- Associated Press - Tuesday, May 27, 2014

SPRINGFIELD, Ill. (AP) - Having given up on extending Illinois’ temporary income tax increase - at least for now - the Illinois Legislature is moving forward with a scaled-back budget that could lead to layoffs, further delays in paying the state’s bills and a post-election vote to make the tax hike permanent or generate some other source of revenue.

The House on Tuesday approved the approximately $35.7 billion 2015 spending plan, which key Democrats acknowledge relies on some of the same practices that got Illinois into financial trouble in the first place. That includes not allocating enough money to cover expenses, using money from special funds for day-to-day operations and banking on future increases in revenue that may or may not materialize.

“We are kicking the can down the road,” said state Sen. Heather Steans, a Chicago Democrat and a lead budget negotiator.

The plan now goes to the Senate, where it’s expected to be approved before the Democrat-controlled Legislature must adjourn for the session on Saturday.

Lawmakers drafted the plan after House Speaker Michael Madigan announced his chamber had given up on extending a temporary income tax increase that Democrats approved in 2011. The increase - which cost the typical taxpayer $1,100 last year - is set to roll back from 5 percent to 3.75 percent for individuals on Jan. 1. That will lead to a $1.8 billion drop in revenue next year.

Madigan, Gov. Pat Quinn and Senate President John Cullerton all were pushing to make the higher rate permanent, but Democrats in the House - where all members are up for re-election in November - couldn’t garner enough “yes” votes. The chamber last week also overwhelmingly rejected a so-called doomsday budget that would have cut funding to schools and other areas.

Quinn’s office called the spending plan that advanced Tuesday “incomplete.”

“The budget doesn’t avoid the tough decisions. It just postpones them,” said his spokeswoman, Brooke Anderson.

The budget keeps funding for education and most state agencies flat next year. Without money for increased costs, lawmakers said it’s likely that agencies such as human services, corrections and Illinois State Police will have to lay off staff. Anders Lindall, a spokesman for the American Federation of State, County and Municipal Employees, said the budget would “force a cascade of negative consequences,” including possible facility closures.

Illinois’ backlog of unpaid bill also is expected to grow as the state puts off paying its vendors, particularly those that provide health care to state employees. That backlog was at $4.7 billion earlier this month, according to the comptroller’s office. That’s down from nearly $10 billion four years ago.

Rep. John Bradley, a Marion Democrat and chairman of the House Revenue and Finance Committee, called the spending plan “not the best case scenario or the worst case scenario.”

“This is a budget which reflects exactly what we can do this year,” Bradley said. “It’s cobbling together a budget we can without any kind of tax extension.”

Cullerton said the Legislature will have to look at other revenue options after the November election, whether it’s extending the full tax hike, a smaller decrease or other changes to tax policy.

“In some fashion we’ll need some revenues,” the Chicago Democrat said. “It’ll all be on the table.”

Asked if he also believes a tax increase will be needed later in the budget year, Madigan said “not necessarily.”

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