By John O’Connor
AP Political Reporter
SPRINGFIELD – Democrats began refashioning an Illinois budget plan Tuesday that could win Senate approval without Republican votes as the May 31 deadline for action looms and lawmakers try to avoid starting a third consecutive year without an annual economic outline.
Sens. Heather Steans and Toi Hutchinson, key Democrat budget negotiators, unveiled adjusted plans that increase spending by $800 million over last week’s proposal and carves out exceptions to expanding sales taxes for the first time to services. Republican Gov. Bruce Rauner didn’t mention either in a social media appearance, instead continuing to call for a property tax freeze.
A budget closely in line with a proposal initiated by Senate Republicans was endorsed last week 31-21 — without any GOP votes. And language to authorize spending — and to implement painful cuts to Medicaid and grant programs many Democrats hold dear — failed.
This week, after five months of trying to negotiate what’s been known as the “grand bargain” budget compromise, Democrats are preparing to go it alone so there’s time for House action. Budget votes after May 31 would require a three-fifths majority.
“The fear really is that we won’t have enough time to get this over to the House for 118 other people to weigh in and then get it to the governor,” said Hutchinson, who lives in Olympia Fields.
Such routine action carries additional drama when it’s May in Illinois. The state has been without an annual budget since summer 2015, the longest fiscal stalemate of any state in the nation in modern times. The state will end the fiscal year June 30 nearly $6 billion in the hole, not counting a $14.4 billion heap of overdue bills.
And there’s still a wide chasm between the Democratic-controlled General Assembly and GOP Gov. Bruce Rauner to close. Rauner’s main resistance to a budget deal — and the income tax increases most people agree are inevitable to tackle the deficit — remain unsettled even in the Senate, let alone the House. Those include cost-cutting savings to the workers’ compensation program as well as the freeze on local property taxes.
A Senate plan to freeze real estate taxes for two years failed last week. Democratic Senate President John Cullerton of Chicago has said anything longer than that would cripple school districts, who rely on property tax revenue. Rauner made it an issue in a “Facebook Live” appearance Tuesday.
“We need a true, lasting property tax freeze, along with local control,” Rauner said. “That is the issue in the budget negotiations today.”
Hutchison and Steans pointed out that the Senate budget numbers fall within the GOP’s framework based on Rauner’s demands. The adjusted spending level of $37.3 billion is the same level Rauner proposed in February, when he produced a “balanced budget” with a line totaling $4.5 billion attributed to successful completion of the Senate’s “grand bargain.” Steans excised a Republican-promoted $430 million cut to Medicaid to lure Democratic votes, but she said there’s still $3 billion in reductions.
The revenue package includes a 32 percent increase in the personal income tax rate from 3.75 percent to 4.95 percent. It would raise $5 billion when combined with hiked corporate income taxes. It closes three corporate-tax loopholes and expands the sales tax base for the first time to services, but a lot fewer than previously proposed. The 6.25 percent sales tax would be applied to services such as dry cleaning and laundry, storage units, vehicle maintenance and tattoos and piercing. The latest version removes other personal services, landscaping and home maintenance.