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STATE CAPITOL: No state budget agreement by deadline

Posted May 31, 2007 11:00 pm

Doug Finke

By DOUG FINKE

and ADRIANA COLINDRES

STATE CAPITOL BUREAU

SPRINGFIELD -- Illinois lawmakers headed into an overtime session today (Friday), unable to reach agreement on a new state budget that has now become linked to electric-rate relief.

With the spring session's midnight Thursday deadline just a few hours away, House Speaker Michael Madigan, D-Chicago, issued a schedule to members showing them working in Springfield three days a week through the month of June.

"We have plenty of work to do," Madigan said. "We have many, many bills ready to be called and considered."

Madigan, Gov. Rod Blagojevich and Senate President Emil Jones, D-Chicago, are deeply divided over the state's spending priorities, and it became increasingly apparent in recent days that the three would not reach an agreement before the deadline.

In the House, it will now take Republican votes to pass a budget, giving GOP lawmakers a greater say in how much money is spent and how the revenue is generated to pay for it. House Republican Leader Tom Cross of Oswego has repeatedly said his members want a limited-growth budget, far less than the increased spending sought by Blagojevich through $8.6 billion in business tax increases.

"We said all along that we have to live within our means," Cross said Thursday. "I'm not going to sit here and be rigid and say we can't compromise. The basic thought of no tax increase and living within our means will remain if we are part of the process."

House Republicans even voted against a scaled-down budget offered by House Democrats Wednesday because it included $300 million gained from ending some business tax breaks.

A Blagojevich spokeswoman said the governor's office would not comment Thursday.

The Senate, meanwhile, was expected to vote Thursday night on a massive gambling expansion that will add three new casinos, including in Chicago, and let existing casinos expand.

Senators also were expected to vote on a supplemental spending bill for the current budget that includes money to give lawmakers a pay raise. In addition, the bill would reimburse two dozen school districts for construction projects undertaken through the state's school construction program, including $10 million for Rochester.

Negotiators were working to reach a compromise on electric-rate relief that emerged Thursday as yet another sticking point in further budget talks. Downstate Democrats in both the House and Senate said they will not vote for any budget deal until customers of Commonwealth Edison and Ameren are given adequate relief from skyrocketing electric rates.

"We've taken a position for the last several months that we will not leave this chamber until rate relief is available to our constituents," said Rep. Tom Holbrook, D-Belleville, leader of the 20 downstate House Democrats. "The best way to facilitate that is to make sure that no budget passes until rate relief has been resolved."

"I think both chambers think the electric bill ought to be done first before the budget," said Sen. Gary Forby, D-Benton.

"We have some members in the Democratic caucus who are not going to vote on certain things unless there is a deal done," acknowledged Sen. James Clayborne, D-Belleville, one of the rate-relief negotiators.

Lawmakers and utility representatives talked throughout the day but still had not reached an agreement on relief by early Thursday night. The last offer from ComEd and Ameren provided about $500 million worth of relief over three years.

The legislature is threatening to pass a bill that rolls back electric rates to 2006 levels and freezes them for three years if the utilities don't agree to sweeten their rate-relief offer. The House already OK'd such a bill, and the Senate could vote on it as early as today if negotiations fail to produce a compromise.

"If we don't get more than $500 million, the freeze bill is going to run," Forby said.

Rep. John Bradley, D-Marion, participated in the negotiations Thursday. He declined to speculate whether an agreement can be reached but said "talks have been positive."

The fight over electric-rate relief essentially put on hold further negotiations on a state budget for the fiscal year that begins July 1. Holbrook, who voted for a House Democrat budget plan Wednesday, filed a motion Thursday to have the House reconsider what it did. The move keeps the budget plan stalled in the House.

However, Senate Democrats weren't likely to consider the House plan anyway.

"Clearly, no one on this side agrees with the budget we've heard about," Clayborne said.

"It (the House plan) is a starting point," said Sen. Donne Trotter, D-Chicago, a lead budget negotiator for the Senate Democrats. "We feel there should be more (spending) there because the people of Illinois deserve more."

The House Democrat plan increases state spending by about $800 million, with roughly $400 million of that going to education. The money would come from natural revenue growth due to economic expansion and by ending $300 million worth of business tax breaks.

It does not provide money for Blagojevich's universal health-care plan and far less than the $1.5 billion education spending increase he sought.

Most other state spending would remain flat, meaning the House Democrats' budget wouldn't cover some mandatory increased expenses such raises in union contracts.

Rep. Frank Mautino, D-Spring Valley, acknowledged the budget passed Wednesday is only a stop-gap, designed in part to keep state government running if Blagojevich and Madigan continue their stalemate through the summer over how much the budget should grow.

Mautino said the House Democrats' spending plan could get state agencies at least past January before cash would start running low and lawmakers would have to approve additional spending. By that time, though, additional spending could be approved just with Democratic votes, again cutting Republicans out of the negotiations.

Although neither the House nor Senate appears willing to raise income or sales taxes, Trotter said more money can be raised through gambling and by ending additional business tax breaks beyond those approved in the House. That would allow for more money to be spent on education and health-care programs, though still less than Blagojevich wants.

"The governor started from the roof down, (Madigan) started from the floor up," Trotter said. "We're somewhere in the middle."

Doug Finke can be reached at 788-1527 or doug.finke@sj-r.com. Adriana Colindres can be reached at 782-6292 or adriana.colindres@sj-r.com.

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