Even top administration officials may be surprised this week when Gov. James Thompson unveils his 11th budget, a tightly guarded blueprint almost certain to include a major tax increase or bare-bones spending.
Only Thompson and a handful of his most senior aides know the contents of his budget for fiscal year 1988, which begins July 1.
So encompassing are the veils of secrecy that even Thompson`s Cabinet members and legislative leaders are not going to be briefed on the budget until hours before it is released Wednesday.
In an administration famous for dribbling out leaks to the rumor-hungry capital, Thompson`s attempt to control the flow of information has fueled speculation that his spending plan is going to be controversial and is likely to include a tax increase.
”No leaks,” Thompson said last week to reporters at the National Governors Association winter meeting in Washington.
Some department spokesmen have been given only sketchy information about the budget and told to write their news releases without numbers, leaving blanks to be filled at the last minute.
”We`re going for the world`s record,” said David Fields, the governor`s press secretary. ”We continue to button our lips.”
Fields said the governor and his small circle of senior staff members decided that it would be better for the administration to keep the budget under wraps so that Thompson can explain the entire package at once.
In late January, Thompson told bond-rating houses in New York that he would present a budget balanced by a tax increase, spending cuts or a combination of the two.
Since then, Thompson has said he is considering a number of plans, including extending the state`s 5 percent sales tax to cover a wide range of services and occupations. But a sales tax on professionals would face a torrent of opposition from special interest groups, making it difficult, if not impossible, to get through the legislature.
Close advisers have urged him to increase the state`s income tax, which has been unchanged for 17 years, except for a temporary increase in 1983. Other key state officials have urged him to avoid a politically explosive income tax increase.
Department directors reportedly were told by Robert Mandeville, Thompson`s budget chief, to prepare budget proposals equal to their current spending levels.
”His menu of options is just too long for anyone to really predict what he is going to do,” an administration source said.
Not even the color of the budget book is known for sure. Fields said the book is maroon, but in Washington last week, Thompson said it was ”bloody red.”
What is almost certain in all the budget discussions in the capital is that the fiscal 1988 spending plan will top this year`s more than $20 billion budget.
Thompson already must find new revenues to fund more than half a billion dollars in new expenses. He must repay $100 million borrowed to ease this year`s cash-flow problems, fund an estimated $90 million for a new collective bargaining agreement with state employees, pay $250 million in continued funding for education reform and come up with millions in new spending requested by the state`s colleges and universities.
And the only major sources of new revenue appear to be $100 million the state is expected to reap from federal tax reform and $329 million in natural growth, according to an estimate by the Illinois Economic and Fiscal Commission, the General Assembly`s revenue-forecasting arm.
Increasing the income tax for individuals to 3 percent from the current 2.5 percent levy would raise about $600 million.
Extending the sales tax to such areas as dry cleaning, lawn services, haircuts and legal and medical services would raise about $1.3 billion, according to a state revenue study done by a special committee appointed by Thompson and headed by Douglas Whitley, president of the Taxpayers Federation of Illinois.
Thompson has proposed no less than four new tax increases this fiscal year to pay for a massive road program and local sewer projects.
He has proposed increasing the state`s 13-cent gasoline tax by 9.5 cents over five years, raising license plate fees for passenger vehicles to $65 from $48 and imposing new sales taxes on nonprescription drugs and computer software.
But those tax increases are designated for the road and sewer programs.
Thompson`s larger problem is how to prop up the state`s ailing general revenue fund, from which most of the state`s regular expenses are paid. After two years of large spending increases, the general fund balance has dipped to dangerously low levels.
If he opts for a tax increase, Thompson is facing a hard sell to a skeptical legislature.
Senate President Philip Rock (D., Oak Park) has said he sees no need for a tax increase. Senate Minority Leader James ”Pate” Philip (R., Wood Dale), who sponsored Thompson`s tax increase proposal in 1983, has advocated belt tightening.
House Minority Leader Lee Daniels (R., Elmhurst) has voiced opposition to a general tax increase. And House Speaker Michael Madigan (D., Chicago) has chided Thompson for once again broaching tax increases after a re-election campaign.
”Given the money from tax reform and natural revenue growth, maybe we get by,” said Judy Erwin, Rock`s press secretary. ”But if Thompson comes in and asks for the sky and the moon, you obviously can`t meet the demand.”
Erwin also said that there is a ”huge difference” in the state`s fiscal condition between this year and 1983, when an economic recession had diminished state revenues. This time, she noted, spending increases in recent years have pinched the state`s treasury.
”He simply has not demonstrated the need” for a tax increase, Erwin said. ”In 1983, it was an obvious and critical need.”
