Politics

By CHARLES N. WHEELER III

Harpoons fired at budget

LIKE a cadre of modern-day Cassandras, Democratic politicians from Adlai E. Stevenson III on down are finding cause for alarm in the $20.1 billion budget Gov. James R. Thompson proposed for the fiscal year starting July 1.

Showing the greatest prescience was Stevenson, who hopes the budget-making task will be his next year. He issued his critique of Thompson's plan fully a day before the governor disclosed it, warning that his Republican rival would claim to be offering a balanced budget that in reality was askew. "He will be rounding out a decade of deception," chastised the Democratic challenger. "He will attempt to hide the fact that Illinois will not be able to pay for both Build Illinois and other state services such as education."

Though House Speaker Michael J. Madigan (D-30, Chicago) was a trifle slower in chiding Thompson — he waited until after the governor's March 5 address to a joint session of the legislature — his premonitions were more precise. "The only real question to be answered is when will the governor propose a tax increase," declared Madigan, who these days doubles as Chief Mate Starbuck to Stevenson's Captain Ahab. "Will it be May 1, or June 1, or the day after the election?"

The chorus of qualms was joined by lesser Democratic luminaries, proclaiming their concern that the governor's revenue estimates were too optimistic, that he failed to take into account looming cutbacks in federal aid, that he was spending too much yet not enough money this year.

Among prominent Democrats, only Senate President Philip J. Rock of Oak Park eschewed doom-and-gloom pronouncements. A habitual statesman, Rock judged Thompson's plan to be "lean but acceptable" if the governor's assumptions prove correct.

Rock aside, it was a performance calculated to strike terror into the heart of the most jaded bean-counter. Assuming for the moment that Stevenson and the crew of his political Pequod are sincere, which would seem to require what Coleridge called "the willing suspension of disbelief," are their fears well-founded? Let's consider them, one by one.

Can the governor pay for both the second year of Build Illinois, his massive public works program, and the second year of Teach Illinois, the sweeping overhaul of the state's public schools? In claiming that he cannot, Stevenson pointed to actual receipts that are lagging behind projected revenues from the new tax on private used-car sales intended to help finance Build Illinois, causing a deeper drain on the general funds which support education and key human services. Indeed, the budget acknowledges the shortfall, predicting revenues of only about $51 million from the new levy next year. But most Build Illinois projects are to be funded by bond sales; debt service and nonbondable items amount to only about $75 million, meaning only about $24 million will be siphoned from an estimated $11.2 billion in general funds receipts.

And although state schools Supt. Ted Sanders tempered his enthusiasm for the $250 million increase in school spending with the caveat that it wouldn't fully pay for all the new reform programs, Thompson claimed it met the deal he struck last year "to the penny."

Is "deception too mild a word" to use in discussing Thompson's budget, as Madigan charged?

Like Stevenson, the speaker accused Thompson of fiscal chicanery, citing a handful of "accounting gimmicks" that proved the proposed budget was not balanced. The speaker knocked the governor for "a slowdown in bill payments" amounting to some $385 million (Stevenson pegged "deferred spending" at $430 million) and for not spending another $360 million in current year budget authority.

Shorn of political wool, the "slowdown" and "deferred spending" are nothing more than the standard practice of paying late-arriving bills during the three-month lapse period following the end of a fiscal year. And should Thompson decline to spend $360 million of the $6.7 billion in current appropriations from general funds, thus lapsing 5.4 percent, it would be a lower percentage than the 7.2 percent Stevenson lapsed from his operations budget in his last full year as state treasurer (and he, too, paid bills during the summer of 1970).

Is the budget balanced? If Thompson's economic assumptions, including his resolve not to spend every dime this year, are accepted, the answer is yes. Under its recommendations, the state would begin and end fiscal year 1987 with $220 million in its general fund, and that had been a generally accepted yardstick of a balanced budget before this election year.

But are the governor's revenue estimates on target? Or, in other words, is the Budget Bureau's crystal ball more reliable than the Economic and Fiscal Commission's tarot deck? Ah, if one could but answer that question with certainty, a life of ease would beckon after just one trip to the racetrack. On budget day, though, there were at least enough good omens, like falling oil prices, tumbling interest rates, a soaring stock market and bullish national forecasters, to make Thompson's predictions plausible.

Let's suppose that Stevenson is correct and there is a hole in the proposed budget. What should be done to close it? Deafening silence has been the standard Democratic response.

It's precisely at this juncture where Captain Ahab and Co. become tangled in the party line and Moby Jim paddles away, for there are only two options available to close a budget gap of the magnitude envisioned by Democratic soothsayers: raising taxes or cutting big-ticket spending items like education or welfare, already the most obviously flawed portion of Thompson's plan because of his failure to provide even a modest cost-of-living adjustment for public aid recipients. Neither option has many promoters during election season.

2/April 1986/Illinois Issues