Back to the Senate for Illinois budget

[May 27, 2010]  SPRINGFIELD -- The Illinois House did its heavy lifting for next fiscal year's budget late Tuesday evening.

Now, the Illinois Senate is up to bat.

State senators will consider some of the remaining pieces of the state's budget jigsaw puzzle.

Gov. Pat Quinn has a spending plan for state agencies and programs awaiting him, but he will wait until lawmakers pass other proposals pertaining to the budget.

One of the bigger legislative proposals is a $4 billion borrowing plan passed by House lawmakers late Tuesday evening.

Under the borrowing plan, proceeds from issued bonds would allow the state to make its annual contribution to the state's five public employee pension systems.

Lawmakers have said borrowing will cost about $1 billion in interest over the next eight years.

House lawmakers needed two votes in order to pass the plan, but the Illinois Senate may have a more straightforward process.

Senate Democrats have enough members for an extraordinary majority and could pass the borrowing plan to Quinn without Republican support.

Quinn said he favored the borrowing for the pension systems and hoped senators would make a "responsible" choice.

"We're going to be working with the Senate. We hope to get them to go along with the need to borrow the money for the pension payment," the governor said. "As was made yesterday -- a very good point, I thought -- this is the fiscally responsible way to act. And I think if we act that way with the Senate and get it onto my desk, that will be a good thing for Illinois."

The Senate will also consider granting emergency budget powers to Quinn.

Under the emergency powers, Quinn would have broad discretion to reduce agency and program spending. The emergency authority would provide Quinn some flexibility to manage a budget at a time when state revenues are flagging.

Other proposals include:

• Front-loading funds from a multiyear settlement with the tobacco industry. Lawmakers have claimed that Illinois could extract about $1 billion by taking the funds from the settlement upfront.

• Reducing lawmaker compensation for lodging and meals from $132 per day to $111 per day and reducing mileage compensation for driving from 50 cents per mile to 39 cents per mile.

• Eliminating the annual cost-of-living adjustment for the upcoming fiscal year for legislative and executive elected officers as well as certain appointees.

• Establishing an amnesty period from October to November of this year for tardy taxpayers dating back to 2002.

• Establishing a sales tax holiday for 10 days in August 2010, when the sales tax on school supplies and clothes is reduced from 6.25 percent to 1.25 percent.

Quinn would have preferred lawmakers to discuss his proposed 33 percent income tax increase to help close the state's budget gap.

"But if you don't have the necessary votes in the House or Senate for that, ... we're in a democracy and you have to go to 'Plan B,'" Quinn said. "That's what I've tried to do in as good a way as possible for the people of Illinois to get through a tough time."

[Illinois Statehouse News; By KEVIN LEE]