Gov. Rauner's budget expected to slash spending, set up battle with Illinois Democrats

Since the night he was elected, Gov. Bruce Rauner has repeatedly said he wants Illinois to be the most competitive yet compassionate state in the nation.

He's also quick to add one caveat: "We don't have the money to be able to be compassionate."

As the Republican prepares to propose his first budget Wednesday for a state that's billions of dollars in the red, many lawmakers and advocates for low-income, elderly and disabled people are bracing for major cuts to areas such as Medicaid and mental health care.

A Rauner administration official said Tuesday the governor will call for hiring more prison guards and spending more money on mental health care for inmates. He's also expected to propose reducing funding for higher education.

It's all likely to set up a big battle with the Democrats who control the Legislature, many of whom prefer to raise Illinois income tax rates that rolled back on Jan. 1 to avoid massive cuts. But Rauner has said keeping tax rates low is key to improving the state's economy — and generating the money needed to be more compassionate.

Following a meeting with Rauner and other legislative leaders Tuesday afternoon, House Speaker Michael Madigan said the governor indicated he was prepared to deliver some "tough medicine."

"I think it's fair to say he doesn't plan to propose any tax increases," said Madigan, a Chicago Democrat.

Here's a look at some things to watch as Rauner lays out his plan:

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MORE PRISON GUARDS

Rauner is expected to call for adding 473 new correctional officer positions — a move that would save about $10 million in overtime costs and make Illinois prisons safer, an administration official said Tuesday. The official spoke on condition of anonymity because the person was not authorized to speak publicly before the noon speech.

The governor also will propose spending an additional $58.5 million on mental health care and $8.3 million on assessments that can help identify inmates' needs and the risk they pose to public safety. The mental health funds are aimed at meeting a federal court mandate that requires Illinois to improve its services.

It was unclear how those line items might affect the overall Department of Corrections budget, or where the administration plans to make up for the increased spending.

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NO LAUGHING MATTERS

During Rauner's State of the State address, Democratic legislators laughed at his proposal to raise the minimum wage slower than they wanted. But they aren't likely to find anything funny in his budget speech.

The state already is running out of money for several programs, including one that subsidizes day care for low-income workers. Judith Gethner, executive director of Illinois Partners for Human Service, says it's a good example of the critical role social service programs play in achieving Rauner's goal of turning around the state's economy. Without help paying for day care, many workers may choose to stay home.

Gethner said human services has been cut more than any other area of the budget over the past few years, and additional cuts will be particularly difficult to manage.

"You can't keep going back to our well," she said. "We're pretty dry."

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MEDICAID

Rauner has said Medicaid spending is unsustainable. And it's an obvious target with the health insurance for low-income and disabled people making up roughly a quarter of the state's spending.

Among the options Rauner could consider is requiring Medicaid beneficiaries to pay a premium for their care or charging more for prescription drugs. He also could recommend cutting the amount physicians and other Medicaid providers are paid.

Felicia Norwood, Rauner's pick to head the Department of Healthcare and Family Services, was asked repeatedly during a recent hearing whether the governor planned to cut Medicaid. She declined to answer, saying she'd leave it to him to address Wednesday.

Rep. Greg Harris, a Chicago Democrat, warns that "draconian" cuts could backfire because people could wind up in emergency rooms or seeking charity care for medical conditions that are far more serious — and costly — than if they'd gone to a Medicaid provider.

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EDUCATION 'BUREAUCRACY'

During a recent stop near the University of Illinois campus in Champaign, Rauner said he was going to "demand" that there be less bureaucracy in education, though he didn't offer details.

University of Illinois spokesman Tom Hardy said university officials had been asked to prepare for cuts in state funding ranging from 20 percent to an essentially flat appropriation. If the final cut is 20 percent, Hardy said, "By all expectations it will involve some pain."

Rauner, who has said he wants to increase spending on K-12 education, also could try to close or consolidate some of Illinois' regional offices of education.

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Associated Press writer David Mercer contributed from Champaign.