The state of the State
Budget is sure to be labelled 'political'
THE DATE set by law for the governor
to submit his budget to the legislature is
the first Wednesday in March — March
3 this year. The budget will be for the
fiscal year beginning July 1, 1976, and
ending June 30, 1977. By then, Gov.
Dan Walker may no longer be governor,
but he will have set the fiscal course of
the state — that is, if the legislature
enacts the budget he proposes. Because of the impending primary
election Tuesday, March 16, less than
two weeks after budget submission, this
budget will be viewed and interpreted as
a campaign document. The primary
finds Walker pitted against Sec. of State
Michael J. Howlett. Howlett is supported by the strong Chicago-Cook County
Democratic organization. This is the
organization which four years ago
supported Paul Simon (now a congressman from Carbondale) against Walker. In a year when public finances are
particularly highlighted, the budget
message will give Walker a large audience. If he follows form, he will make
the most of this opportunity. Not since 1936, when Gov. Henry
Horner faced and defeated a primary
candidate supported by the Chicago
Democratic organization, has there
been a similar situation in Illinois (see
Elections, p. 12). Budgets were for
biennial periods in Homer's time, and
the legislature held a regular session
only in the first half of the odd-numbered years. Consequently the
budget was disposed of in 1935, a year
before the primary. Appropriations
totaled $389 million, a fraction of state
spending today. It was not until the
administration of Gov. Dwight H.
Green that appropriations topped one
billion dollars. In the 1948-49 biennium,
appropriation bills totaled almost $1.4
billion and reflected a surge of postwar
spending that drew on a surplus built up
during World War II. Table 1 provides information on
appropriation totals as recommended in
budgets for the last 20 years. It shows
that Illinois has been accustomed to
substantial increases from one budget to
the next, particularly with respect to the
appropriations financed by the general
revenue and school funds. The most
marked increase came when Illinois
shifted from its last biennial budget,
1968-69, to the first annual budget in
1970. But this increase came about not
because of the shift to annual budgets,
but because of the adoption of the state
income tax in 1969, becoming effective
August 1, bringing in additional revenues.
Table 1. State budget totals, 1956-76 (in millions of dollars)
Recommended appropriations
|
|
|
General |
All |
|
Governor |
|
(biennial budgets) |
|
|
Stratton |
1956-57 |
$ 934 |
$1,710 |
|
" |
1958-59 |
1,076 |
2,244 |
|
" |
1960-61 |
1,356 |
2,702 |
|
Kerner |
1962-63 |
1,625 |
3,493 |
|
" |
1964-65 |
1,943 |
3,890 |
|
" |
1966-67 |
2,472 |
4,374 |
|
" |
1968-69 |
3,655 |
5,712 |
|
|
|
(annual budgets) |
|
|
Ogilvie |
1970 |
$2,907 |
$ 4,447 |
|
" |
1971 |
3,085 |
4,948 |
|
" |
1972 |
3,560** |
5,987 |
|
" |
1973 |
3,931 |
5,532 |
|
Walker |
1974 |
4,163 |
7,028 |
|
" |
1975 |
4,478 |
7,886 |
|
" |
1976 |
5,403 |
10,751 |
|
Table 2. General fund finances, 1970-76 (in millions of dollars) |
|||
|
Fiscal |
Available |
Amount |
Closing |
|
years |
resources |
spent |
balance |
|
1970 |
$2,650 |
$2,550 |
$100 |
|
1971 |
3,160 |
3,140 |
20 |
|
1972 |
3,627 |
3,571 |
56 |
|
1973 |
4,073 |
4,051 |
22 |
|
1974 |
4,589 |
4,303 |
286 |
|
1975 |
4,919 |
4,864 |
55 |
|
1976 |
5,333* |
5,333* |
0 |
|
*Asestimated in Governor's Office, An Accountability |
|||
|
Budget for Illinois/ Fiscal Year 1976, p. 326 |
|||
The critical figure in the state budget
is not, however, the all-fund total, but
the figure for the general fund, including
the common school fund. Two-thirds of
the general fund appropriations go for
two purposes: public aid and education.
The fund is financed primarily by the
income and sales taxes and federal aid.
The problem here is that, in a time of
widespread unemployment, public aid costs rise but revenues from the income
and sales taxes do not keep pace with the
rise. In addition, there is now a commitment by the state, expressed in the new
Constitution: "The State has the primary responsibility for financing the
system of public education" (Art. X, sec.
1). Meeting this commitment calls for
increasing state aid to local schools. As
this occurs, the pressure to increase local
property taxes should decrease, so the
move is a popular one; but raising state
taxes to fulfill the obligation is not
popular.
Table 2 shows the trend of general fund spending in the 70's. Available resources are amounts available at the beginning of the fiscal year plus income during the year. The closing balance shows how much was left after all the bills for the year had been paid. The figures for 1976 are predictions in the budget submitted last year. As shown, the budget predicted a closing budgetary balance of zero. "Budgetary balance" is an accounting concept; "cash balance" is how much is actually on hand in the treasury. But the two are closely linked together and the fact, as Comptroller George Lindberg has been reporting, that the cash balance in the general fund has been dangerously low ($12 million at the end of December 1975) means that the governor faces a critical situation unless there is a strong economic upturn reducing public aid costs and increasing tax revenues.
March 1976 / Illinois Issues / 23