Monday, December 14, 2015

Illinois budget stalemate continues
as 2015 draws to a close

With the approach of the end of the first half of the state’s fiscal year, the Illinois General Assembly still limps along as no FY2016 budget has been approved. The protracted budget stalemate between Republican Governor Bruce Rauner and the legislative Democrat leadership drags on.

The governor continues to push his “turnaround agenda” which originally included business reforms such as workers’ compensation reform, tort reform, and right-to-work zones, as well as property tax relief, pension reform, term limits, budget cuts, and mandate relief for units of local government and school districts.

The Democrat leaders have been resistant to state budget cuts and want to reserve the current level of state assistance for  social services regarding  health care, child care, nursing care, and mental health care and need new revenue sources because of  the expiration of the increased income tax rates in January.

Governor Rauner has stated that he could support finding new revenues for the budget, but only if some of his items on his “turnaround agenda” are approved. The Democrats have demanded that a FY2016 budget be approved, with new revenues, before any substantive reform language is advanced. That “chicken or the egg” scenario has been the principal stumbling block throughout the year.

But this month there are indications that there could be a break through on the budget negotiations. Rauner and the four legislative leaders have met twice this month to discuss budget issues and a third meeting has been scheduled. An appropriations bill was approved nearly unanimously by the legislature and signed into law by the governor that would provide funding to pay lottery winners, send Motor Fuel Tax receipts to municipalities and counties, and provide funding for domestic violence shelters and for home heating assistance to low income households.

The governor has also indicated that he will trim down the list of his proposed reforms for these negotiations, and House Speaker Michael Madigan is beginning to outline his budget revenue plans. Though there is a long way to go before any agreement is reached, these types of movements are essential to the process.

School board members and administrators need to stay engaged in conversations with their legislators as budget discussions move forward.  Key issues supported by the IASB and the Alliance partners are still part of the budget compromise mix, including mandate relief for school districts, the repeal or major re-write of the law that stifles a school district’s use of third party contractors for non-education related district services, and limiting the scope of the Prevailing Wage Law as it pertains to school districts. Lawmakers need to hear from school districts that these provisions would add great flexibility and relief for school boards.

Likewise, still on the table in the budget deliberations are the issues of pension reform – which could include a shift of the pension costs to local school districts, a property tax freeze, and school finance reform. Legislators need to hear the views from their local school districts as to the concerns on these items.

Nothing will likely happen officially on the budget compromise before the end of the year, but now is the time to be part of the conversation. Legislative action could be on the agenda for January.

-- Ben Schwarm, IASB Deputy Executive Director,
Advocacy/Governmental Relations