After Two Years, Illinois Has A State Budget Again

Jul 7, 2017

The two-year Illinois budget impasse is over.

The House of Representatives voted Thursday to override gubernatorial vetoes, giving final approval to a $36 billion spending plan and $5 billion tax increase. The laws are retroactive to July 1, the start of the current fiscal year.

There was not a single vote to spare. Ten Republicans who defied Gov. Bruce Rauner joined with Democrats for the 71 votes needed to end the crisis -- the nation's longest since at least the Great Depression.

Among those Republicans was State Rep. Steve Andersson from Geneva. "Our options are this or financial meltdown," he said.

Illinois Gov. Bruce Rauner, left, and House Speaker Michael Madigan

But after the budget was approved, Democratic House Speaker Michael Madigan acknowledged the Republicans who voted to override the vetoes.

“Our budget agreement was made possible by legislators on both sides of the aisle, who looked beyond partisan differences and put the best interest of our state and its residents first,” Madigan said.

Rauner, who had been holding out for his business-friendly agenda, called the override “another step in Illinois’ never-ending tragic trail of tax hikes.”

In a statement issued shortly after the votes, Rauner blamed Madigan for the income tax increase of 1.2 percentage points – 32 percent of the current 3.75 percent rate – and said it will force another tax hike in the near future. The new state income tax rates will be 4.95 percent for individuals and 7 percent for business, up from 5.25 percent.

“(Madigan’s) tax-and-spend plan is not balanced, does not cut enough spending or pay down enough debt, and does not help grow jobs or restore confidence in government,” the governor said.

But Rep. David Harris, R-Arlington Heights, said time had run out.

“We are looking into an abyss — a financial abyss," Harris told his colleagues. "The state is imploding financially."

State Rep. Sue Scherer, D-Decatur
Credit ilhousedems.com

Four Democrats who voted against the state income tax increase when it passed the Illinois House a few days ago voted in favor of overriding Rauner’s veto of the same measure.

Rep. Sue Scherer of Decatur was one of those four. She says she initially voted against the tax hike because she expected Rauner to use his amendatory veto and open the door to further bargaining that might shift more of the tax burden over to corporations and the wealthy.

“He just vetoed the entire budget, like everything in the whole thing was bad,” she said, “so it left me with no choice. It was either override his veto, or we go off into a financial catastrophe for our state, and go to junk bond status.”

Scherer said she heard from state universities, hospitals and school districts about the problems they would face if the budget impasse continued for any longer.

Lawmakers say their budget is just the beginning of what will be a long recovery. Illinois isn’t out of danger yet, since the state has racked up $15 billion in unpaid bills. But lawmakers are at least hoping that their vote will keep the credit rating agencies from knocking Illinois down to “junk” bond status.

State Sen. Dave Syverson, R-Rockford
Credit senatordavesyverson.com

State Sen. Dave Syverson, R-Rockford, in his “Week in Review” newsletter, said “The state’s two-year budget impasse came to a temporary end” with the budget “failing to incorporate any meaningful government reforms.”

“Only through true property tax relief, meaningful workers’ compensation reform and a fair and equitable school funding reform model will Illinois have a strong foundation for future job growth and education excellence,” he said. 

Syverson cited an article from the Daily Herald that listed the effect of the tax increase on various types of taxpayers.

  • A single person who earns $34,000 a year would pay an additional $382 a year.
  • A family of three making $75,000 a year would pay an additional $822 a year.
  • A family of four earning $150,000 a year would pay an additional $1,695 a year.
  • A 66-year-old retiree who has $5,000 in taxable earnings plus Social Security and pension income, which are not taxed in Illinois, would pay an additional $22 a year.

House Minority Leader Jim Durkin sided with Rauner, but said he hopes the legacy of the budget impasse is about how Republicans and Democrats work together going forward.

“My desire is that it will be determined on what we must do together as a body in the days, weeks, months, and years ahead,” he said.

But Illinois Republican Party Chairman Tim Schneider said in a statement that he was “extremely troubled” that Republicans had voted to override the vetoes.

“After all we have accomplished together, it is astonishing that these legislators would now turn their backs on taxpayers across the state,” Schneider said. “I am confident voters will hold those politicians accountable for choosing Mike Madigan over the people of Illinois.”

Durkin told Reuters News Service that he had no plans to take any punitive actions against those Republicans for voting as they did, but predicted “it’s definitely a possibility” some will face primary challenges from the Republican Party’s anti-tax wing in the 2018 elections.

One side effect of the House votes is resumption of sales of Mega Millions and Powerball lottery tickets by the Illinois State Lottery. The organizers of those two nationwide games had pulled the state’s authority to sell the games due to the budget impasse.

The House votes were delayed by a two-hour lockdown at the Capitol after a powdery substance was thrown at several locations on the second floor, including the governor's office. 

That prompted a hazardous-material investigation, according to Springfield fire officials. A preliminary analysis showed the substance wasn't hazardous and the building was reopened.

Dave Druker, a spokesman for the secretary of state's office which oversees Capitol security, says the investigation is continuing. One person is in custody in connection with the incident. 

No injuries were reported, but no one was allowed to enter or exit the building for about two hours.  

  • Illinois Public Radio Statehouse Bureau Chief Brian Mackey, IPR reporters Tony Arnold and Brian Moline, and the Associated Press contributed to this report.