In his Feb. 18 address before the Illinois General Assembly, Gov. Bruce Rauner introduced a budget proposal filled with reforms he said “will yield more than $2 billion in savings in the first year alone.”
“This budget is honest with the people of Illinois, and it presents an honest path forward,” Rauner said. At $31.5 billion, his budget is more than $4 billion less than the current one.
“Before we ask the people of Illinois to pay more without fundamentally reforming the structure of state government would further erode public confidence and accelerate our decline,” he said.
“We must institute major reforms, or whatever balanced budget we craft this year will be undone in the years ahead by the special interests that make their money from the government and pay politicians to spend more,” Rauner insisted.
Among his main targets are the state’s Medicaid program, which would be cut by $1.5 billion; the state’s human services department, which would be cut by more than $100 million, $23 million of which would come from that department’s Early Intervention Program; and local governments, which would experience a 50 percent reduction of their share of the state income tax (from 8 percent to 4 percent).
If Rauner’s budget were passed, the City of Chicago would lose $135 million of its share of state income tax revenue each year, according to the Metropolitan Mayors Caucus.
There are many critics of the budget proposal, including the Governor’s friend Mayor Rahm Emanuel, who say that Rauner imposes a too easy discipline—squeezing the most vulnerable while not addressing the real sources of the state’s fiscal problem—mainly wealthy individuals and corporations that don’t pay their fair share of taxes.
“The idea that you would be looking at basic services and cuts to the municipalities when you have a tax code that has giveaways to corporations, in my view is the wrong priorities,” said Emanuel to the Chicago Tribune.
According to a report by Progress Illinois, “The Responsible Budget Coalition, comprised of more than 100 groups working to protect vital services for Illinois families and communities, summed up Rauner’s proposed budget cuts as being ‘morally reprehensible,’ saying such funding reductions would ultimately ‘compromise the future economic success of Illinois.'”
The Chicago Tribune reported that both Illinois House Speaker Michael Madigan and Senate President John Cullerton have criticized Rauner’s claim that his budget would save more than $2.2 billion by shifting “public employees July 1 into a lower-tier pension classification for new hires that provides vastly reduced retirement benefits.”
“Madigan called the move ‘reckless’ and [Cullerton] said Rauner won’t get ‘those savings from the pension reform…so he’s going to have to come up with some proposal to fill that goal. It’s his budget. He’s governor,'” the Tribune reports.
“Not funding education at a 100 percent rate again this year is simply unacceptable,” said state Sen. Kimberly Lightford (4th) in a statement.
“Ninety-nine percent funding would not be enough, so the proposed 95 percent is certainly not adequate. Furthermore, the possibility of slashing the state’s child care program, worker salaries, Medicaid, and other critical services, while instituting sharper tax cuts for CEOs will not move Illinois forward. It will only lend itself to further alienation and degradation of those unlucky enough to be ill, young, elderly or poor.”
“The state must find ways to eliminate waste and not eliminate services and programs that support Illinois’ families,” said state Rep. LaShawn Ford (8th) in a response to Rauner’s budget. The Austin lawmaker called for a budget that “is not penny-wise and pound-foolish.”
“I urge Gov. Rauner to govern with a fair approach and propose ideas that will both cut waste and increase revenue in order to provide for health, safety, welfare of the people; eliminate poverty and inequality; assure legal, social and economic justice; and provide opportunity for the fullest development of individuals in the state.”
Ford criticized Rauner’s proposal to expand the sales tax and advocated for a restructuring of the Illinois tax code, a major source of the state’s budget woes.
“As we work to structure our budget for the next year, we have to be more flexible in how we structure our tax code, and we must consider a fair income tax in which the income tax rate a person pays increases as their income increases,” Ford said.
“It is clear that more revenue is needed, but it must be fair and progressive and not regressive, as the proposed expanded sales tax would be. Regressive tax policy hurts working families and those working to enter the labor force.”