The Illinois House acted to override Bruce Rauner’s veto of a bipartisan budget/revenue plan that brings Illinois back from the brink of fiscal collapse. After two years in which Rauner held the budget hostage to his own political agenda, our state was facing crises on every front—road work/infrastructure projects halted, human services agencies shutting their doors, state universities losing students and faculty, a mountain of unpaid bills, and the looming threat of becoming the first ever ‘junk bond’ state. How could such a situation possibly be allowed to continue?
So legislators, including a small number of brave Republicans, finally had the guts to stand up to Rauner and to make the tough choices needed to save our state—cutting some $3 billion in spending and raising taxes by 1.2% (from 3.75% to 4.95%). We now have a budget!
But this fight is far from over. Calls are urgently needed to legislators who voted YES on this budget/revenue plan to say THANK YOU!
With Illinois finally on a path to fiscal stability, Rauner is on the rampage, with his usual mixture of lies and demagoguery. As a result, every anti-government extremist in the state is coming out of the woodwork, viciously attacking legislators who voted to save our state. Egged on by the Rauner-backed Illinois Policy Institute, hateful calls and emails, even death threats, are pouring in to those legislators’ offices.
The attackers offer no alternative to prevent our state from becoming a national disaster. How would they propose to fill the $4 billion dollar budget shortfall that remains after $3 billion in cuts? Their only answer is to support Rauner’s so-called “reforms”.
First, those aren’t really what we would count as “reforms”. Rauner’s demands included cutting the pensions of public employees, cutting benefits for injured workers, and slashing funding for the CMS group health plan. Second, there’s not a shred of evidence that making any of Rauner’s so-called “reforms” could close the budget gap or stabilize the state’s finances going forward. So even if they were passed, we would still need to raise taxes and cut spending.
It is all too easy right now to just breathe a sigh of relief that we finally have a budget—and try to move forward with our work and our lives. But if we do that, we leave the field to Bruce Rauner and his anti-government extremists.
Governor Rauner’s continued stonewalling—of a new state budget and the revenue to fund it is absolutely essential for the future of our state. Under Rauner’s tenure Illinois has built up a mountain of debt so high that Illinois was on the verge of becoming the first state ever to sink to a ‘junk bond’ status.
Below are a few key points about the budget/revenue plan that was enacted:
FACT #1: The increase is actually 1.2%–the tax rate goes from 3.75% to 4.95%–and that’s actually a little less than the rate that folks were paying three years ago.
FACT #2: Talk about hypocrisy. Rauner is ranting about how burdensome the recently-enacted tax increase would be for Illinois citizens. But that tax increase means someone earning $60,000 would pay just an additional $720 a year, while Rauner is trying to impose health care increases on state employees and state university employees that would cost an employee making $60,000 an additional $3,700 a year! Now that’s burdensome!
FACT #3: For someone making $40,000 per year, the tax increase of course would be less, coming to around $10/week. And it will actually cost most middle income folks less than 1.2% because of the personal exemption and federal income tax deduction, while costing moderate income folks much less because the Earned Income Tax Credit is actually expanded.
FACT #4. It is completely false to say there are no cuts in this budget. In fact, the budget makes many painful cuts–$3 billion in all–including a 10% cut in funding to state universities, a 10% cut in funding to local governments, and a 2-8% cut in every state agency.
The budget has several positive aspects for state employees:
- This budget fully funds Group Health Insurance for FY 18. We beat back Rauner’s attempt to slash funding for group health insurance and a related provision that would have barred any union contract that didn’t incorporate those cuts by shifting costs to employees. If Rauner had prevailed, he would have succeeding in circumventing the DOC/DJJ interest arbitration now in process and the legal dispute regarding state contract negotiations now before the Appellate Court—and he would have moved aggressively to impose his $3,000 per year cost increase on all state employees.
- This budget ensures that state government will remain open and state employees will be paid. Employees have been paid for the past two years only because of a Circuit Court order that AFSCME secured, which is currently being challenged in Appellate Court. If the union didn’t prevail in that case, state government would have shut down and state paychecks ceased.
- This budget makes relatively modest cuts to state agency operations. Unless Rauner deliberately chooses to lay off employees for his own political ends, almost every agency should be able to absorb these cuts without any layoffs. We have attached for your information Council 31’s preliminary analysis of how these cuts impact each state agency.
- The budget closes some $200 million in corporate tax loopholes.
But the budget fails to fix some key problems—and includes a least one big ‘land mine’:
- The budget appropriates funding to pay FY 17 bills, including millions of dollars owed to health care providers in the CMS group health plan—however, there are no revenues currently available to make these payments. There was discussion of bonding the debt to generate those revenues, but this was not clearly required.
- The budget does not appropriate funding for the Upward Mobility Program. Although program costs could be paid from the CMS operations budget, that was cut substantially.
- The budget does not appropriate funding for older debt, such as the back pay still owed to several thousand state employees.
- Land mine: The budget appropriates funding for several agencies as a “lump sum” rather than in specific line items as is normally done. This gives Bruce Rauner a lot of discretion as to how funds are spent within each of those agencies.
Despite these problems, the budget/revenue plan is an enormous step forward for our state—and opens the door for renewed action on several fronts. Now that Illinois is no longer on the verge of fiscal collapse, AFSCME will focus on:
- Fending off Rauner’s attacks on the new budget—and his continued efforts to cut public employee pensions, raise employee health care costs, and cut benefits for injured workers. We’ve attached for your use Talking Points developed by the Illinois Working Together coalition, as well as quotes from Republican legislators who supported the budget plan.
- Building legislative support for the supplemental appropriation needed to secure the back pay owed to state employees.
- Building broad public support for a fair, graduated income tax in which the wealthy pay their fair share, so that Illinois will never again have a ‘flat’ tax increase which effectively falls most heavily on middle-income families.
Courtesy of AFSCME Council 31