is full, and it continues to grow.

Kirk Dillard, chief of staff designee for Gov.-elect Jim Edgar.

The agenda indeed is crowded and critical for the state's 38th governor and its 87th General Assembly as they prepare to take office. Republican Jim Edgar and the Democratic-led legislature face significant challenges, both politically and programmatically, that will demand ingenuity, cooperation and even a bit of luck to overcome.

The immediate burden falls on the incoming governor, who must assemble a cabinet including especially the critical appointments of a budget director and the heads for the major human services departments and begin to transform the rhetoric of the campaign into the reality of a new administration.

Legislative leaders, meanwhile, are girding for the upcoming redistricting struggle with its incredibly high stakes: potential control of the General Assembly into the 21st century.

Of paramount concern both for Edgar and for lawmakers, though, must be the state's fiscal condition, which to a large degree will determine how much leeway they have in dealing with high priority concerns like education, property tax relief and health care and other human services. As national economic indicators provide a steady drumbeat of bad news, Illinois is seeing the first signs of recession: rising unemployment and growing welfare caseloads. Meanwhile, budget watchers anxiously await the figures for Christmas sales tax returns and corporate quarterly income tax payments expected early this month as an initial gauge of how deep the economic downturn might cut into state revenues.

Heading into the New Year, the consensus seemed to be that the current situation was not as dire as during the recession of eight years ago. Then, lawmakers voted Gov. James R. Thompson emergency budget-cutting powers to keep the state afloat, ultimately until income tax rates were raised in the 1983 session.

Still, Edgar and others warn, belt-tightening is needed in the current budget, and cuts are inevitable in the next. The question is: How deep must they go? Assuming the Budget Bureau's fiscal 1991 spending plan plays out perfectly, an additional $280 million in either new revenues or dollars pared from current programs will be needed in 1992 just to tread water. That's the amount that spending obligations incurred this year are projected to outstrip revenues, with the gap closed by drawing down the general funds available balance and by stalling payments to Medicaid providers and others.

These one-time Band-Aids would be difficult if not impossible to repeat in the new budget. Moreover, the Budget Bureau scenario is based on revenue projections some $113 million higher than those of the legislature's forecasting arm, the Economic and Fiscal Commission. Add to that some $50 million more to staff new prisons and another $230 million in additional costs that Thompson budget officials estimate will be required by state law federal mandate, and the task becomes truly daunting.

This budget overview assumes the current temporary 20 percent income tax increase is continued, instead of expiring as scheduled on July 1. While this presumption seems reasonable, it's no certainty. Extending the surcharge likely will require a bipartisan deal among Edgar and legislative leaders. A major unknown, ironically, is whether the new governor can produce the requisite number of GOP votes on the structured roll call; only nine of 79 Republican lawmakers voted for the surcharge when it was enacted in 1989.

While Edgar supported the surcharge extension during the campaign, he also promised there would be no other tax increases during the next four years. Perhaps politically sound, the no-new-taxes pledge

8/January 1991/Illinois Issues


would seem to leave the incoming governor's hands tied if true fiscal calamity strikes. Consider the response when Edgar suggested increases in some taxes could be termed "user fees" if the proceeds financed related programs, such as higher cigarette taxes going for lung cancer research. If the new governor was looking for "wiggle room" in his pledge, as some speculated, the venture seemed futile. Such earmarked nickel-and-dime tax hikes would afford little relief for the general budget crunch; criticism of his ruminations, meanwhile, was sharp and quick, suggesting serious political risks in the approach.

Under such tight fiscal constraints, what can be done for education and for beleaguered real estate taxpayers? The most logical reform replacing local property tax dollars with state income tax dollars as the major source of school financing must be ruled out; such a major shift would require income tax increases well beyond the surcharge. More modest advances could be achieved, however. One possibility might be to shift to education a portion of the surcharge receipts now going to local governments; perhaps the remaining city and county share could be tied to proportionate property tax abatement.

Enacting property tax levy limits, as Edgar proposed during the campaign, could help hold down real estate tax bills in areas of rapidly rising property values. And while improved assessment practices would not necessarily mean lower taxes, property owners might derive some comfort from knowing the system was fairer and more equitable.

Meanwhile, a host of other issues clamor for attention; unfortunately, in most cases it's hard to imagine how real progress can be made without investing state dollars that aren't likely to be there. The partial list could include providing adequate and accessible health care in the inner city and in rural areas, developing the state's human capital through enhanced job training and welfare-to-work efforts, upgrading the mental health service delivery system and relieving prison overcrowding. All are difficult challenges, and most have been chronic problems for years. Now they'll test a new governor and legislature, with the state's welfare riding in the balance.

Charles N. Wheeler III is a correspondent in the Springfield Bureau of the Chicago Sun-Times.

January 1991/Illinois Issues/9


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