Friday, July 7, 2017

A Representative's Response to Rauner's Budget Impasse

Thoughtful and Reasoned Response: Representative Kelly Burke

The veto-proof passage of a budget for the first time in over two years to be sent to Governor Rauner’s desk has elicited a multitude of responses from legislators to expound upon the moment, the justifications and reasons for their votes.  In addition, recognizing the ephemeral nature of this bi-partisan action, Democrats and Republicans alike are extending support to each other.  This is especially true for Democrats who realize the courage and political jeopardy many Republicans were willing to face with the current Governor, who has threatened and displayed a penchant for using his riches and his friends to help or hinder. 

I first met Representative Kelly Burke in her freshman year as a Representative in the General Assembly.  Now Senator Daniel Biss suggested Glen Brown and I visit her and discuss her feelings about “pension reform.”  As a mentor of her and others first year, he believed we’d learn a bit more about what seemed to us an immoral attempt to renege on a Constitutional commitment.

We may have agreed to disagree with the Representative’s perception of the issues and her willingness to attempt to reject the contractual agreement to maintain  compound costs of living, but our conversation was factual, unheated, and lucid. 

Since then, I have had opportunity to ask for Representative Burke’s assistance in helping the homeless in Oak Lawn specifically; finding volunteers, generating bulletins and making contacts among service organizations. 
She has never let me down. 

My latest bulletin from the now veteran Representative demonstrates her comprehension of the weight and significance of the vote taken a few days ago.   

 "After two years without a budget, Democrats and Republicans from across the state came together to pass compromise budget bills and end the impasse.  The budget reduces spending significantly from current levels and also brings in new revenue.  Existing tax credits for working families and educational expenses were increased and a new tax credit for teachers was created.  Despite the rhetoric from Governor Rauner, there was much compromise in this budget and related bills.  But we did not compromise on issues he favors that would hurt working men and women in our community.  Please read on for more details.

"SB6 is the appropriations bill; it reduces spending by approximately $3 billion by making cuts throughout state government, higher education, the Medicaid program and other state services.  Even with this reduced spending, we also needed to bring in additional revenue to meet the state's obligations, including full funding of the pension systems as well as funding for elementary and high schools and social services.

"With SB9, the income tax was increased to 4.95%, slightly lower than the rate Illinois residents paid in 2014.     I have long viewed tax increases as a last resort and like many of you, do not relish paying higher taxes.  However, after two years without a state budget, it was the only option.   Fifteen Republican colleagues also appreciated the dire straits and joined in voting for the tax increase.  More Republicans joined in voting for the spending plan.

"Here's the breakdown of the crisis we were in at the end of June:
1.  Credit agencies were threatening to downgrade Illinois' credit rating to "junk" status.   Illinois would have been the first state rated as "junk" in history.  Why is a credit downgrade so serious?  With a 'junk" rating, most investors cannot buy our bonds.  Our ability to borrow would be almost impossible.  The bonds we would be able to issue would carry an interest rate much higher than those issued even this year.  Borrowing, whether short-term or long-term, is essential to keeping state services functioning.  
2.  The ongoing impasse and lack of funding hit our universities and community colleges, like Moraine Valley, very hard.  They risked losing their accreditation because of the financial strains they have been facing.  Even private colleges, like Saint Xavier University, have suffered because a key grant program for low and moderate-income students who go to ANY Illinois college was only partially funded.  A continued impasse would shred our higher education system, leaving tens of thousands of students at risk and jeopardizing the economies of many Illinois communities. 
3.  Susana Mendoza, the Illinois Comptroller, advised us that beginning in July the state's cash flow would shrink to the point where we would not have enough money to pay our bills.  This includes bills that are required by statute and court order (bond payments, state employee salaries, funds for Medicaid, payments to local governments) as well as monies our public school systems rely upon to open in August.   
4.  Finally, last week a court order was issued from a federal judge in an ongoing case filed by health care providers.  The providers are owed several billion dollars for care given to patients in the Medicaid program.   The court ordered the state to begin paying that backlog immediately and ordered payments of $600 million per month until the backlog is resolved. 
Simply put, the crisis that has smoldered the past two years risked turning into an inferno very soon.  The balanced budget bills were key to avoiding this meltdown and putting the state on the right path.  They were our last resort.   

"Despite some rhetoric you may be hearing from some quarters, both the budget and the tax increase had been heavily negotiated over the past several months.  You may have heard the terms "Grand Bargain" and "Capitol Compromise" in the news as both sides and the Governor worked through the details.    Those who urge a budget that only cuts were not realistic; a "cuts-only" budget would have required slashing up to 45% of funding for schools, higher education, corrections, and social services and would do nothing to pay the backlog of bills that have piled up during the impasse.    The budget passed spends less than Governor Rauner's proposed budget.  Even he has acknowledged the need for additional revenue.  

"In addition to the budget, the legislature has passed numerous reforms asked for by the Governor, namely authority to sell the Thompson Center, procurement reform, local government consolidation, changes to pensions and workers' compensation changes.    The legislature is also continuing negotiations with our Republican colleagues on a property tax freeze.   Again, these bills make substantial changes to existing law and directly save taxpayer money.     I urge the Governor to sign these bills so the changes can start to benefit Illinois taxpayers. 

"As a result of the bi-partisan budget bills, the State can live on.   I will continue to work across the aisle to find solutions and lift up Illinois to prosperity.     The destruction of our state was not an option for me and I believe I made the right choice. 

"I know many of you will have questions about specific aspects of the budget.  Please email your questions to me and I will do my best to get an answer to you quickly."

Kelly Burke

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