Springfield News

The Illinois General Assembly returned to Springfield yesterday. They have scheduled 30 days of sessions over the next 60 calendar days. While they will certainly pass many bills, the task of passing a budget in the next 60 days is very uncertain. This could be the “perfect storm” in terms of the impending budget. Speaker Madigan recently held budget hearings throughout the state that revealed that state revenues will not cover mandated programs as well as other priority programs. With no new sources of revenue, the state will incur increased debt and additional program cuts will be inevitable. No revenue sources appear to be on the horizon. It now appears that any expansion of gambling will not occur in this election year. The sale of state assets such as the lottery and tollway no longer has much luster as such acts would burden future generations with increased debt. Governor Blagojevich maintains his vow to veto any increased taxes and has no credibility to be helpful in developing a solution for the fiscal crisis. The plight of his former fund-raiser Tony Rezko has further isolated the Governor. Most citizens have already rejected his revenue schemes.

It will be interesting to see if there is any move to involve the Republicans in a plan to pass a temporary “surcharge” to the personal income tax rate. This move would require a strong three-fifths majority to override any vetoes by the Governor. This could be tied to the much needed capital program to gather needed Republican support. A capital program could also help the state access the $6.1 billion in federal funds that will soon be gone. You may remember that such an action occurred in 1983 when a .05% surcharge was temporarily added to the state income tax and later became permanent.

In other news, it was enlightening to learn that Illinois is one of just six states that does not have a “rainy day” fund to help carry the state through rough times, such as we are currently enduring. Comptroller Dan Hynes suggested such a fund back in 2002 that would take $300 million a year to create a $1.5 billion reserve fund. If you recall, Governor Blagojevich was elected in 2002 and since then our style of financial management has been to shift current financial obligations to the future generations. Stay tuned!