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 In his second budget address to the legislature, Rauner said
residents were "sick and tired" of a political impasse that has left
the fifth-largest U.S. state without a full budget for nearly eight
months.
Illinois and Pennsylvania are the only two states that lack complete
fiscal 2016 budgets.
Rauner, a wealthy venture capitalist turned politician, offered two
fiscal 2017 budget proposals: a $36.3 billion general fund spending
plan that incorporates his so-called turnaround agenda that
Democrats have opposed, or a budget tied to proposed legislation to
empower him to reduce spending to $32.8 billion.
"I won't support new revenue unless we have major structural reforms
to grow more jobs and get more value for taxpayers," he said.
 Rauner insisted any fiscal 2016 budget deal must include Democratic
concessions on at least "a portion" of his agenda to weaken
collective-bargaining rights, limit workers injured on the job from
obtaining compensation from employers, freeze property taxes and
change how legislative district boundaries are drawn.
House Speaker Michael Madigan and Senate President John Cullerton,
both Chicago Democrats, declined to support big budget powers for
Rauner.
"What the governor is asking for is unilateral budget-making power,"
Madigan said, adding a balanced approach of spending cuts and new
revenue is needed.
Illinois has the lowest credit ratings and worst-funded pensions
among the 50 states.
While the search continues for a constitutional way to rein in a
$111 billion unfunded pension liability, Rauner proposed saving $4.8
billion over four years by shifting some retirement costs for 1,900
high-paid employees onto their local school districts, universities
and community colleges. Pension-influencing, end-of-career salary
increases would face a tighter cap, while state payment spikes
caused by assumption changes by the state's five retirement systems
would be smoothed over five years.
Rauner pledged to work on a bipartisan revamp of the state's school
funding formula, adding any proposal involving "taking money from
one school district and giving it to another is doomed." He warned
the Chicago Public Schools "is threatening a lawsuit against the
state."
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CPS CEO Forrest Claypool said the district, mired in its own
financial crisis, is a victim of unequal funding by the state and
could not ignore "any tool" to protect students. He added that the
governor was unwilling to address that inequity.
Rauner proposed boosting per-student funding in K-12 public schools
to $6,119, the highest level in seven years
A fiscal 2016 school funding bill passed by Democrats last year
marked the only major budget measure Rauner initially signed,
leaving Illinois to operate on court-ordered spending and ongoing
appropriations for bonds and pensions for the fiscal year that began
July 1.
Spending is largely at fiscal 2015 levels when revenue was higher
thanks to income tax rates that had been temporarily raised, but
which rolled back on Jan. 1, 2015, making Illinois' finances even
shaker. Public universities and scholarships for low-income college
students remain unfunded.
Several hundred protesters, mostly students from public
universities, crowded into the State Capitol rotunda and chanted
“save our schools” and “hey, hey, ho, ho, Governor Rauner has got to
go” while the governor delivered his speech inside the House
chambers.
Illinois' current $7.17 billion backlog of unpaid bills, a barometer
of the ongoing structural budget imbalance, could be tackled
partially through up to $4 billion in new borrowing that would cost
less than the 12 percent penalty now tacked onto tardy state bill
payments, an administration official said.
(Additional reporting by Karen Pierog and Fiona Ortiz in Chicago;
Editing by Matthew Lewis)
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