Illinois Governor to Extend Session if Lawmakers Miss Budget Deadline -- Update

By Douglas Belkin Features Dow Jones Newswires

Illinois Governor Bruce Rauner has this message for legislators as they struggle to deliver a budget to him by Friday's deadline: No one leaves the capital until a deal is done.

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"If the legislature fails to send a balanced budget package to my desk by Friday, we will have no choice but to keep them in session until they get the job done," Mr. Rauner, a Republican, said in a statement Wednesday.

The warning comes as Illinois lawmakers spent Wednesday in negotiations trying to end a two-year budget stalemate that has led to a nearly $15 billion backlog of unpaid bills and economic pain across the state.

Steve Brown, the spokesman for Democratic House Speaker Michael Madigan, said many Democrats believe that Mr. Rauner isn't negotiating in good faith and contrary to his rhetoric, has no intention of signing any deal.

"I think people realize that they are probably chasing a set of moving goalposts," Mr. Brown said. "There is widespread disbelief that this guy is really capable of any deal that includes a tax increase."

On Tuesday Mr. Madigan unveiled a $36 billion budget proposal but didn't spell out how much taxes would have to increase to get the state's fiscal house in order.

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If a budget isn't passed by Friday, credit-rating firms have warned they will downgrade the state's rating to junk.

On Tuesday Mr. Madigan said his budget would cut about 5% from most state operations out of their normal appropriation. A Republican budget blue-print included an increase to the individual income tax. Mr. Madigan's budget hasn't spelled out those details.

"I'm not saying that this is perfect, I'm not saying that this meets every request of the governor, but I'm saying it goes a long way toward giving the state of Illinois a good solid spending plan that responds to the real needs of the state," Mr. Madigan told reporters on Tuesday.

On Wednesday Democrats passed several pieces of legislation designed to meet demands by Mr. Rauner, who has said he wouldn't move forward unless tax increases are tied to overhauls aimed at creating a more business-friendly climate in Illinois. Among those demands: a freeze on property taxes and an overhaul of the state's workers' compensation system. It is not yet clear if the plans the Democrats passed will meet with Mr. Rauner's demands.

The shuffling of state revenue and expenses is necessary to start digging Illinois out of a nearly $15 billion backlog in unpaid bills and a $250 billion deficit to the state pension system.

The state lottery is slated to stop selling tickets this week and more than $2 billion in road construction projects are set to be halted.

"We think there should be a budget," Mr. Brown said. "There are too many things being destroyed."

The politics in the state Capitol have been fractured for so long that many believe the impasse won't be resolved until Mr. Rauner faces re-election in 2018. Lawmakers tried to assure their constituencies they are working toward passing something.

"I really do believe it's real, I mean we are four days away from a catastrophe," said Senate Republican leader Christine Radogno on Tuesday. "I think people realized that."

Write to Douglas Belkin at doug.belkin@wsj.com

(END) Dow Jones Newswires

June 28, 2017 19:14 ET (23:14 GMT)