Understanding the Illinois State Budget Impasse

November 1, 2015 represented the four-month mark of the Illinois State Legislature’s failure to agree upon a budget for the 2016 fiscal year, which began on July 1. Since July, partisan clashes between Democratic supermajorities in both chambers of the Illinois legislature and Governor Bruce Rauner have largely been stalling attempts to produce a budget. Since July, attempts to produce a budget have been largely stalled by partisan clashes between Democratic supermajorities in both chambers of the Illinois legislature and Republican Governor Bruce Rauner. Throughout these budget negotiations, Rauner has faced a significant roadblock: Democrats can override a gubernatorial veto without needing to court a single Republican vote.

For both sides, getting around this barrier to pass a budget will mean negotiating the complex hierarchy of political relationships. To understand these relationships, it is necessary to investigate the causes of the budget crisis from the very beginning. Unraveling the budget impasse gives insight into the state of the partisan political sphere in Illinois and its impacts on organizations within the state and beyond.

Before the Beginning

Two key Democratic leaders have expressed much of the disagreement between Governor Rauner and the legislature's Democrats: Michael Madigan, Speaker of the Illinois House, and John Cullerton, President of the Illinois Senate.Much of the disagreement between Governor Rauner and the legislature’s Democrats has been expressed by two key Democratic leaders: Michael Madigan, Speaker of the Illinois House, and John Cullerton, President of the Illinois Senate. Madigan and Cullerton have each made numerous budget proposals, with Rauner bringing the first before the General Assembly in February of 2015.

On February 18, Rauner revealed his initial design of the new budget, calling it “the budget Illinois can afford.” He proposed spending $31.5 billion and cutting a total of $6.7 billion (the amount of the projected deficit for the coming fiscal year). Rauner’s budget included major cuts for health and human services, such as Medicaid, as well as cuts to education and local governments.

Additionally, Rauner’s first proposal included a speculative $2.2 billion in savings from potential pension reform. Critics of the budget questioned Rauner’s reliance on revenue that the state did not yet have in hand, but the governor insisted upon the policy’s future viability.

After a series of unsuccessful negotiations in the months following the governor’s proposal, Democrats in the House and Senate decided to propose a new budget in May without GOP input to counter Rauner.This decision posed both benefits and drawbacks: Democrats could come to a consensus more easily on their own than with the entire General Assembly, but the move also had the potential to alienate both the Republicans and Rauner, making compromise more difficult in the future.

President Cullerton justified the decision by claiming that Rauner left no choice for the Assembly Democrats. The new budget proposed $36.3 billion worth of spending for the new fiscal year, although some Democrats admitted that the spending proposal might not be balanced, with Speaker Madigan quoted as saying on behalf of Assembly Democrats that “we will publicly acknowledge that we don’t have the money to pay for this budget.”

The Democrats’ budget was proposed at the end of May, with just over a month left before the July 1 deadline. For Cullerton and Madigan, this rebuttal represented an attempt to force Rauner to back down from two of his key initiatives: reforming worker’s compensations and freezing tax hikes. Supporters of Rauner’s budget saw his initiatives as an efficient use of the state budget process to accomplish other goals. Madigan, Cullerton, and other critics took issue with the fact that topics such as worker’s compensation aren’t necessarily affiliated with budgeting. Democrats accused the governor of tying personal agenda items to the budget to increase their chances of passing.

While Rauner has indeed used the budget as a means for promoting his personal goals, called his “Turnaround Agenda,” including non-budgetary measures within a budget is a common political practice. However, Rauner’s actions have upset Illinois Democrats because it has only prolonged the stalemate, as he has been holding out for the passage of his policies.

The Beginning of the Crisis

On July 1, the state budget impasse officially began, though many familiar with the state of affairs in Springfield had been calling it a crisis for months.

Results of the gridlock began echoing around the state. On July 7, Diane Joan, a Cook County judge, ruled that the state could not pay state workers until a budget was passed, with an exception for jobs covered by federal laws. However, another Illinois judge ruled in contradiction, stating that a refusal to pay state workers would violate unions’ collective bargaining arrangements. The disagreement was resolved when an Illinois appellate court reversed the original ruling. However, this ruling did not eliminate negative effects for state programs such as Meals on Wheels, which was forced to start cutting back on services. Furthermore, in the face of the budget impasse, the governor ordered an emergency freeze on certain subsidies for childcare, which many criticized for adversely affecting low-income Illinoisans. Perhaps unsurprisingly, paychecks for members of the state legislature were not in danger due to a 2014 bill that ensured continued salary payment for state legislators should a budget impasse occur.

Weeks later, around the middle of July, the Illinois Senate proposed and approved a temporary budget that would keep the government functioning for one month. The proposal followed a failed Democrat-led attempt to override the gubernatorial budget veto. However, Rauner refused to sign the measure.

Power Politics and the ‘Poison Pill’

State budget negotiations between Rauner, Madigan, and Cullerton continued through the end of July and into August. Madigan was repeatedly quoted as stating that Rauner had continued to operate in the “extreme” and that his proposed spending reductions in the budget attacked programs essential to Illinois’ middle class families, while Rauner lambasted Madigan’s proposed additions to the budget.

In a slightly more positive turn of events, the state Senate approved legislation distributing $4.8 billion of federal funds to Illinois agencies and programs amid continuing budget talks. The legislation, pushed by Cullerton and supported by Rauner, allowed the state to spend the $4.8 billion of federal money, even though state lawmakers couldn’t agree on how to spend Illinois’ income from state taxes. The federal funds largely supported human services programs, especially for low-income Illinoisans. The bill also provided Illinois with $200 million that Cullerton hoped to distribute to Chicago Public Schools in an attempt to solve the Chicago teachers’ pension crisis. According to newly appointed CPS CEO Forrest Claypool, without Springfield’s support in appropriating money for the pension reform, CPS would have been facing the crisis “without a Plan B.”

The bill faced an uncertain fate in the Illinois House, however, where Madigan had recently announced his plan to amend the Senate’s bill to add an extra $1.56 billion to the block of spending, from both federal and state funding sources. According to Madigan, the additional money would have been allocated towards programs for disaster relief, breast and cervical cancer screenings, funding for assistance to children with disabilities, and Meals on Wheels for homebound elderly residents, among other programs.

Even more uncertain was Rauner’s approval of the amended bill. While Rauner supported the version passed by the Senate, he had been vocal about his opposition to “poison pill” politics, where a wrecking amendment is introduced to legislation. Specifically, Rauner did not support a section of Madigan’s extra $1.56 billion spending block, which included over $580 million from the state’s general fund. According to Madigan, most of that money would have gone on to fund childcare for low-income families, countering the governor’s emergency freeze on child care subsidies early in the budget fight.

In response to the $580 million wrecking amendment, Rauner accused Madigan of playing unfair in the political game. Madigan’s strategy to manipulate power politics would either block the entire bill to force both sides into another stalemate, or, in a less likely move, push through a bill furthering Madigan’s personal agenda against Rauner’s policies.

The Current Situation

Eventually, both the House and Senate passed, with the governor’s approval, a bill that authorized $5.4 billion worth of federal funds to “pass through” and avoid the budget crisis that concerns only the state level of budgeting. Madigan’s additional federal funds were approved, but the $580 million of additional state general funding was not. Although the state budget remained nonexistent, the compromise represented a slight step forward in the fight.

Illinois legislators reconvened on Tuesday, October 20. In the meantime, monthly pension fund payments have been postponed, and police training sessions around the state have been cancelled. The Illinois lottery has failed to pay recent winners while simultaneously continuing the sale of tickets. Illinois’s credit rating has also been downgraded, making it the lowest of any state.

While Rauner optimistically stated in mid-October that Democrats would be forced to compromise within ninety days, he has since backed down on the statement, saying he hopes to have a budget by December or even January but admitting that the stalemate could continue much longer.

Rauner has also attempted to trade favors with Mayor Emanuel in light of Chicago’s own budget deficit. The governor has promised to help ease the financial pressure on the city by doing what he can at the state level, if Mayor Emanuel pressures state Democrats to agree to Rauner’s budget cuts and anti-union policies. However, Mayor Emanuel has not voiced his opinion on Rauner’s offer, leaving the state still in the lurch.

Looking Ahead

Even if, as Rauner has hoped, the state legislature passes a budget within the next sixty to ninety days, Illinois programs and agencies that run on state funds alone or run out of federal financing may have to begin shutting their doors. According to the United Way of Illinois, almost one in three state human services agencies will run out of funds by the end of November.

However, some Republican legislators and leaders from Illinois businesses have called for a compromise, keeping Illinoisans’ hopes for a budget alive. But a few moderates will not solve the stalemate—especially if the Democratic super-majorities remain stalwart.

Even if a budget is agreed upon in the near future, the state will still face continued fallout from the months-long crisis. The state credit rating will not immediately improve, the nation’s worst pension system still needs desperate reforming in order to avoid deficits in the future, and Rauner and Madigan will probably view each other with hostility until one of the two leaves office, leaving open the potential for another statewide political fight.

Illinois politicians must realize that the potential statewide ramifications of the crisis—many of which may become realized in the coming weeks—are greater than policy losses dear to the two political parties. The state government must provide partnership, not partisanship, to solve the budget impasse.

In 1796, George Washington wrote about the danger that political factions presented to the fulfillment of democratic ideals. Washington would likely point to the state budget impasse as a prime example of the dangers of extreme partisanship, which has had a lasting impression in Illinois and the nation since the end of the eighteenth century. It seems that for Rauner and Madigan, political parties represent more than an ideological affiliation; extreme party alignment now determines each and every political move. But Rauner and Madigan are not the only ones who have to pay for the result of their actions—the externalities of these decisions affect citizens across the state. Government is intended to serve the people, not the politicians. The state of Illinois has been damaged greatly by the crisis, though it remains to be seen just how much more lasting damage the stalemate will cause.

The image featured in this article was taken by Daniel Schwen. The original image can be found here.