Gov. Rod Blagojevich says the $59 billion state budget lawmakers sent him in May is up to $2 billion out of balance. He’s calling them back to work today and Thursday to help fix the problem.
Gov. Rod Blagojevich says the $59 billion state budget lawmakers sent him in May is up to $2 billion out of balance. He’s calling them back to work Wednesday and Thursday to help fix the problem.
To the governor, it’s a simple formula: pressure the House to pass several money-generating measures already approved by the Senate and avoid a doomsday of spending cuts he doesn’t want to have to make.
But each of the answers to his budget problem has complications.
Here’s a look at the pros and cons of the ideas Blagojevich wants lawmakers to vote on this week — and why none of the ideas may end up on the governor’s desk soon:
THE BUDGET SITUATION
Blagojevich says he’ll be forced to make $1.5 billion in deep spending cuts unless lawmakers approve more money soon. But he’s shown signs that he might not go as deep as he threatened, backing off cuts in 4-H programs, Amtrak service and rape crisis centers after public outcry.
He also says there’s not enough legislative support for a plan to free up as much as $500 million by refinancing the state’s massive pension debt.
Any budget solution is complicated by the calendar, because the House needs a supermajority of votes to pass anything that would provide an immediate benefit. So Republicans, who refused to support the budget Democratic lawmakers sent the Democratic governor, would need to provide a few votes to help fill the gap in the budget they opposed in the first place.
Lawmakers for years have pushed for billions of dollars worth of new road, school and other capital construction projects throughout Illinois. Blagojevich would love to travel the state to tout $34 billion worth of projects.
PROS: The state hasn’t had a full-blown new capital plan since the late 1990s, so the need for upgrades and additions is great. Advocates say the plan would support between 500,000 and 700,000 jobs and would ensure that Illinois could tap into a pot of $9 billion in federal transportation money before it can go elsewhere.
The capital bill itself would save about $600 million in budget cuts this year by increasing money coming into the state’s tax coffers and allowing some construction projects to be covered by the capital plan rather than the regular budget.
CONS: Many lawmakers, after clashing with Blagojevich over the budget and other issues, don’t trust him to treat them fairly in deciding which construction projects get money and when. They also have doubts about the two main ways the capital bill would be funded: a major expansion of gambling and leasing the state Lottery.
The governor’s plan calls for creating three new riverboat casinos, including a mega-casino in the Chicago area, as well as putting slot machines at horse racing tracks for the first time and adding thousands more gaming positions at existing riverboats.
PROS: It’s a painless way — compared to a major tax increase — to provide billions of dollars for a capital program, Blagojevich argues. It would add gambling only in places where gambling exists, and it would keep Illinois gamblers from going out of state and lure gamblers in neighboring states to try their luck here.
CONS: Some lawmakers want to end legalized gambling altogether, so approving a large expansion in an election year would be extra difficult. The city of Chicago opposes this proposal, saying the $500 million bid price for its mega-casino is way too much.
PROS: Backers say a lottery lease is an easy way to provide a large amount of cash to help fund the capital program. It would give ownership of the Lottery to a private company for a period of time. The Blagojevich administration says the private sector could make money off the Lottery by expanding its reach and running it more efficiently.
Lottery revenues have been stagnant for many years. The lease proposal would ensure schools keep getting the more than $600 million a year they now get.
CONS: Some lawmakers don’t see the wisdom in selling or leasing any state assets, much less the lottery. They’re concerned a private operator might try to lure the poor and minorities into wasting more money on lottery games and cut back on the number of winning tickets — all in the name of making money off its investment.
They’re also worried that schools, which count on stable lottery revenues each year, eventually will be shorted. If the lottery can be run better, they say, the state should keep the ownership rights and hire a private firm to operate it.
Senate Democrats and Blagojevich support a complex proposal under which the state would “sweep” $530 million out of state funds set aside for special purposes and match that with federal Medicaid money to provide for health care and school spending needs.
PROS: Advocates say it takes money out of funds with sometimes-hefty surpluses and puts it to better use. Some funds would be exempt from sweeps, including those for road projects, veterans’ programs and environmental needs.
CONS: Critics contend these funds are set aside for important special purposes and shouldn’t be tampered with. They say any extra money in the funds is paid by users with a certain goal in mind and the state is being greedy to move it elsewhere. Some groups have filed lawsuits challenging the validity of fund sweeps in the past.
Ryan Keith can be reached at (217) 788-1518 or firstname.lastname@example.org.