Illinois Lawmakers Try to Break 2-Year Budget Logjam

By Douglas Belkin Features Dow Jones Newswires

Illinois lawmakers are meeting Wednesday in hopes of ending a two-year budget stalemate that has led to a nearly $15 billion backlog of unpaid bills and economic pain across the state.

Continue Reading Below

Democratic House Speaker Michael Madigan unveiled a $36 billion budget proposal Tuesday, but didn't spell out how much taxes would have to rise to get the state's fiscal house in order.

Lawmakers have until Friday to pass a budget. Credit-rating firms have warned they will downgrade the state's rating to junk if a budget isn't approved.

Mr. Madigan said most state operations would take a 5% cut from 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.

Now the Democrats will vote on several pieces of legislation designed to meet demands by Republican Gov. Bruce 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.

Continue Reading Below

The proposal, which builds on a version passed earlier by the senate, will need some Republican support to pass the House. But State Rep. Jim Durkin, the House minority leader, said it remains to be seen if that would be forthcoming.

"New demands from the speaker overcomplicates closure to this process and it clearly hampers my ability to provide votes for a budget resolution," Mr. Durkin told reporters.

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 will be halted.

The politics in the state capitol have been so torturous 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 14:16 ET (18:16 GMT)