LDN - Business

In Illinois, partisan politics send budget battle into overtime

[June 01, 2017] By Dave McKinney and Karen Pierog

CHICAGO (Reuters) - Any hope for a break in Illinois’ long-running budget stalemate devolved into more partisan bickering and deeper divisions on Wednesday as the state legislature ended its spring session without a deal on a spending plan for a third year in a row.

Democrats and Republicans blamed at each other for an impasse that gives Illinois the dubious distinction of being the only state to go nearly two straight fiscal years without a complete budget. A third budget-less year risks potential downgrades of Illinois' already low credit ratings.

Citing Republican Governor Bruce Rauner's unwillingness to meet, House Speaker Michael Madigan, a Chicago Democrat, said budget talks will move to a June overtime session in which a tougher vote of a three-fifths majority will be needed for approval.

“The governor’s reckless strategy of holding the budget hostage to create leverage for his corporate agenda that pads the profits of large corporations and insurance companies has for the third year left Illinois without a budget at the end of the May legislative session," Madigan said in a statement.

Rauner returned fire at a state capitol news conference.

"Today we’ve seen a complete dereliction of duty by the (Democratic) majority in the General Assembly, once again, a tragic failure to serve the people of Illinois, a tragic failure to pass a balanced budget along with critical structural changes to protect taxpayers and grow more jobs," the governor said.

Democratic Senate President John Cullerton blamed Rauner for blocking a budget by trying to kill a bipartisan spending and reform package in the Senate and later being murky in his preferences for property-tax freeze legislation that he had demanded in exchange for supporting new revenue.

“(Rauner) came in the middle of the process, told Republicans to vote no, didn’t give support and the same thing happened in the House. The Republicans didn’t vote for anything, and as a result, we don’t have a budget," Cullerton told reporters.

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Illinois Gov-elect Bruce Rauner speaks to the media after a meeting with U.S. President Barack Obama and other Governor-elects from seven U.S. states at the White House in Washington December 5, 2014. REUTERS/Larry Downing/File Photo

The Senate last week passed a $37.3 billion fiscal 2018 budget plan that includes income tax hikes, a sales tax on services and spending cuts without Republican votes. That budget legislation was not taken up by the House.

Illinois, the nation's fifth-largest state, has been limping toward the June 30 end of its second-consecutive fiscal year operating under court-ordered spending, stopgap spending, and ongoing appropriations mandated by law.

As a result, the state's pile of unpaid bills has topped $14 billion. Rating agencies, which have pushed Illinois down the credit scale six times to a level two steps above junk since January 2015, have signaled more downgrades are possible.

The state's cash crunch has delayed $1.1 billion in payments to public school districts, led to big spending cuts at state universities, and put social services providers on life support.

Before adjourning, the House and Senate approved a school-funding overhaul, legislation authorizing the sale of the state's main office building in Chicago, and a minimum wage hike. Republicans opposed each measure, and none passed by large enough margins to fend off potential Rauner vetoes.

(Editing by Matthew Lewis, Leslie Adler and Michael Perry)

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