By DIANE ROSS

Thompsonomics and the 1982 budget

GIGANTICUS INFLATIONUS has jerked the S.S. Illinois off course again — right into the path of the Great White Whale of Washington. But don't put your life jackets on yet, dear readers. In what has become his smoothest move, Capt. James R. Thompson has wrenched the S.S. Illinois back on course again.

When Thompson unveiled his fiscal 1982 budget in March, you may remember, he described it as a "hold-tight, hold-fast budget. . . . nothing is symbolic, everything is bottom line survival."

Fiscal 1982 marks Illinois' third year under recession. But because it takes state government longer than the state in general to feel the effect, fiscal 1982 marks the first year Illinois has had to cut its budget in order to balance it. Thompson said that meant that spending in the crucial general funds, which went up 12 percent in fiscal 1981, could go up only 5.5 percent in fiscal 1982.

The recession, then, and Reaganomics, had forced the good captain to cut the ship of state to half speed, but he intended to keep it on course at all costs. "[T]his budget does not cut back," he said then. "It moves Illinois forward."

This then was Thompsonomics: cutting the increase in general funds spending — but not the spending itself. And the only alternatives to this "Hold-tight, hold-fast" yet "move ahead" budget, Thompson told the General Assembly, were to raise taxes or to bankrupt. He didn't have to tell the Democrats that neither alternative would win any votes in 1982.

That was the story in March, the third quarter of fiscal 1981.

On April 22 Thompson cut $221.9 million from some areas but added $121 million of it to others. On May 11 he cut another $35 million. By June 30 the General Assembly had all but rubber stamped this drawn and redrawn bottom line budget, sending Thompson a record-setting package of appropriations bills. For the first time in recent memory the legislature had appropriated less than the governor had budgeted. The General Assembly had appropriated $42 million less than Thompson's revised April budget, $263 million less than his original March budget. Still, that was not enough. On July 20, Thompson cut yet another $369 million.

But it was just another chapter in the same old inflation-driven-recession book. By July projections showed that sales tax revenue would go up only $141 million in fiscal 1982, not the $253 million estimated in March, chiefly due to the recession and tax relief. By July projections also showed that welfare spending would go up over $200 million in fiscal 1982, not the mere $170 million estimated in March, chiefly due to the recession. In other words, the $112 million revenue decrease coupled with the $30 million spending increase, had unbalanced the budget by $142 million. Only cutting the budget could rebalance it. Under Thompsonomics that meant cutting the increase in general funds spending — but not the spending itself. In March the budget showed that spending in the crucial general revenue funds would increase $456 million or 5.5 percent in fiscal 1982. In July, despite the cuts, the budget showed that general funds spending would increase $263 million or 3.5 percent.

That was the story in July, the first quarter of fiscal 1982.

So thus far, Thompson has made a gross cut of $626 million or 4 percent from his March budget for all funds. (That's a net cut of $284 million or 3 percent for the crucial general revenue funds.) The bottom line on Thompson's budget, his so-called survival point, has dropped: from $14.934 billion in March to $14.712 billion in April to $14.670 billion in June (General Assembly action) to $14.302 billion in July. (For the general funds from $8.803 billion to $8.244 billion to $8.303 billion to $8.058 billion.)

And that's produced another phenomenon. For the first time in recent memory, appropriations for all funds for the current year will be less — $371 million less as of July 20 — than those for the preceding year. The General Assembly, as usual, will vote supplemental appropriations this fall and next spring. But under the Thompson administration, supplemental have never exceeded $250 million and they've sometimes fallen under $150

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million. So fiscal 1982's record for low appropriations will remain intact.

You may be wondering, dear readers, just what the bottom line of Capt. Thompson's budget really is. Just when will the S.S. Illinois really reach the so-called survival point? Just when will Illinois really face higher taxes or bankruptcy?

The answer lies in Thompsonomics, the policy of cutting but not cutting. Thompson may have cut $284 million in crucial general revenue funds spending. But remember, that's only $284 million of the increase in the spending, not the spending itself. And there's still another $263 million of the increase left.

Presumably the bottom line lies beneath this increase. Presumably the ship of state will reach the survival point when the good captain cuts the remaining $263 million. Presumably then — and only then — will Illinois really face higher taxes or bankruptcy.

Will Capt. Thompson cut to the quick? Probably. He's already jettisoned programs with a thoroughness that suggests he's willing to strip the S.S. Illinois to the bare boards if necessary.

Will the General Assembly crew continue to cooperate in such record-setting style though? Maybe not. Thompson's endless stream of bottom line/bankruptcy rhetoric isn't building credibility — even with the Republicans.

Last spring it was Thompson who had the power to draw this spending blueprint according to his own priority dimensions. Then, the General Assembly really had no choice but to accept it or reject it in total. And last summer it was Thompson who had the power to cut the budget line item by line item, according to his own priorities, by amendatorily reducing the appropriations bills as they reached his desk. But now the General Assembly has a real choice: they can override or accept each budget cut on a case by case basis during the veto session this fall.

When the fall session begins October 1, the 1982 elections will only be a year away. Thompson's record as governor, not to speak of his growth as presidential timber, hangs on that election. By election day Illinois may finally face higher taxes or bankruptcy. And the Democrats would love nothing better than to watch the good captain decide whether to walk the plank or go down with the ship.

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