Republican Gov. Bruce Rauner said Wednesday he could balance the IL budget and cut taxes by $1 billion provided the Democratic-controlled General Assembly agrees to make massive changes to the pension system and health insurance benefits for state workers. A two-year stalemate without a budget - which created the huge bill backlog - finally broke last year when Republican lawmakers crossed over to override Rauner's budget veto and implement an income tax hike from 3.75 percent to 4.95 percent.
Charlie Wheeler, the director of the public affairs reporting program at the University of Illinois - Springfield, said the difficulty is figuring how the universities will be able to afford picking up the pension costs, which he said is not possible. He also promised schools and local governments would have the tools they need to offset the costs, including increased education funding, the power to dissolve or consolidate units of local government and more flexibility in contracting, bidding and sharing services. Still, the governor could face a tough crowd when he gives his budget speech at noon Wednesday.
The governor proposed spending about 37.6 billion dollars compared to a projected 38 billion dollars the state is expected to bring in, but it includes many one-time revenue sources, including the sale of the Thompson Center in Chicago.
"Our FY19 budget sets out to make the structural reforms that will get us moving in the right direction", Rauner said in his address Wednesday.
"Our budget proposal shifts costs closer to home, so people can question expenses and deal with them more directly".
Rauner pledges to reduce the costs of workers' compensation, health benefits for state workers and the state's biggest burden: pensions.
Gov. Rauner is calling for a almost $1 billion tax cut and says IL will be able to accomplish that with reforms to its pension program, health care, workers' compensation system and the sale of the Thompson Center in Chicago. Heather Steans, said the plan would severely hurt human-services, although she acknowledged it would balance a budget.
"Schools already pay a portion of the pension cost, along with the teachers". The CPS a year ago received $225 million in funding to help cover some of the shortfall in its pension funding. Business leaves the state to escape them or won't come to avoid them. "I don't think those cuts are good ideas, and I'm pretty sure Republicans don't support them either".
State Sen. Bill Brady, R-Bloomington, agreed with Rauner's assessment that IL residents are overtaxed.
Rauner's budget calls for adding $100 million in capital funds to address deferred maintenance on college campuses. The latter is among the new initiatives that relies on Build Illinois bonds. "It wasn't any of the universities that put the pension system in place; it was the state".
"Building political will to implement more painful tax and fiscal policies will be hard, but it is necessary in order to secure Illinois' financial future", Civic Federation President Laurence Msall said in the report.