Illinois' new governor calls for billions in budget cuts
Illinois' new Republican governor is calling for deep spending cuts to address a state budget billions in the red without raising taxes.
Gov. Bruce Rauner said during his first budget address Wednesday that Illinois has been living beyond its means. He says lawmakers must be willing to make unpopular decisions to make up for a more than $6 billion budget hole next year.
Rauner's address was short on details. But he said he wants to move state workers to a less-generous pension system that will save more than $2 billion. He says Medicaid and other programs also will see painful cuts.
Rauner's plans will be a tough sell in the Democrat-controlled Legislature. Many Democrats prefer to raise income tax rates that rolled back on Jan. 1 to avoid massive cuts.
Rauner wants a $300 million increase to K-12 school funding next year while calling for cuts elsewhere. Rauner told lawmakers that he wants a 6.7 percent boost in general state aid, which is state funding that takes care of basic costs of educating students. A decrease in funding to higher education is also expected to offset the bump.
Rauner says his budget proposal "presents an honest path forward."
Increasing funding for state schools was one of Rauner's chief campaign promises as he successfully challenged former Gov. Pat Quinn last year.
Rauner is proposing a new overhaul to Illinois' underfunded pension system that he says could save more than $2 billion. Rauner says reducing pension costs must be Illinois' top priority.
He wants to move workers to a less-generous pension plan lawmakers approved in 2010 for new hires. Workers hired before 2011 also could have the option of moving to a 401(k)-style plan. Police and firefighters could keep their current benefits.
Lawmakers passed a pension overhaul in 2013. But labor unions and retirees sued, arguing it was unconstitutional. The Illinois Supreme Court is considering the case. Even if Rauner could get a new plan through the Legislature, it's unlikely savings would be realized in the next fiscal year because of legal challenges.
Rauner and the top Democrat in the Illinois House agree a deal on eliminating the current budget deficit is within reach.
The Republican governor noted that the current operating plan is at least $1.6 billion short. But he says a deal with legislative leaders is "very close, literally days away." In an interview afterward, Madigan, a Chicago Democrat, agreed.
Rauner is seeking extraordinary power to move money from some parts of the spending plan to others that are short. He says a child-care assistance program is out of money and money to pay for court reporters could begin running out next month. Payroll at some state prisons will be missed starting in April.
Gov. Rauner's proposed budget would trim nearly $128 million from Chicago-area transit agencies, while increasing funding by a similar amount for road construction. The Republican's proposal says the reduction would amount to 4.4 percent of the Regional Transportation Authority's budget. The RTA's 2015 operating budget is $2.9 billion.
The RTA is responsible for financial oversight of the Chicago area's transit systems, and its budget funds Metra, the Chicago Transit Authority and suburban Pace buses.
A summary released alongside the governor's address to the General Assembly on Wednesday says the state will continue to provide $131 million to support the RTA's capital improvement bonds. State funding for downstate transit would remain the same as in fiscal 2014, and road construction funding would increase by $120 million to about $1.9 billion.