Illinois budget spends less but doesn't cut more

[June 02, 2011]  SPRINGFIELD -- Illinois' new budget may spend less than Gov. Pat Quinn's original proposal, but it is higher than the past year's budget and was balanced by delaying the payment of billions of dollars in unpaid bills until the current fiscal year.

"The governor has been clear ... that while we put our fiscal house in order, we must continue to protect core priorities," said Kelly Kraft, Quinn's budget spokeswoman.

Quinn is "reviewing" the budget's impact on human services and schools statewide, Kraft said, which were among items lawmakers trimmed to reduce spending from Quinn's $36 billion to $33.2 billion.

House Democratic budget architect Frank Mautino, D-Spring Valley, said the new spending priorities include Illinois' $4 billion pension payment.

The budget "for the first time doesn't hide the true costs of state government by taking the pensions off budget," Mautino said. "We're making all of our pension payments, which for the past three years we've had to borrow" to fund.

But pension payments are one piece of Illinois' astronomical debt. In the proposed budget, lawmakers did not reduce the $4 billion in old bills on the desk of Illinois Comptroller Judy Baar Topinka. Instead, the state will take longer to pay those bills, including Medicaid payments

State Sen. Donne Trotter, D-Chicago, said lawmakers are spending as much as Illinois is expected to take in from taxpayers.

"This is a revenue-driven budget ... versus a program-driven budget, which we've had in the past, where we created programs and then tried to find money," Trotter said.

State Rep David Harris, R-Arlington Heights, said that if Illinois brings in more than $33.2 billion in tax revenue, that extra money will pay for past-due bills.

Though no one is willing to speculate on how much extra money Illinois could see, Senate GOP budget architect Matt Murphy, R-Palatine, said the state will not see anywhere near the $7 billion from this year's 67 percent personal income tax and 4 percent corporate income tax hike that is propping up the proposed budget. The tax hikes were approved in January and are designed to expire in 2016.

This is "the first step (toward) cementing that tax increase into being permanent, just a few months after the Democrats who passed it promised everyone it'd be temporary," Murphy said.

And that's the problem, said Collin Hitt, a policy specialist with the Illinois Policy Institute, a free-market think tank.

"The budget on the governor's desk is a 1 percent reduction over last year," said Hitt. "But it is by no means the frugal budget that many lawmakers were promising after this year's record tax increase."

[Illinois Statehouse News; By BENJAMIN YOUNT]