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Civic Federation slams Rauner's 'precariously balanced' budget, calls for expanded taxes

Illinois Watchdog.Org

Wednesday, May 16, 2018  |  Article  |  By Cole Lauterbach

Budget--State (8) , Governor (44) , Pensions (70) , Taxes, income (86) , Taxes, sales (88) Batinick, Mark--State House, 97 , Hoffman, Jay--State House, 113
A fiscal policy group in Chicago is opposed to Gov. Bruce Rauner's budget plan, which it said was precariously balanced using aggressive assumptions and failed to address the state's billions of dollars in unpaid bills.

The nonprofit Civic Federation’s Institute for Illinois’ Fiscal Sustainability said it can’t recommend Rauner’s $37.6 billion budget for fiscal 2019 because it assumes too many sources of revenue will fall into place that are out of the governor's control. Rauner’s budget is "based on $1.8 billion in aggressive assumptions," the report said, adding that a shift of pension costs to local school districts and universities will likely fall flat, leaving an estimated $9.1 billion backlog of bills.

“Illinois residents were able to breathe a short sigh of relief following the end of the unprecedented impasse, but the state is far from fiscal stability,” Civic Federation President Laurence Msall said in a statement. “Unfortunately, the possibility of renewed political stalemate hangs over Springfield, and it would be financially reckless to wait until after the upcoming election to start working toward long-term stabilization. The state narrowly avoided a downgrade to junk status last year and another impasse could squander recent progress.”

In its report, the federation recommended that lawmakers limit net agency expenditure growth to 2.1 percent, tax retirement income, reduce late-payment penalties on overdue bills and expand the sales tax base to include 14 services that are taxed in Wisconsin, among other changes.

A spokeswoman for the governor's office said Rauner's budget is balanced and would yield a surplus.

“The people of Illinois are already taxed out,” spokeswoman Rachel Bold said. “The people of Illinois need a balanced, full-year budget that doesn’t take more from the pocketbooks of hard-working Illinois families.”

State Rep. Jay Hoffman, D-Swansea, said lawmakers shouldn't count on Rauner's help to pass a budget.

“His budget’s not, nor ever has, been balanced and he’s never signed one,” he said. “We’re going to have to do it ourselves.”

Democrats, along with a handful of Republicans, passed a budget in 2017 over Rauner’s veto to break a two-year impasse. That budget included a $5 billion income tax increase.

Hoffman said he didn’t expect another tax increase this budget cycle. He said there would have to be some tough decisions made about cuts.

State Rep. Mark Batinick, R-Plainfield, said a balanced budget must start with knowing how much revenue the state expects to bring in. A revenue estimate is required by law, but legislators have been able to get around it for years. The Illinois Senate passed one last year, but the House neglected to even bring one up for a vote, despite the constitutional requirement to pass a balanced budget each year.

“Taxes were raised on people to the tune of several billion dollars and here we’re looking at a $3 billion shortfall again less than a year later,” Batinick said. “The idea that [Democrats] didn’t project this out beyond a couple years is beyond me.”

Lawmakers have until the end of May to send Rauner a budget without needing a supermajority in both House and Senate to pass. The 2019 fiscal year starts on July 1.