The Governor's Budget address...what to anticipate

[Guest guest]

This is really going to be a tough year.

Ellen

By DOUG FINKE (doug.finke@...)

THE STATE JOURNAL-REGISTER

Posted Mar 06, 2010 @ 11:30 PM

In good times, an election-year budget speech can be a boon to a sitting

governor, a chance to outline new or expanded state programs and how they will

help make the state a better place to be.

These are not good times.

The budget address Gov. Pat Quinn delivers at noon Wednesday will instead focus

on how he believes the state should cope with a record-setting deficit and a

still-sluggish economy that isn't strong enough to bail the state out of its

problems.

The proposed solutions won't be easy to take -- not for taxpayers, not for

people reliant on state services and not for the lawmakers who must decide on

the best way to plug a $13 billion hole in state finances.

Here are five things to consider as Quinn prepares to deliver his spending plan

for state government.

Lawmakers

To satisfy the lawmakers who eventually will have to act on Quinn's budget

recommendations, the governor will have to walk a careful line.

On one hand, the General Assembly wants to hear Quinn deliver an open and honest

appraisal of where the state stands financially. A year ago, many lawmakers grew

frustrated with Quinn as the session proceeded, believing he would make a dire

announcement one day only to backtrack a few days later.

" I would hope and I expect we're going to hear a very frank, honest speech, "

said Sen. Sullivan, D-Rushville. " No theatrics. Lay out what the situation

is. "

But, Sullivan added, Quinn shouldn't get too carried away.

" I don't want it to be scare tactics, " Sullivan said. " I want it to be real and

not over the top. "

But Quinn's speech will of necessity contain much news that lawmakers would

rather not hear.

" I think it's going to be a devastating year, " said Sen. Koehler,

D-Peoria. " Education was a sacred cow in Springfield, but we are going to see

cuts in education like we've never seen before. "

Quinn has made it no secret that he thinks the state needs more revenue to climb

out of its hole.

" What I expect to hear is he wants us to raise taxes and here's all of the hurt

that's going to happen if we don't, " said Sen. Dale Risinger, R-Peoria. " That's

not going to go anywhere. "

Providers

Quinn's budget speech will be eagerly awaited by the people who rely on state

funding, whether educators, businesses that sell goods to the state or the

social service providers who provide the network of programs for Illinois'

neediest residents.

" What I'm hoping to hear is that there are no further cuts in the budget for

disability services, " said Don Moss, longtime lobbyist for human service

organizations. " What I expect to hear is the governor may want to put on notice

that, without a tax increase, cuts will be made. "

Schainker, executive director of Senior Services of Central Illinois, said

she hopes there won't be additional cuts, but she also would like the state to

stick to whatever budget it adopts. The state owes Senior Services more than

$400,000.

" Eventually we will crack at the seams, " Schainker said. " We have to have a

budget and stick to it. We need a definitive idea of when we will get paid so

we're not always chewing on nails. "

Greg O'Connor, director of vocational services for SPARC in Springfield, said

that if Quinn is still interested in pursuing a tax hike, the governor must try

to show the downside of no new revenue.

" That means cuts, " O'Connor said.

He also said he's heard talk that lawmakers will settle for a short-term

solution that will get them past the election in November.

" That makes it really difficult to embark on programs, " O'Connor said. " At some

point, it also takes a toll on staff. If they always know their longevity is six

months, that wears on staff. "

Revenue

Revenue doesn't mean just money from taxes. Quinn budget director Vaught

said part of the administration's strategy for closing the deficit will include

both a push to secure additional federal funds and strategic borrowing in cases

where loans are less costly than penalties for late payment of bills.

But Quinn also continues to believe the state needs to raise the income tax, and

many lawmakers fully expect that to be part of his budget plan. Quinn previously

pushed for a 50 percent increase in the income tax rate, coupled with higher

deductions that would spare many taxpayers from seeing any increase.

But many lawmakers believe no tax hike will pass during the spring session,

since a major election is on the horizon.

" I do not see the appetite to do a tax increase during the spring session, "

Sullivan said.

Rep. Mautino, D-Spring Valley, called it " irresponsible across the board "

that lawmakers have ducked a tax increase so far. However, he agreed that a tax

hike won't pass this spring and said Quinn should present a budget that reflects

that.

" I would hope he would acknowledge that (a tax hike) is not passable and this is

the budget we are left with, " Mautino said.

Preliminary figures show the state can't count on much help from an economy

struggling to climb out of a recession. Income taxes, both personal and

corporate, along with sales taxes, provide the bulk of state revenue. During the

current fiscal year, they are expected to raise just under $16 billion; next

year, about $16.5 million. The $500 million increase isn't much in the context

of a $24 billion budget. It is also nearly $3 billion less than those taxes

produced just three years ago.

Spending

The Quinn administration put out some broad budget outlines more than a week

ago, along with a plea to the public for suggestions on dealing with the

deficit.

Quinn's numbers show projected spending from what are known as the state's

general funds to drop from about $26.2 billion to $24.1 billion. (The general

funds come mainly from general state taxes such as the income and sales tax. The

general funds budget pays for the most common state services, like education and

prisons, and it is the budget lawmakers have the most control over).

Quinn's budget outlines project reductions in spending for education, human

services, economic development and public safety. The only category of spending

that shows even a slight increase is for health-care programs.

Details of where those cuts will fall weren't put out by the administration last

week. Mautino expects the plan Quinn presents this week to closely follow the

outline.

" I'd expect general state aid (to schools) to be cut by 10 percent, " Mautino

said, based on preliminary figures he's seen.

Whatever Quinn recommends, " they have to be real cuts, because many people don't

believe that enough cuts have been made, " Mautino added.

" There's going to be hurt, there's no way around it, " Risinger said. " We've got

to have agreement to stop spending in new and expanded programs. "

What's next

After Quinn delivers his speech, it will be up to lawmakers to sort through it

and craft a spending plan for the fiscal year that starts July 1.

" Any budget that is introduced, close to 97 percent of it is what finally gets

passed, " Mautino said. " If the numbers are not inflated by assuming a tax

increase is going to pass before May, then he'll get pretty much what is in (the

budget speech). "

But lawmakers also acknowledge talk of simply cobbling together a spending plan

designed to get the state through the end of the calendar year. Lawmakers could

then raise taxes without immediately having to face voters.

Around the Capitol, this option is usually dubbed a six-month budget, although

that's really a misnomer.

" We'll allocate 100 percent of the money we expect to have, " Mautino said. " It

just happens to fill out only half of the need. "

Under that approach, instead of specifying where each dollar should be spent,

lawmakers would give Quinn broad authority to allocate funds, just as they did

to a limited degree this year.

" That would be irresponsible and shirking our duties, " said Rep. Jim ,

R-ville. " I would say that didn't work out very well for us this year. "

There's also the danger that the state would spend too much money too early in

the year.

" Spending too early sets us up for a complete breakdown of the social service

and state service network, " Mautino said.

Doug Finke can be reached at 788-1527.

***

Here are some broad budget numbers released by the administration in advance of

Wednesday's budget speech. All figures are projections.

Revenue

*Sales, personal and corporate income taxes:

Current year -- $15.9 billion. Next year -- $16.5 billion.

*Federal revenue

Current year -- $4.8 billion. Next year -- $4.8 billion.

*Federal stimulus

Current year -- $1.8 billion. Next year -- $429 million.

Spending

*Education

Current year -- $9.5 billion. Next year -- $8.1 billion.

*Human services

Current year -- $5 billion. Next year -- $4.6 billion.

*Economic development

Current year -- $165 million. Next year -- $112 million.

*Health care

Current year -- $8.6 billion. Next year -- $8.6 billion.

*Public safety

Current year -- $1.4 billion. Next year -- $1.3 billion.

*All other spending

Current year -- $1.4 billion. Next year -- $1.1 billion.

Don Moss & Alice Foss © 2005

310 East

Springfield, IL 62701

217.528.6977

Notice: The above information is copyrighted and may not be shared or forwarded

to anyone other than staff or volunteers of the agency under contract with Don

Moss & Associates.

[Guest guest]

This is really going to be a tough year.

Ellen

By DOUG FINKE (doug.finke@...)

THE STATE JOURNAL-REGISTER

Posted Mar 06, 2010 @ 11:30 PM

In good times, an election-year budget speech can be a boon to a sitting

governor, a chance to outline new or expanded state programs and how they will

help make the state a better place to be.

These are not good times.

The budget address Gov. Pat Quinn delivers at noon Wednesday will instead focus

on how he believes the state should cope with a record-setting deficit and a

still-sluggish economy that isn't strong enough to bail the state out of its

problems.

The proposed solutions won't be easy to take -- not for taxpayers, not for

people reliant on state services and not for the lawmakers who must decide on

the best way to plug a $13 billion hole in state finances.

Here are five things to consider as Quinn prepares to deliver his spending plan

for state government.

Lawmakers

To satisfy the lawmakers who eventually will have to act on Quinn's budget

recommendations, the governor will have to walk a careful line.

On one hand, the General Assembly wants to hear Quinn deliver an open and honest

appraisal of where the state stands financially. A year ago, many lawmakers grew

frustrated with Quinn as the session proceeded, believing he would make a dire

announcement one day only to backtrack a few days later.

" I would hope and I expect we're going to hear a very frank, honest speech, "

said Sen. Sullivan, D-Rushville. " No theatrics. Lay out what the situation

is. "

But, Sullivan added, Quinn shouldn't get too carried away.

" I don't want it to be scare tactics, " Sullivan said. " I want it to be real and

not over the top. "

But Quinn's speech will of necessity contain much news that lawmakers would

rather not hear.

" I think it's going to be a devastating year, " said Sen. Koehler,

D-Peoria. " Education was a sacred cow in Springfield, but we are going to see

cuts in education like we've never seen before. "

Quinn has made it no secret that he thinks the state needs more revenue to climb

out of its hole.

" What I expect to hear is he wants us to raise taxes and here's all of the hurt

that's going to happen if we don't, " said Sen. Dale Risinger, R-Peoria. " That's

not going to go anywhere. "

Providers

Quinn's budget speech will be eagerly awaited by the people who rely on state

funding, whether educators, businesses that sell goods to the state or the

social service providers who provide the network of programs for Illinois'

neediest residents.

" What I'm hoping to hear is that there are no further cuts in the budget for

disability services, " said Don Moss, longtime lobbyist for human service

organizations. " What I expect to hear is the governor may want to put on notice

that, without a tax increase, cuts will be made. "

Schainker, executive director of Senior Services of Central Illinois, said

she hopes there won't be additional cuts, but she also would like the state to

stick to whatever budget it adopts. The state owes Senior Services more than

$400,000.

" Eventually we will crack at the seams, " Schainker said. " We have to have a

budget and stick to it. We need a definitive idea of when we will get paid so

we're not always chewing on nails. "

Greg O'Connor, director of vocational services for SPARC in Springfield, said

that if Quinn is still interested in pursuing a tax hike, the governor must try

to show the downside of no new revenue.

" That means cuts, " O'Connor said.

He also said he's heard talk that lawmakers will settle for a short-term

solution that will get them past the election in November.

" That makes it really difficult to embark on programs, " O'Connor said. " At some

point, it also takes a toll on staff. If they always know their longevity is six

months, that wears on staff. "

Revenue

Revenue doesn't mean just money from taxes. Quinn budget director Vaught

said part of the administration's strategy for closing the deficit will include

both a push to secure additional federal funds and strategic borrowing in cases

where loans are less costly than penalties for late payment of bills.

But Quinn also continues to believe the state needs to raise the income tax, and

many lawmakers fully expect that to be part of his budget plan. Quinn previously

pushed for a 50 percent increase in the income tax rate, coupled with higher

deductions that would spare many taxpayers from seeing any increase.

But many lawmakers believe no tax hike will pass during the spring session,

since a major election is on the horizon.

" I do not see the appetite to do a tax increase during the spring session, "

Sullivan said.

Rep. Mautino, D-Spring Valley, called it " irresponsible across the board "

that lawmakers have ducked a tax increase so far. However, he agreed that a tax

hike won't pass this spring and said Quinn should present a budget that reflects

that.

" I would hope he would acknowledge that (a tax hike) is not passable and this is

the budget we are left with, " Mautino said.

Preliminary figures show the state can't count on much help from an economy

struggling to climb out of a recession. Income taxes, both personal and

corporate, along with sales taxes, provide the bulk of state revenue. During the

current fiscal year, they are expected to raise just under $16 billion; next

year, about $16.5 million. The $500 million increase isn't much in the context

of a $24 billion budget. It is also nearly $3 billion less than those taxes

produced just three years ago.

Spending

The Quinn administration put out some broad budget outlines more than a week

ago, along with a plea to the public for suggestions on dealing with the

deficit.

Quinn's numbers show projected spending from what are known as the state's

general funds to drop from about $26.2 billion to $24.1 billion. (The general

funds come mainly from general state taxes such as the income and sales tax. The

general funds budget pays for the most common state services, like education and

prisons, and it is the budget lawmakers have the most control over).

Quinn's budget outlines project reductions in spending for education, human

services, economic development and public safety. The only category of spending

that shows even a slight increase is for health-care programs.

Details of where those cuts will fall weren't put out by the administration last

week. Mautino expects the plan Quinn presents this week to closely follow the

outline.

" I'd expect general state aid (to schools) to be cut by 10 percent, " Mautino

said, based on preliminary figures he's seen.

Whatever Quinn recommends, " they have to be real cuts, because many people don't

believe that enough cuts have been made, " Mautino added.

" There's going to be hurt, there's no way around it, " Risinger said. " We've got

to have agreement to stop spending in new and expanded programs. "

What's next

After Quinn delivers his speech, it will be up to lawmakers to sort through it

and craft a spending plan for the fiscal year that starts July 1.

" Any budget that is introduced, close to 97 percent of it is what finally gets

passed, " Mautino said. " If the numbers are not inflated by assuming a tax

increase is going to pass before May, then he'll get pretty much what is in (the

budget speech). "

But lawmakers also acknowledge talk of simply cobbling together a spending plan

designed to get the state through the end of the calendar year. Lawmakers could

then raise taxes without immediately having to face voters.

Around the Capitol, this option is usually dubbed a six-month budget, although

that's really a misnomer.

" We'll allocate 100 percent of the money we expect to have, " Mautino said. " It

just happens to fill out only half of the need. "

Under that approach, instead of specifying where each dollar should be spent,

lawmakers would give Quinn broad authority to allocate funds, just as they did

to a limited degree this year.

" That would be irresponsible and shirking our duties, " said Rep. Jim ,

R-ville. " I would say that didn't work out very well for us this year. "

There's also the danger that the state would spend too much money too early in

the year.

" Spending too early sets us up for a complete breakdown of the social service

and state service network, " Mautino said.

Doug Finke can be reached at 788-1527.

***

Here are some broad budget numbers released by the administration in advance of

Wednesday's budget speech. All figures are projections.

Revenue

*Sales, personal and corporate income taxes:

Current year -- $15.9 billion. Next year -- $16.5 billion.

*Federal revenue

Current year -- $4.8 billion. Next year -- $4.8 billion.

*Federal stimulus

Current year -- $1.8 billion. Next year -- $429 million.

Spending

*Education

Current year -- $9.5 billion. Next year -- $8.1 billion.

*Human services

Current year -- $5 billion. Next year -- $4.6 billion.

*Economic development

Current year -- $165 million. Next year -- $112 million.

*Health care

Current year -- $8.6 billion. Next year -- $8.6 billion.

*Public safety

Current year -- $1.4 billion. Next year -- $1.3 billion.

*All other spending

Current year -- $1.4 billion. Next year -- $1.1 billion.

Don Moss & Alice Foss © 2005

310 East

Springfield, IL 62701

217.528.6977

Notice: The above information is copyrighted and may not be shared or forwarded

to anyone other than staff or volunteers of the agency under contract with Don

Moss & Associates.