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How Illinois' $50 billion budget deal got done

Crain's Chicago Business

Thursday, May 25, 2023  |  Column  |  Greg Hinz

With the economy starting to turn dicey and Republicans in the political wilderness, Springfield Democrats have decided to quit fighting among themselves over rather small-ball items and take what they can get.

That — leveraged by a last-minute compromise over health insurance — appears to be the story behind the roughly $50 billion budget deal that Gov. J.B. Pritzker and legislative leaders announced yesterday afternoon, a deal on a quick track to passage that should allow everyone to get home in time for those Memorial Day weekend barbecues.

It’s a budget that includes $400 million for a “deal-closing fund” designed to help Illinois lure electric vehicle makers, a battery plant and maybe other manufacturers to the state.

Pritzker, Senate President Don Harmon and House Speaker Emanuel “Chris” Welch engaged in a grand bit of mutual back-slapping in announcing the pact at a Springfield news conference.

The budget includes “historic investments that will pay dividends for years to come,” declared Pritzker, who's particularly happy about an additional $300 million for early-childhood education.

Harmon termed the spending plan “responsible” and “balanced.” Welch echoed that, saying the measure “does what the people of Illinois sent us to do.”

In reality, though, Democrats, who possess supermajorities in both legislative chambers and own almost everything else worth owning in Springfield, had always been expected to pass a budget. Failing to do so by the end of May could have let Republicans back into the bargaining.

Still, with the COVID-stimulus-fueled fiscal boom dissipating, state revenues now are beginning to decline. The combination of that and an anticipated jump to $1.1 billion in spending for health insurance for undocumented immigrants created a bit of crunch in recent weeks. So the Dems trimmed a bit here and cut a bit there.

The main move came when Democratic lawmakers agreed to give the governor what he described as seven management “tools” to slash health spending for immigrants. Details weren’t immediately available about what those tools encompass, but the final budget figure for that item now will be $550 million, not the advertised $1.1 billion.

The money freed up by that move allowed the state to not only boost early-childhood spending, but also put an additional $350 million into aid for public grade and high schools. Beyond that, the deal includes the $400 million to entice manufacturers to locate in Illinois. The money originally was appropriated in January but wasn't spent, so now it’s in line to be reappropriated.

As earlier proposed, the state also will put an extra $200 million toward its unfunded pension debt and another chunk of cash into its rainy day fund, which is now on track to pass $2 billion.

New Chicago Mayor Brandon Johnson likely will approve of the extra money for grade and high schools — Chicago Public Schools will get at least $70 million extra — and some new spending on violence prevention. But that’s it, at least for now.

With Senate action late last night or early today, the House hopes to finish up action for its spring session by Friday.

Next year’s budget could be even tighter. But that’s then.