February 20th, 2008
Greg Tuite, the Rockford lawyer and Democrat running against Rep. Ron Wait, R-Belvidere, joined the conversation by e-mail:
After reading the comments of our two Senators, all I can say is hear we go again. As usual they spout their Republican Party talking points instead of proposing solutions for the problems we face as a state. Their press releases are filled with attacks on the governor, following a pattern for the past five years. They cite the dire financial situation of the State of Illinois, yet they take no responsibility for the conditions that they have created as long term legislators. Two of the biggest drains on our budget are the unfunded pension liabilities and our unpaid Medicaid bills. These are problems that have existed for over 15 years under both Democratic and Republican administrations. Our legislators should admit that this has been a long term problem, explain it to the public and resolve to solve it. The public would appreciate the truth and and effort to deal with the problems truthfully. In reading the press releases I don’t see any proposals, ideas or solutions – only attacks. No wonder we are falling behind.
February 20th, 2008
Burzynski’s press release:
SPRINGFIELD, Ill. – Responding to the governor’s budget address on Wednesday, State Senator Brad Burzynski (R-Clare) said that as a state with the largest debt in its history, the people of Illinois deserve better than continuing a tradition of irresponsible spending.
“When you have a fiscal situation as dire we’re facing, you have to show restraint in spending,” Burzynski said. “To put the state back on track, we have to stop spending money that’s not there. We’re capable of a better budget than this.”
Despite acknowledging the state’s 2008 budget is $750 million out of balance, Governor Rod Blagojevich continued to push for more spending, borrowing, taxes and selling of state assets in the upcoming fiscal year while putting additional burdens on Illinois businesses. The governor’s budget included $917 million in tax hikes, $21.5 billion in borrowing and selling up to $12 billion of taxpayer-owned assets.
Burzynski said the governor’s plan to push ahead with a $2 billion healthcare increase isn’t the answer.
“We had the highest backlog of unpaid bills in state history, $1.7 billion according to the Office of the Comptroller,” Burzynski said. “Our first priority must be to eliminate any new spending and program expansions in the budget and stop being a deadbeat government.”
Burzynski also added that the governor and his allies in the Senate should focus on encouraging businesses to flourish – not go out of state. While the governor has proposed a one-time rebate of $300 million for businesses, he wants to hit them with more than $650 million in taxes each year.
“If you really want to secure the financial future of our state, then you need to find ways to add more jobs,” Burzynski said. “And part of that includes encouraging the business community to grow stronger. We shouldn’t be lagging behind our neighboring state in providing our citizens with opportunities.”
Currently, Illinois has lost more than 60,000 jobs in the manufacturing sector during the governor’s tenure and ranks 45th in the nation for job creation. If Illinois had kept pace with the national average for job growth, 213,000 more people would be employed today – meaning more than half a billion dollars from natural sales and income tax revenue growth.
“This is an important time to move Illinois forward,” Burzynski said. “In the past we have worked to find solutions, but we can’t do this alone.”
February 20th, 2008
Syverson’s press release:
SPRINGFIELD, IL – State Sen. Dave Syverson (R-Rockford) said Illinois families and taxpayers deserve better than the budget unveiled Wednesday by Gov. Rod Blagojevich – a budget that would continue Illinois down the path of rising debt and unemployment.
“This is more of the same ‘government by gimmick’ that we’ve seen from this Governor during the past five years,” said Syverson, the Republican Spokesperson on the Senate Appropriations Committee. “Once again, he’s seeking to impose costly new programs at a time we can’t even afford the services we already provide. And once again, he wants to pay for it by pushing the burden onto our children and grandchildren through greater borrowing and fiscal quick-fixes.”
Syverson noted that the budget hinges on several controversial proposals that lawmakers have voiced skepticism about in the past, including a leasing of the state Lottery to generate cash, raids of dedicated state funds, and billions of dollars in new borrowing that would add $1,300 in pension debt for every man, woman and child in Illinois.
Also included in the budget – more than $2 billion in new programs and spending at a time Illinois faces, by the Governor’s own numbers, a $750 million deficit.
“There should be no new programs – period – until our current programs are paid for,” Syverson said. “There is wide consensus on both sides of the political aisle that Illinois doesn’t have a revenue problem right now – we have a spending problem. The Governor is pushing ahead with costly new programs we simply cannot afford. Illinois already has $1.7 billion in unpaid bills owed to service providers across the state. The explosion of spending contained in this budget will compound that problem, and make it even more difficult for service providers here in Winnebago County to get the money that’s owed to them.”
Syverson also expressed skepticism at the more than $650 million in tax hikes on the Illinois economy contained in the Governor’s proposal.
“Under Gov. Blagojevich, Illinois has fallen to 45th in the nation in job growth since 2003,” Syverson said. “We trail every one of our neighboring states in job growth, and have lost more than 60,000 good-paying manufacturing jobs since the Governor took office. The job-killing tax hikes contained in this budget are precisely the reason we’ve lost so many jobs, and why Illinois small businesses are struggling to compete.”
Another troubling part of the Governor’s budget for Syverson is a 30 percent diversion from the state’s Road Fund, which will mean Rockford-area projects already waiting for funding will be put off even further.
February 20th, 2008
Jefferson’s press release:
SPRINGFIELD, IL– State Rep. Chuck Jefferson, D-Rockford, responded to the governor’s State of the State Address on Wednesday cautiously, recognizing the difficulties that lay ahead for the General Assembly and the State of Illinois.
The governor addressed the economic challenges facing our nation and purposed a state economic stimulus plan that mirrors the national plan. It would include a tax credit for families with children under the age of 18, a 20% tax break for big corporations that pay corporate taxes, and a capital bill.
“Many of the Governor’s proposals are lofty and it is especially important right now that the state take measures to be fiscally responsible,” Jefferson said. “In an uncertain economy with a massive budget shortfall, we need to tread very carefully before funding new initiatives. It is my priority to talk with constituents about budgetary and legislative proposals that arise in the coming months to make sure the people of Rockford have a voice in this process.”Once again, the Governor promised to focus on increasing health care programs but did not say how the state would pay for them. In the past, options to fund such increases have been cuts to other programs and tax increases on small businesses. While the governor plans to pursue a 20% tax break for corporations, Jefferson said he will continue to be fiscally responsible and stand up for small businesses to ensure that our local economy will not be devastated by the Governor’s plans.
Governor Blagojevich announced his intention to pursue a much needed capital bill. The capital bill would include $25 billion in projects across the state and several large projects for Central Illinois. The proposed bill would create 700,000 jobs throughout the state. The Governor proposed to pay for these projects by once again leasing the lottery.
“A capital plan will be an investment into the state of Illinois by creating good jobs and stimulating our economy,” Jefferson said. “It will make our state more attractive to businesses because of improved infrastructure and better schools for our kids. It is important that, in the face of economic downturn in the state and nation, we act responsibly to improve education, roads and job opportunities.”
February 20th, 2008
Gov. Blagojevich today put aside his big-spending vision and proposed something of a maintenance budget for the fiscal year beginning July 1. Here is a copy of the governor’s budget plan.
But while the governor’s budget plan lacks the huge spending and tax increases he sought last year, it nonetheless rests of several tenuous assumptions and no doubt will meet stiff resistance from lawmakers.
For instance, Blagojevich is again seeking to privatize the state lottery to generate cash necessary to support his spending priorities. But this year, he wants to lease just 80 percent of the lottery — allowing the state to keep 20 percent — rather than part with the entire asset.
His budget assumes this 80/20 lottery lease would raise $7 billion for the state over the long term. Still, the governor’s lease/sale plan last year won little traction — if any at all — among lawmakers. These dollars would be the central revenue support for a capital construction plan the governor also proposed on Wednesday.
Here is the capital budget. Here are the highlights:
The governor’s plan provides $1.9 billion in state funds and $1.9
billion in local matching funds for construction and maintenance of
schools, including $1.75 billion in school construction projects and
$150 million for school construction maintenance projects, plus $30
million to fund a new early childhood facilities program. The program
proposes $642 million to expand and make capital improvements
and repairs at the state’s public universities, $200 million to support
the capital needs of the state’s private colleges and universities and
$250 million for the state’s community college system to construct
new buildings, repair existing facilities, and replace temporary
facilities.
The $14.4 billion highway portion of the Capital Budget funds bridge
repair needs, maintenance and improvements to the state’s system
of roads, highways and interstates, and provides for new system
expansion projects; $250 million of this will provide direct assistance
to local communities to make improvements to transportation
infrastructure. Funding for rail totals $160 million, which will be used
to improve rail tracks and signals, enhance Amtrak stations,
purchase new rail passenger equipment, and make improvements to
rail freight facilities. Capital funding for airport projects total more
than $300 million for airport improvements throughout Illinois.
Illinois Works Capital Program invests $2.7 billion in funding for mass
transit agencies to purchase buses and rail cars, build train stations,
bus garages and rail yards, and reconstruct commuter rail bridges
and elevated rail structures, among other projects.
Over $1.0 billion will provide access to capital in communities
throughout Illinois to stimulate job growth, provide affordable
housing, improve community healthcare centers, make investments
in energy, improve infrastructure, develop new industries and
technologies, and attract new businesses to Illinois.
The governor’s energy plan, a component of Illinois Works, will
reduce Illinois’ dependence on foreign oil and gas, stabilize gasoline
and home heating prices, create jobs, and reduce energy use while
protecting the environment. The energy plan includes the
development and construction of ethanol, cellulosic and biodiesel
production facilities, construction assistance for up to 10 new coal
gasification plants, and the addition of 900 more E-85 pumps at
fueling stations statewide by 2010.
The governor is not seeking an increase in the income or sales tax rate, but he does propose raising a series of user fees. For instance, the Department of Natural Resources would charge “a consultation fee … for performing threatened and endangered species or natural area reviews, which are currently done for free,” under his budget. “Another example will be charging for work done on processing floodway permits, which will allow the Water Resources Program to recover its direct costs.”
Blagojevich aides said during a morning briefing that they could not immediately produce a list of all fee increases in the governor’s budget plan.
The budget does not call for entrance fees at state parks, despite published reports indicating his budget might include them.
Blagojevich also proposes selling $16 billion in bonds to bolster public pension systems — another plan that failed to gain traction last year.
The governor proposed another $300 million in spending on Illinois public schools, but he did not specify how exactly he would like the state to allocate those dollars.
The governor’s plan acknowledges that the current budget, which runs through June 30, has a $750 million deficit. Blagojevich’s budget director went out of her way to blame lawmakers for this budget hole, saying their revenue forecast was too optimistic when they approved the budget last summer. The budget plan says this hole could be filled through “fund transfers and loophole closures.” Otherwise, said Blagojevich budget aide John Filan, the state will need to cut spending.
Nonetheless, the governor’s budget plan assumes new revenue totaling $1.7 billion in the next fiscal year, which begins July 1. Blagojevich aides could not provide an exact accounting of this figure, but said it includes $300 million in new revenue from higher taxes on riverboat casinos and $575 million from the sale of the state’s 10th casino license, which has long been mired in litigation. It also includes $140 million from closing corporate tax “loopholes” and $40 million from the sale of unspecified state assets.
UPDATE 1
There are two basis prongs of Blagojevich’s budget plan: tax breaks for families and businesses, and a capital plan for Illinois infrastructure. His plan for universal health care apparently is on hold; he offered no specific plan in this budget.
The address he just delivered was as modest as his actual budget proposal. It was the most conciliatory State of the State/budget address of his administration.
Gone was the super-charged rhetoric that defined his previous speeches. He did not vilify businesses for “not paying their fair share” in taxes, as he did last year. He did not attack the State Board of Education as a “Soviet-style bureaucracy,” as he did in a previous year.
Instead, he said he looked forward to working with lawmakers and highlighted the resounding defeat last year of his own legislative agenda. He joked that he now understands the meaning of the Hank Williams tune, “I’m So Lonesome I Could Cry.”
He told lawmakers, referring to his failed plan last year for a gross receipts tax, “Needless to say, I’m not asking you to do that again.”
At one point, the famously self-centered and single-minded governor had to this to say about how best to pay for a capital plan: “I’m flexible.”
He challenged lawmakers directly at just one point, saying it’s their responsibility to send him a capital plan he can sign.
UPDATE 2
Blagojevich’s critics are not impressed. Local Republicans called the governor’s budget more of the same — feel-good programs the state can’t afford (tax credits), borrowing (bonding to bolster public pension systems) and selling assets (the lottery).
Doug Whitley, president of the Illinois Chamber of Commerce, noted that the budget plan includes a new tax on business payroll — a tax Blagojevich unsuccessfully sought last year. Whitley said businesses would rather not pay the payroll tax than get the proposed tax credits.
The payroll tax is designed to fund the expanded health care, a program the governor calls Illinois Covered. From the governor’s budget:
Illinois Employer Assessment – The costs of
Illinois Covered will be fully funded in fiscal year
2009 and thereafter, entirely through its own
revenue sources including the enactment of an
employer healthcare assessment. The proposed
employer assessment, to commence January 1,
2009, will require that all employers of more than
10 employees who spend less than 4 percent of
their payroll costs providing healthcare to
employees pay an assessment of 3 percent each
pay period. The Employer Assessment is
estimated to generate $417 million in fiscal year
2009 and nearly $1 billion per year when fully
annualized.
