Much harder decisions likely will have to be made soon, and everyone in Springfield knows it. And all of this as Gov. JB Pritzker nears a decision on whether to run for a third term and eyes a potential race for the presidency — decisions that some say are beginning to impact his leadership of a state with real problems.
Pritzker took a bit of a victory lap after lawmakers hung it up for the spring in the wee hours of Sunday morning. Illinois now has “the seventh balanced budget in a row,” and did it while continuing to make modest investments in education and other human needs, Pritkzer declared, adding that what he dubbed “the Trump (economic) slump” isn’t helping.
The Chicago Democrat has a point — up to a point. Democrats control Springfield top to bottom these days, and they were able to enact a spending plan that generally adheres to their priorities.
But the $1 billion in new taxes needed to get there includes new or expanded levies on overseas and out-of-state corporate profits, sports betting, tobacco products and short-term rental services such as Airbnb. It also relies on proceeds from a tax amnesty and a transfer of funds from the state’s road-construction fund to its general budget. It does include hundreds of millions of dollars in new incentives to get manufacturers and other firms to locate and expand facilities in the state. But offsetting that is the possibility of other, bigger tax hikes that were dangled during the session: nine-figure levies on digital ads and home delivery services.
“It was a really challenging year,” summarized Illinois Manufacturers Association chief Mark Denzler. “The good side is that we were able to pass an incentives bill that includes some really helpful things. . . .But for every step forward, we seem to take two or three steps backwards.”
That certainly is the feeling among Republicans, who though a super minority in the General Assembly are generally not as hard right as their congressional counterparts.
House GOP Leader Tony McCombie bitterly complained that her party was left out of the key budget decisions, with the Democrats not even disclosing details of the spending plan until the day before it was enacted, and failing for the first time in many years to even consult and meet with her Senate counterpart.
Democrats as a result will face “many challenges” on their own later this year if GOP-controlled Washington decides to make deep spending cuts that could cost Illinois’ Medicaid program alone hundreds of millions of dollars in lost revenue, McCombie said.
The majority did make some spending cuts. At Pritzker’s request and over the opposition of the Democrats’ progressive wing, lawmakers voted to eliminate state-paid health insurance for undocumented immigrants aged 42-64. They also slashed an afterschool program, pared $100 million from health care programs, and limited a hike in spending on state universities to 1% from the 3% bump originally requested by Pritzker.
But overall proposed spending still rose 3.9%, according to Capital News Illinois. Conservatives were disappointed. “If ever there was a budget where we needed to live within our means, no new taxes . . . this was it,” said Senate GOP Leader John Curran.
That reality — tax hikes now are really, really unpopular with voters — is what sunk the transit deal.
The initial transit bill unveiled by Sen. Ram Villivalam, D-Chicago, just hours before hitting the Senate floor won general backing for its proposal to concentrate decision-making power in the hands of a new Northern Illinois Transit Authority, which would have more control over the Chicago Transit Authority, Metra and Pace than the current Regional Transportation Authority. Dissension was limited to few points, such as whether to reconsider the proposed extension of the billion-dollars-a-mile CTA’s Red Line from 95th Street south to the Chicago city limit.
There was absolutely no consensus on the other piece of the bill: how to raise up to $1.5 billion a year that the RTA says is needed to avoid 40% service cuts and make some modest improvements.
The first plan, to impose an extra fee on Illinois Tollway patrons and divert an existing suburban sales tax to transit, drew huge blowback — and a public knockdown from RTA Chairman Kirk Dillard, who said it wouldn’t solve the problem. Plan B was to tax almost all home deliveries $1.50 each. But though the Senate narrowly agreed to that, the House balked.
Chicago now likely will endure months of increasingly dire media reports about the impact of impasse, stories about how dozens of el stations will close, evening service on Metra will largely vanish, and Pace will be limited to weekday operations. That won’t look good for Pritzker, who so far has mostly watched the unfolding transit crisis, monitoring negotiations but leaving the heavy lifting of crafting a funding plan to the Legislature. Will he now get more involved?
Villivalam, in a text, says he’s committed to keep working this summer to get a bill “over the finish line.”
Some Springfield insiders also would like to see the governor throw his support behind proposals to develop more electricity and other energy resources at affordable rates in Illinois. A big pending bill to do that stalled amid sharp differences of opinion between industry and environmental groups.
Pritzker does get credit for standing up to organized labor on a needed pension fix for so-called Tier 2 state workers hired since 2011.
Benefits now have been so cut back that they risk falling short of Social Security standards, even as the state’s pension funds collectively are more than $140 billion short of the assets needed to pay what retirees have been promised. Labor groups pushed hard for a fix that would have included substantial additional sweeteners. At Pritzker’s request, lawmakers approved for now only a $75 million fund to remedy any shortfalls.
Bottom line: Lawmakers have left Springfield for awhile. But they’ll be back soon. Voters will be watching to see how they and Pritzker navigate some very challenging times ahead.
