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There was little to comfort state lawmakers when they came to Springfield for the spring legislative session. Of the 177 state lawmakers, all but 45 were getting ready to run for election to the 88th General Assembly. All were running in new districts drawn by Republican map-makers. With unfamiliar territory and future new constituents, lawmakers of both parties were uncomfortable throughout the spring. At the same time, incumbency was beginning to lose its luster. Ross Perot's polls were soaring, and U.S. Sen. Alan J. Dixon was getting ready for retirement. And, the state was broke, even after cutting spending the year before and again in January. Uncomfortable lawmakers are not likely to stake out bold new positions. Few did. Three factors drove the spring session. First, few lawmakers were going to risk voting to increase taxes. Second, no one was going to be accused of cutting education spending. Third, no one wanted to look ineffective by running much past the session's June 30 deadline and repeating 1991's marathon 19-day overtime ordeal. Adoption of a budget for fiscal year 1993 (July1, 1992, to June30,1993) consumed lawmakers energies and riveted public attention for most of the spring. Lawmakers confronted spending demands that far outstripped the money that would be available to spend. Despite spending cuts in January and July of 1991 and again this January, on May 30, the comptroller was holding $654 million in bills she could not pay because the state lacked the cash. The budget that Gov. Jim Edgar proposed in April increased spending modestly. The governor sought to allocate more money for the Department of Children and Family Services, where a consent decree that settled a federal court suit will require increased spending. Also proposed were spending increases for mental health and for prisons, both worker-intense services whose budgets were driven by negotiated salary increases. Money was included to open partway through the year a new prison, four work camps and a half-way house in Chicago. Edgar sought to increase elementary and secondary education spending by $30 million. Virtually every other agency was cut in Edgar's budget. All told, Edgar proposed a $120 million increase in general funds spending. Because of the large amount of one-time revenues in the fiscal year 1992 spending plan, he needed $725 million in new revenues to support $120 million in new spending for fiscal 1993. The governor's $725 million increase in revenues assumed $306 million in "natural revenue growth," the economy and inflation-driven annual increase in receipts; another $237 million by state takeover of local governments' promised share of the income tax surcharge; and $182 million from an increase in the liquor tax, a new tax on tobacco products and other tax law changes.
The attempted grab of local governments' share of the 1989 surcharge was a high-risk gamble. The surcharge had originally been proposed and passed to help close a Chicago budget gap. Last year when Edgar had proposed that the state and local governments split the surcharge revenue, he ended up with a negotiated compromise, reducing the local share in fiscal 1992, then increasing it in fiscal 1993. Edgar's new taxes drew virtually no support. Speaker Michael J. Madigan (D-30, Chicago) put all of Edgar's tax and fee increases on two bills and called them for a vote on May 19. The measures got only two "yes" votes, but Edgar did not give up, maintaining repeatedly that the small tax increases would be less painful than spending cuts. Thereafter, the name of the game was budget cuts, but the "normal" appropriation process fell by the wayside. Madigan targeted cuts to state operations, jabbing regularly at Republican bureaucrats and charging that the pain should be spread to Springfield and Chatham (a Springfield suburb) and not solely borne by the poor. House Democrats cut $200 million from the budget bills that had originated in the lower chamber. As usual, half the budget originated in House bills and the other in Senate bills. Over in the Senate the process did not go so smoothly. Senate Republicans chose not to move their budget bills before the late-May deadline, with Senate Minority Leader James "Pate" Philip (R-23, Wood Dale) imposing a "cooling-off period." Senate Democrats failed to move their own budget bills. By late May the House had passed its half of the budget to the Senate on a largely party line vote, but most of the Senate's budget bills remained bottled up there. Into the vacuum plunged House Republicans who characterized their Democratic colleagues' efforts as "grounded in unreality" and instead offered a plan they said would preserve vital services. House Republicans replaced much of Madigan's budget cuts with revenue revisions. August & September 1992/Illinois Issues/39
The House GOP plan included: • Ending the year with $100 million instead of $200 million. • Increasing revenue estimates by $90 million, based on higher projections by legislative revenue forecasters. • Holding local governments' share of the 1989 income tax surcharge at its fiscal 1992 level, circumventing an $80 million increase slated for fiscal 1993. • Projecting a 3.2 percent decline in welfare caseloads, saving $24.1 million. As the House continued to act on the budget, state agency directors issued dire warnings: Howard A. Peters III, director of the Department of Corrections, warned that the House cuts would endanger staff and invite court takeover of the prison system. Terrance W. Gainer, director of the Illinois State Police, said that with budget cuts and without early retirement for his agency, "We will be forced below the critical minimum level of service to Illinois citizens." Philip C. Bradley, director of the Department of Public Aid, urged approval of Edgar's "Healthy Moms, Healthy Kids" initiative. "The choices between well babies and sick babies, between lower medical costs and high costs are simple from my perspective," Bradley said. Edgar himself got into the act, describing the House Democrats' cuts as a "meat ax approach." The governor said that Democrats chose the wrong priorities, sidewalks and buildings for cities, while he favored human services. "My priorities are abused kids and others in our society who have special needs," Edgar charged. Madigan was undeterred. He continued his attacks on Edgar and moved to take the offensive, in the process labeling the House GOP plan as "budget gimmicks." On June 17 Madigan put the entire state budget on two bills and moved them out of the House with 62 Democratic votes. In those two bills, there were $372 million in cuts and a lot of pain. By Madigan's count the plan would have laid off 1,800 workers, eliminated 1,000 proposed new jobs and 600 vacancies. Madigan included no funding for the built-but-unopened prison at Mount Vernon or for four prison work camps. His plan returned spending levels for the Department of Children and Family Services and the Department of Mental Health and Developmental Disabilities to their fiscal 1992 budget levels. It kept education funding, however,at Edgar's proposed level.
Edgar renewed his attack on Democrats' priorities. He accused "the speaker and his minions" of giving money to cities to build sidewalks and buildings while those with developmental disabilities are being needlessly warehoused in state institutions. "The issue is what kind of downsized government are we going to have," Edgar maintained. But Madigan had set the tone for the rest of the budget debate. His budget plan became the starting point for future negotiations. Throughout the spring Madigan would point out that only the House Democrats' budget had received lawmakers' approval — at least in the House. Although Madigan's budget plan offered a solution to the state's fiscal problem, it had a major flaw. The Senate would not approve his spending cuts. So talks began in earnest, with a goal toward finding money to restore some of the cuts approved by the House. There are two ways to close a budget gap. Either revenues can be increased or spending can be cut. Lawmakers considered everything except higher taxes or fees. 40/August & September 1992/Illinois Issues
August & September 1992/Illinois Issues/41
One way to increase the money available for spending is by raising estimates of the revenue that current taxes and fees would produce in fiscal 1993. As lawmakers headed into the final days of the session, the legislative forecasters of the Illinois Economic and Fiscal Commission projected that revenues for fiscal 1993 would be $176 million higher than estimated by the governor's Bureau of the Budget. The bureau had admittedly used conservative revenue estimates in putting together the fiscal 1993 budget. But since fiscal 1992 revenues fell $500 million (3.4 percent) below original estimates,prudence seemed appropriate. The governor found a Democratic ally in Comptroller Dawn Clark Netsch, who called the upward revision of revenue estimates inappropriate. "I just strongly, strongly disagree with the legislature, and now the governor apparently, in revising their figures upward," Netsch said after Edgar agreed to higher estimates. Another way to raise money is by borrowing it. A group of downstate Senate Democrats, led by Revenue Committee Chairman Richard Luft CD-46, Pekin), proposed a plan that included issuing up to $155 million in bonds for local government capital projects. The bond money was to replace the surcharge money local governments would lose under Edgar's plan. The state would have paid off the bonds over 20 years at $15 million per year. That the plan to bond for an operational expense (provided you consider closing the budget gap a state operational expense) got serious consideration was a mark of the desperation that lawmakers faced in trying to balance the budget. When the bond plan was raised in a June 23 meeting of the governor and the leaders. Senate Minority Leader James "Pate" Philip OR-23, Wood Dale) called it a "walk in the right direction." Gov. Edgar defended it as bonding for local capital spending. Speaker Madigan decreed, "It is something that the state of Illinois should not do, and what we should do is get about the business of reducing state spending." At that June 23 summit, Edgar offered to back down from his push for a liquor tax if lawmakers would agree to hold local governments' share of the income tax surcharge at the fiscal 1992 level. The 1991 budget compromise had called for local governments to get $157 million of the surcharge money in fiscal 1992 and $237 million in fiscal 1993. Democrats did not bite, charging the trade was not viable since the liquor tax increase would not pass. The June 30 date for scheduled adjournment moved inexorably closer. Madigan held to his position that the House budget cuts of $372 million should prevail, taking every opportunity to throw barbs at Edgar as he 42/August & September 1992/Illinois Issues had all spring. A litany that Madigan offered on June 25 was typical: "We are not in favor of Mr. Edgar's five taxes. We do not want to spend as much money as Mr. Edgar wants to spend. We do not want to spend money that the state does not have. We do not want to cook the books and thereby endanger the credit rating of the state of Illinois once again." As Madigan made his pitch for spending cuts and jabbed at Edgar, the governor began to reemphasize the difference in priorities. Following a late night meeting of the governor and the leaders on June 29 — a session that Madigan characterized as "a group of people talking in circles" — Edgar remade the point: "Mike Madigan is not spending one dollar less than I'm proposing to spend." In late June the priority was clearly to restore some of the cuts for children's services, mental health and for prison spending, and on June 30 came the break in the budget impasse. Senate President Rock and Senate Minority Leader Philip put their heads together on restorations, and Rock took a plan to Madigan. Rock and Madigan announced the broad outlines of the agreement, adding back $210 million to the House Democrats' budget cuts. House Minority Leader Lee A. Daniels (R-46, Elmhurst), shut out of the final compromise, objected. But Edgar said that he would go along with the plan that increased revenues $210 million to restore cuts.
The new revenues included:
The big winners among the $210 million in restorations were: Department of Corrections, $40 million put back into its budget; the Department of Mental Health and Developmental Disabilities, $36.1 million restored; Central Management Services, $37.5 million restored, most for public employees' health insurance; the Department of Children and Family Services, $20 million (half the original House cuts) restored; and State Police, with $14 million restored. The budget was approved in the Senate on July 1, but not before it was blasted. "This is not managing government; this is a mean-spirited political gamesmanship," Sen. Jack Schaffer (R-32, Carey) complained. Sen. Roger Keats (R-29, Kenilworth) labeled the measure a fraud: "We all know the budget isn't balanced. We all know."
House approval came a day later, after the session bogged down over the issue of how to tax hospitals and nursing homes to provide funds for the Medicaid Assessment program. (See "Financing Medicaid by new tax on health facilities," pages 18-20 and 23.) After the House adjourned, Edgar described the budget as "generally acceptable" but warned of potential problems in delivering services. He said the budget continued his effort to downsize state government, and it preserved education funding. "During the next year, people in all parts of Illinois are going to become aware of the shortcomings of this budget," Edgar said.
Downsizing government is a popular concept, and previous budget-cutting efforts have earned voter support. The fiscal 1993 budget includes extensive cuts. When spending deferred from one year to the next is accounted for, spending will decrease, compared to the previous year, for only the second time in the last 20 years. The current round of cuts will be more visible than the previous three made by Edgar. Citizens will see less government. They will also see fewer services. If voters decide that they are getting less government than they want, lawmakers in the 88th General Assembly can have a more comfortable spring adding new programs.
August & September 1992/Illinois Issues/43
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