POLITICS

The governor's budget is a superb political document

by Charles N. Wheeler III

He gave lawmakers a clear choice on school spending by tying increases to higher taxes on lucrative riverboats.

For most people, a budget is a fiscal management tool — a plan intended to help match one's spending with one's resources during the coming month, or any other chosen time period.

For Illinois governors, though, a state budget is much more than a mere financial blueprint. It's also a political document crafted to advance the governor's agenda, frequently at the expense of the opposing party.

Consider, for example, former Gov. Dan Walker's first budget for fiscal year 1974. A corporate lawyer who affected a red bandana, blue work shirt and hiking boots to portray himself as a populist, Walker selectively manipulated the fiscal facts to exploit anti-income tax sentiment throughout his winning 1972 campaign against incumbent Gov. Richard B. Ogilvie.

Typical was the Democrat's relentless assault on the purported $600-million-plus of "waste" in the Ogilvie Administration, a charge Walker never fully documented.

When the new Democratic governor unveiled his proposed fiscal 1974 budget— surprise! — his request was $617 million less than fiscal 1973 appropriations, earning him favorable headlines in the afternoon Chicago papers.

Reading the fine print, however, one discovered that Walker achieved the magic $600 million figure not by cutting "waste," but by a number of fiscal tricks, like underfunding ongoing capital projects and downplaying welfare costs. In fact, under Walker's first budget, the state spent $400 million more than under Ogilvie's last.

A decade later, with the worst economic conditions since the Great Depression ravaging the state, then-Gov. James R. Thompson felt compelled in his fiscal 1984 budget message to propose the first-ever increase in income tax rates. At the time, the state faced an immediate $300 million budget gap for fiscal 1983; without new revenues, the governor said, another $800 million would have to be carved out in fiscal 1984.

To underscore the emergency, Thompson based his spending plan on existing revenues, slashing funding for dozens of popular programs and totally eliminating others. Faced with what some called a "Doomsday" budget, lawmakers responded by boosting income tax rates for 18 months and adding a permanent penny to the state sales tax.

Fast forward to 1996, and it's clear that Gov. Jim Edgar has taken a page from his predecessors' budget playbooks. On two notable fronts — riverboat gambling taxes and state construction projects — the $33.6 billion spending plan Edgar unveiled last month for the fiscal year starting July 1 is fashioned to promote his agenda.

In an address to the General Assembly, Edgar stressed the high priority accorded education, telling lawmakers not once, but twice, that "73 cents of every new dollar the state will spend will go to education."

But $67 million of the $332 million increase is to come from raising taxes on the state's most prosperous riverboats, as the governor proposed — and the legislature ignored — last fall.

In the budget, though, the governor tried to delineate a clear choice for lawmakers. "We are asking the millionaire owners of riverboats to share slightly more of their windfall profits with the state," Edgar said. "If my proposal to restructure state revenues from riverboats is not adopted, the increases in education funding will be cut, and our children will be shortchanged. I don't believe you will let that happen."

In challenging lawmakers on riverboat taxes, the governor played no political favorites; few legislators in either party have been eager to take up gaming issues in an election year.

On capital projects, however, Edgar sought to discomfit House Democrats, who last year would not support the borrowing needed to construct new prisons and other facilities.

This year, Edgar's building program includes a new adult prison and a new juvenile facility, as well as repairs at existing prisons. "To refuse to fund prison construction and upkeep is absolutely irresponsible," Edgar said. "You can't tell your constituents that you're tough on crime and not vote for additional prison space. Some of you have tried to do that, but we're not

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going to let you get away with it."

The budget message each year also gives a governor the chance to trumpet the accomplishments of his administration. For example, the most remarkable aspect of Edgar's fiscal year '97 proposal is something that's not even there — a huge Medicaid debt. Instead, the governor said, the state will be able to pay its Medicaid bills on time and cut in half a tax on hospitals that helps pay health care costs for the poor, saving hospitals some $100 million. "No old bills. No backlog," he said. "We will be current and paying our bills more quickly than the state has done in a dozen years."

The most remarkable aspect of the fiscal year 1997 budget is what's not there: a huge Medicaid debt.

The amazing recovery from a debt pegged at $1.4 billion two years ago is due to a variety of factors, according to budget officials: better than expected revenue growth, pared welfare rolls, cuts in adult medical services, increased use of managed care and increased federal reimbursements through pooled health care spending with Cook County.

Almost as noteworthy are caseload projections for the Children and Family Services department, which anticipates only a modest increase in the number of children being cared for in the homes of relatives, after several years of mushrooming growth. As a result, costs for substitute care are expected to stabilize, and the agency's budget request is only about 1 percent higher than current levels.

A cudgel to bring lawmakers into line on riverboat taxes and new prisons. A megaphone to tout the administration's success in curbing Medicaid and child care costs. At heart, Edgar's proposed fiscal year '97 budget is a superb political document.

Charles N. Wheeler III is director of the Public Affairs Reporting program at the University of Illinois at Springfield.

Illinois Issues April 1996 ¦ 47