Politicians in Illinois continue to bicker as state careens toward fiscal disaster

Illinois GOP Governor Bruce Rauner called the legislature back into special session this week, hoping to get a deal with the Democrats to avoid the prospect of another year without a state budget.

The fiscal year ends on June 30, and without a budget agreement for the third straight year, the state faces a fiscal calamity as bond rating agencies have indicated they will lower Illinois' bond rating - already the lowest of any state in the nation - to junk status.

Court orders forcing the state to spend money on schools and some social services, as well as paying state employees and making pension contributions, will drain the treasury dry of funds, leaving the prospect of tens of thousands of layoffs and hundreds of thousands of the poor and indigent without critical services.

And yet...the two sides can't even agree on when they should meet.

Chicago Tribune:

Such last-minute attempts to cut a deal are normally marked by hours of closed-door meetings between the governor and legislative leaders, but those talks have been nonexistent. In their place remains the political sparring that largely has immobilized state government and put Illinois on path to enter the third straight year without a full budget come July 1.

The dysfunction was on full display last week, as the sides couldn't even agree on who should be talking and when. The situation recalled December, when Rauner pulled the plug on bipartisan negotiations after he and Democratic House Speaker Michael Madigancouldn't agree on how to proceed. Since then, the pressures have only mounted.

To some extent, what's unfolding at the Capitol is following the same script as in years past. The governor and legislative leaders spend a few days both calling for compromise and accusing the other side of not being interested in negotiating one. Political messages are sent, daily news cycles tended to and pressure has to build before they sit down and reach a deal, even a temporary one.

Last year, for example, they got a stopgap budget done on June 30. The stakes are higher this time, however.

If an agreement isn't reached in the next week, ratings agencies are poised to cut the state's credit to junk status, road projects may be suspended and Illinois may be dropped from the multi-state Powerball and Mega Millions lottery games.

Come August, the state may no longer be able to afford to pay employee salaries, send money to school districts or make required pension contributions. Also at risk is accreditation for some state universities after the Higher Learning Commission issued a letter warning that a continued lack of funding "places the higher education system of Illinois at considerable risk and is injurious to the very students the system purports to serve."

Instead of action, those consequences spurred finger pointing, as some lawmakers skipped town and other sat through a House hearing on education Saturday with plans for a similar hearing on pension reform Sunday. 

Rauner put the blame on Democrats, declaring the majority party is operating in "bad faith." Democrats, meanwhile, said it's Rauner who's playing games, contending that summoning lawmakers back to Springfield was a stunt designed to "deflect from his efforts to really not work on reaching an agreement."

This is not a game of chicken. It's a dual game of Russian Roulette with both sides holding guns with a full mag. And it isn't just universities that will be at risk come August unlress a budget deal is reached. Illinois Comptroller Susana Mendoza is sounding the alarm with little effect:

[Comptroller Susana Mendoza] said Friday that in a “best-case scenario,” the state will fall $185 million short of what it needs to meet payments required by various court orders, consent decrees and state laws that have been responsible for the state to continue paying some bills in the absence of a full state budget [in August].

“We will no longer be able to fully comply with all of the court orders that determine payments in our core priority sectors,” Mendoza said. “This has never happened before.” […]

“In August, I will have zero flexibility,” Mendoza said. “I guarantee you nursing homes will close. I won’t be able to help them. I won’t even have enough money to make the core priorities that are mandated by the courts.”

Courts have ordered continued payments for some human services programs and for the state employee payroll. State law requires payments to pension systems and debt service. The state has also managed to keep current with state aid payments to schools, although reimbursements for things like transportation costs have fallen behind.

However, Mendoza said that in August, if nothing is done to resolve the budget stalemate, even school aid payments could be in jeopardy, not to mention what might happen if the state can’t make payments decreed by the courts.

Will politicians really allow the situation to get that bad? Don't doubt it for a minute. In a couple of weeks, the calls will begin on both sides of the aisle for a federal bailout of the state. The president and Republicans should resist such calls. If a state cannot govern itself, it deserves whatever consequences befall it.

The budget crisis is not a force of nature. It is a man made problem that can be fixed by people if they are willing to abandon the thoughts of political advantage and work to solve the crisis.  The entrenched interests in the state won't suffer any of the consequences mentioned above so they are perfectly willing to hold the politician's feet to the fire and demand they not give an inch.

The clock is ticking and it doesn't appear that anyone in Springfield has a watch.

 

 

Illinois GOP Governor Bruce Rauner called the legislature back into special session this week, hoping to get a deal with the Democrats to avoid the prospect of another year without a state budget.

The fiscal year ends on June 30, and without a budget agreement for the third straight year, the state faces a fiscal calamity as bond rating agencies have indicated they will lower Illinois' bond rating - already the lowest of any state in the nation - to junk status.

Court orders forcing the state to spend money on schools and some social services, as well as paying state employees and making pension contributions, will drain the treasury dry of funds, leaving the prospect of tens of thousands of layoffs and hundreds of thousands of the poor and indigent without critical services.

And yet...the two sides can't even agree on when they should meet.

Chicago Tribune:

Such last-minute attempts to cut a deal are normally marked by hours of closed-door meetings between the governor and legislative leaders, but those talks have been nonexistent. In their place remains the political sparring that largely has immobilized state government and put Illinois on path to enter the third straight year without a full budget come July 1.

The dysfunction was on full display last week, as the sides couldn't even agree on who should be talking and when. The situation recalled December, when Rauner pulled the plug on bipartisan negotiations after he and Democratic House Speaker Michael Madigancouldn't agree on how to proceed. Since then, the pressures have only mounted.

To some extent, what's unfolding at the Capitol is following the same script as in years past. The governor and legislative leaders spend a few days both calling for compromise and accusing the other side of not being interested in negotiating one. Political messages are sent, daily news cycles tended to and pressure has to build before they sit down and reach a deal, even a temporary one.

Last year, for example, they got a stopgap budget done on June 30. The stakes are higher this time, however.

If an agreement isn't reached in the next week, ratings agencies are poised to cut the state's credit to junk status, road projects may be suspended and Illinois may be dropped from the multi-state Powerball and Mega Millions lottery games.

Come August, the state may no longer be able to afford to pay employee salaries, send money to school districts or make required pension contributions. Also at risk is accreditation for some state universities after the Higher Learning Commission issued a letter warning that a continued lack of funding "places the higher education system of Illinois at considerable risk and is injurious to the very students the system purports to serve."

Instead of action, those consequences spurred finger pointing, as some lawmakers skipped town and other sat through a House hearing on education Saturday with plans for a similar hearing on pension reform Sunday. 

Rauner put the blame on Democrats, declaring the majority party is operating in "bad faith." Democrats, meanwhile, said it's Rauner who's playing games, contending that summoning lawmakers back to Springfield was a stunt designed to "deflect from his efforts to really not work on reaching an agreement."

This is not a game of chicken. It's a dual game of Russian Roulette with both sides holding guns with a full mag. And it isn't just universities that will be at risk come August unlress a budget deal is reached. Illinois Comptroller Susana Mendoza is sounding the alarm with little effect:

[Comptroller Susana Mendoza] said Friday that in a “best-case scenario,” the state will fall $185 million short of what it needs to meet payments required by various court orders, consent decrees and state laws that have been responsible for the state to continue paying some bills in the absence of a full state budget [in August].

“We will no longer be able to fully comply with all of the court orders that determine payments in our core priority sectors,” Mendoza said. “This has never happened before.” […]

“In August, I will have zero flexibility,” Mendoza said. “I guarantee you nursing homes will close. I won’t be able to help them. I won’t even have enough money to make the core priorities that are mandated by the courts.”

Courts have ordered continued payments for some human services programs and for the state employee payroll. State law requires payments to pension systems and debt service. The state has also managed to keep current with state aid payments to schools, although reimbursements for things like transportation costs have fallen behind.

However, Mendoza said that in August, if nothing is done to resolve the budget stalemate, even school aid payments could be in jeopardy, not to mention what might happen if the state can’t make payments decreed by the courts.

Will politicians really allow the situation to get that bad? Don't doubt it for a minute. In a couple of weeks, the calls will begin on both sides of the aisle for a federal bailout of the state. The president and Republicans should resist such calls. If a state cannot govern itself, it deserves whatever consequences befall it.

The budget crisis is not a force of nature. It is a man made problem that can be fixed by people if they are willing to abandon the thoughts of political advantage and work to solve the crisis.  The entrenched interests in the state won't suffer any of the consequences mentioned above so they are perfectly willing to hold the politician's feet to the fire and demand they not give an inch.

The clock is ticking and it doesn't appear that anyone in Springfield has a watch.

 

 

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