Illinois Gets Compromise Budget, but Big Deficit Remains

Published October 1, 2009

Two weeks after Illinois entered fiscal year 2010 without a spending blueprint in place, Gov. Pat Quinn (D) signed a compromise budget into law and avoided a shutdown of the state government.

“It was, admittedly, not an ideal solution,” said Senate Republican Leader Christine Radogno (R-Lemont). “However, it will provide the revenue necessary to keep core government services and programs operating, without further burdening citizens with a tax increase.”

The budget, signed July 15, provides $26.1 billion in spending authority, well below the original $30.5 billion Quinn proposed in March. The compromise relies on spending cuts, borrowing, and delaying some vendor payments to reduce what was originally an $11.6 billion deficit.

Tax Hike Avoided

Earlier this year Quinn and House Speaker Mike Madigan (D-Chicago) supported a 50 percent increase in the income tax, while Senate President John Cullerton (D-Chicago) pushed a 67 percent income tax increase and a plan to extend the sales tax to services.

During the floor votes in May, five Senate Democrats and 26 House Democrats voted against the tax hikes. No Republican in either chamber voted for the tax increases.

“The Senate Republican Caucus believes strongly that it is inappropriate to even discuss tax increases at a time when our economy teeters on the brink of disaster,” Radogno said. “Individuals and businesses alike cannot afford to pay more into a broken-down system.”

The budget surprised many political observers, who had expected a tax increase to pass.

Republicans Deny Cover

“For decades in Illinois, Democrats passed around taxpayer largesse knowing full well that Republicans would do the ‘responsible thing’ by collaborating to hike taxes to pay for the largesse,” said Greg Blankenship, president of the Illinois Alliance for Growth. “For the time being, that implicit deal has been broken by Republicans, who are now holding the spenders accountable by refusing to provide that historical cover to pay for the spending.”

“We were able to prevent taxpayers from shouldering the burden of a dramatic income tax increase at a time when the economy is already providing enough hardship. We must find economical ways to provide essential goods and services and stop continuing spending on those we can live without,” said state Rep. Sandra Pihos (R-Glen Ellyn).

Budget Review Continues

Budget negotiations are likely to be reopened in the near future, as the compromise plan did not deal with a $3.9 billion deficit left over from Fiscal Year 2009. A tax hike also could be revisited in an October veto session or in January 2010, when a supermajority vote requirement expires.

Kristina Rasmussen ([email protected]) is executive vice president of the Illinois Policy Institute.