A week before the Illinois
Senate could take up a budget framework proposal, a report highlights the dire
situation state government will face with its stack of unpaid bills if the
budget impasse continues, while Illinois’ credit rating is downgraded by Fitch.
In other action during the week, the Illinois
School Funding Commission issued its report detailing a framework that could
improve how Illinois funds its schools. The goal is for lawmakers to
build off this bipartisan effort to ultimately enact a new and improved school
State’s bill backlog grows
As vendors and healthcare providers who do
business with the state continue to wait months to be paid for services, a
report from the Chicago Tribune during the week highlights the dire scenario of
Illinois’ backlog of unpaid bills if the state’s ongoing budget impasse
continues in Springfield.
Unpaid bill estimates as high as $15 billion
could be reality in Illinois by next July if lawmakers can’t come to an agreement
on a balanced budget proposal. The inability of the state to pay its
bills on time also comes with a steep interest cost, to the tune of hundreds of
millions of dollars. Last June, Illinois faced a bill backlog of $7.6
billion, but that has since grown to $10.7 billion. In addition to unpaid
bills, current fiscal year spending is also on pace to be more than $5 billion
out of balance – if passing a balanced budget remains elusive.
Also during the week, Fitch Ratings downgraded
Illinois’ $26 billion in general obligation bonds to BBB from BBB+. In
issuing their report, Fitch noted the downgrade “reflects the unprecedented
failure of the state to enact a full budget for two consecutive years….”
With the backlog and credit downgrade in mind,
Senate leaders continue their work on a comprehensive budget framework that
could ultimately put the state on a path toward a balanced budget.
Unfortunately, the framework so far includes minimal budget cuts, as well as
minimal reforms that could help grow Illinois’ economy, create jobs, and help
the state regain its fiscal footing. But it contains an abundance of tax
increases. Tax increases without significant cuts and reforms would only
make our situation worse by accelerating the exodus of people, jobs and
businesses from Illinois. I applaud the efforts of Senate President John
Cullerton and Minority Leader Chris Radogno to find a compromise
agreement. Unfortunately, the results so far are very disappointing.
Senate could vote on budget framework
The Senate could vote next
week on a bipartisan budget framework that might produce a balanced state
budget primarily through higher taxes. But without more pension reform, redistricting
reform, and spending cuts, such a budget deal could be worse than no deal at
all. WE MUST HAVE MEANINGFUL REFORMS or our state is doomed to continue
down a death spiral.
The proposed budget framework includes
legislation that would fund public universities, mental health providers,
addiction treatment centers, senior programs, breast and cervical cancer
screening programs, youth services and programs for victims of sexual assault
for the rest of the fiscal year (through June). These areas have not been
receiving funding since the emergency stopgap budget expired January 1.
Senate lawmakers return to the Capitol February 7.
Framework for school funding solution
The Education Funding Reform Commission issued
its report to the General Assembly February 1, highlighting ideas for how the
legislature could craft a bipartisan solution to the issue of creating a new
and improved school funding formula. The bipartisan framework issued by
the Commission comes after the group of 25 lawmakers from both parties and
chambers and five members appointed by Governor Bruce Rauner, met for 75 hours over
the last six months.
In the report, the Commission says low-income
children and those who live in areas of concentrated poverty require additional
resources and attention to reach their academic potential. The Commission
also concluded that as new money is added to the education funding formula, it
will be distributed first to those districts farthest from adequacy
targets. They also agreed that district-authorized charter schools should
receive adequate funding that is equitable to the funds allocated to district-managed
public schools on a per-pupil basis and consolidation in certain areas of the
state is important, but that the solution to this problem should not be reached
through funding formula reform.
Lawmakers agree that more work on the
framework is needed, but remain committed to finding a lasting solution.
Over the course of the meetings, lawmakers talked
with education experts about issues like the “hold harmless” provision ensuring
no school district loses funding regardless of its make-up (essentially a bribe
to keep school districts that should lose some funding from complaining);
funding distribution models; the relationship between school funding, mandate
relief, workforce readiness, and property taxes; reviewing the “evidence-based”
approach to funding education; exploring best practices in school funding, and
several other topics.