With Gov. Pat Quinn set to outline his budget proposal today, the General Assembly has three apparent scenarios going forward. Only one will truly fix the state's fiscal crisis.
We're still an hour away from Gov. Pat Quinn's FY 2011 budget address, which is scheduled for noon today. But thanks to a briefing by administration officials last night, we already have a firm sense of what the plan entails. Quinn has outlined just over $2 billion in cuts, the majority of which are in K-12 education. Health care and human services take a combined $600 million hit and revenue sharing for local governments will be trimmed by $300 million.
Those reductions shrink the existing deficit to $11 billion. To "balance" the budget next year, the governor has called for $4.7 billion in some form of long-term borrowing. While Quinn is expected to voice support for a revenue increase in his speech, no tax hikes were included in the official budget, leaving unsolved the growing backlog of provider payments, which are estimated to reach $6 billion by the end of the current fiscal year. The administration is also anticipating savings from the implementation of a "two-tiered" pension system and the continuation of enhanced federal Medicaid matching rate, neither of which have been approved yet.
That leaves the General Assembly with three apparent scenarios going forward:
Pass This Budget:
Theoretically, the General Assembly could decide to pass Quinn's formal budget as presented today. But there's a catch: The constitution requires three-fifths majority support in both chambers for any spending plan that relies on long-term borrowing. That means Republican votes will be required.
To attract any support from the minority party, the Democratic leadership would have to give up loads of concessions to Senate Minority Leader Christine Radogno (R-Lemont). Along with House Minority Leader Tom Cross (R-Oswego), Radogno has already issued a joint statement calling on Democrats to further cut spending and implement additional "reforms" to Medicaid and the state pension system.
In order to go down this path, the Democratic leaders will have to embrace many of the Republicans' misguided budget proposals -- such as an expansion of private managed care -- and, in doing so, will likely face serious opposition from certain lawmakers in their own party. "We’d have to assume we’d have to get Republicans on board to the idea of borrowing," Rikeesha Phelon, a spokeswoman for Senate President John Cullerton (D-Chicago), told the Sun-Times, "and I do not see that happening."
Meanwhile, by severely cutting education spending and continuing to put off billions of dollars in unpaid bills, the fallout will continue to make front-page news across the state.
Pass The Buck:
If Democrats can't reach a reasonable consensus with the GOP, leadership could decide to pass a six-month partial-year budget similar to the stop-gap plan they approved last year. The motivation behind this strategy is pretty clear: giving Gov. Quinn authority to spend whatever money is available through the end of 2010 means lawmakers could return to Springfield during the November veto session -- after the 2010 general election -- and plug the budget holes, possibly by passing tax hikes that many consider a non-starter during the current election year.
Of course, the Democrats in Springfield have shown over the past 12 months that they're pretty adept at pushing back the goal posts, so it's far from assured that they would actually move to solve the crisis later this year.
Pass An Income Tax Increase:
The third option is for Democrats to suck it up and pass a sustainable and fair budget on their own. By reforming and modernizing the state's tax system (and raising the state's income tax), the party could protect strained schools, social service agencies, medical providers, and municipal governments. It would also allow the state to close its structural deficit in the near-term without gutting investments in human infrastructure.
Plenty of institutional organizations, not to mention the Democratic base, firmly support this approach. And as the State Journal-Register points out today, while an income tax hike is sure to anger some voters, further inaction could be just as damaging at the ballot box:
There’s a political risk to pushing off the problems again, as Quinn well knows. It would give Republicans ample material to try to paint Democrats as ineffective leaders and Quinn as the governor who couldn’t even get his own party on the same page.
This afternoon, Quinn will make his pitch for raising new revenue, but he won't move forward on such a plan without further legislative support. The question is whether Cullerton and House Speaker Michael Madigan are even listening.