Rauner to legislators: Pass my reforms or allow budget cuts

SPRINGFIELD, Ill. (FOX 32 / AP) - Republican Gov. Bruce Rauner offered lawmakers two distinct options Wednesday to end Illinois' historic budget stalemate: Implement his cost-saving proposals in exchange for a $36 billion budget, or give him authority to make $4 billion in cuts.

Rauner's second budget address, delivered eight months after the current fiscal year's budget should have taken effect, reinforces what he's said in the past about his openness to raising taxes - but only if lawmakers are willing to give him some of the reforms he wants.

"You choose," he told lawmakers. "But please, choose now."

Without some reforms, he added, "We cannot in good conscience raise taxes on the hard-working families of Illinois."

Democrats who control the Legislature already have balked at the idea of giving Rauner unilateral power to make cuts, repeatedly dismissed his suggested reforms, such as curbing the power of unions, and say the solution is a combination of spending cuts and raising taxes on the wealthy.

The speech only made them dig in harder.

"We're all better served ... if we follow the traditional approach, people become reasonable with each other, move away from extreme agendas, recognize that the No. 1 problem facing the state of Illinois is the budget deficit," said House Speaker Michael Madigan, who's been Rauner's chief political rival during the stalemate.

Rauner's budget with cuts would be $32.8 billion, because the state doesn't have enough revenue to match a $36 billion spending plan that would cover all expected state agency operations. Even members of his own party said nearly $4 billion in cuts is an unappealing option.

"My belief is those reductions would be so steep as to be harmful to the state overall, if we only dealt with reductions," said Rep. David Harris, the Revenue and Finance Committee's ranking Republican. He said the state must find additional revenue, whether through taxes or cost-saving reforms.

Sen. Christine Radogno, the Republican leader in the Senate, praised Rauner's speech.

"I thought it was a fair assessment of what our choices are right now given the extremely serious financial condition that we're in," she said. "It was delivered without rancor and with a sincere invitation once again to the Democrats to come to the table and negotiate a good path forward for the state."

A few blocks from a YMCA built with private donations from Rauner, families in Brighton Park say they miss an after-school homework study hall that kept 130 children busy until 6 p.m. Burroughs Elementary ended it when Gov. Rauner's Administration last year stopped sending the $83,000 that paid for it.

“I can no longer, you know, work. Because now I have to, you know, pick him up right after school. Before I had the flexibility of picking him up at six,” said parent Ruth Diaz.

Diaz said the after-school program's elimination forced her to quit her former job as a sales manager. She's now working part-time, but earns only 20% of what she used to make. Her son, 12-year old Javier, told FOX 32 why he was happy to stay after school instead of walking home.

“This is a very dangerous community. And there's a lot gangs and stuff out there. So, the kids can just stay here and do their homework,” Javier said.

As disappointing as the elimination of that after-school program at Burroughs Elementary was for the kids and parents, Gov. Rauner in Springfield Wednesday said he's ready to cut a lot more.

“Now is the time to set politics aside and do what is right for taxpayers,” Rauner said.

“I don't think the income tax is the way to solve the state budget problems,” said Chicago taxpayer Kirt Klikas.

Returning the state income rate to 5% from the current 3.75% would cost $648 a year for the typical household, according to calculations done by the Illinois Policy Institute.

At Burroughs Elementary, the Brighton Park Neighborhood Council still operates another after-school program. Members of the teachers union and some parents talk of taxing the rich if that's what it takes to resurrect the homework study hall for 130 students.

FOX 32: If you could talk to the governor and the General Assembly, what would you tell them?

“To bring back our programs. It's necessary. It helps all of our children and parents, too,” said parent Crystal Rojas.

Illinois faces a roughly $5 billion budget deficit this year, and its unpaid bill backlog could reach almost $26 billion by 2020 if current revenue and spending policies continue. Since the beginning of this fiscal year in July, several social service programs have closed or seen massive cuts, and officials at the state's public colleges and universities are worried their institutions will be permanently harmed if a budget doesn't come soon.

A roar of chants calling Rauner to fund higher education filled the third-floor rotunda during the budget address, with hundreds of Illinois college students yelling, "Save our schools!" Demonstrators booed him following his speech.

The predicament of giving a budget address for the future while still having no spending plan for the current year mystified Democrats.

"We're more than halfway through a budget year with no budget, and now we are debating what could best be described as sketches for a budget for next year, so it almost wasn't a budget address," Senate President John Cullerton said.

Many of the sticking points in the ongoing battle haven't changed, including negotiating a new labor contract with the state employees' union that would save $3 billion over three years.

Rauner wants state labor regulators to determine whether the negotiations with the American Federation of State, County and Municipal Employees are at an "impasse," a declaration that would open the door for him to impose his on terms on state workers. Democratic leaders have remained steadfast in their support for AFSCME, which has been one of the party's biggest political allies over the years.

Rauner, a wealthy former venture capitalist, also remained steadfast in the pro-business political philosophy that helped him defeat Democratic Gov. Pat Quinn in 2014, emphasizing that the key to the budget crisis includes reducing worker compensation costs, passing tort reform legislation and lowering property taxes.

"To create jobs and raise incomes, we've got to change our state's reputation as being hostile to business," Rauner said.