Gov. George Ryan challenged lawmakers Monday to approve a revamped $54 billion state budget that would increase taxes on smokers, riverboat casinos and people buying new homes while slashing the number of state workers.
Making what may be his last appearance before the legislature, a frustrated Ryan sought to use the last vestiges of his political power by calling on rank-and-file lawmakers to break a budget impasse with legislative leaders and plug a nearly $1.4 billion revenue shortfall.
“My focus on solving this stalemate is unwavering,” Ryan told lawmakers, who met for an extraordinary Memorial Day session. “I have said many times that while politics is a popularity contest, governing is not.”
Ryan, whose popularity is at historic lows because of a scandal that has overshadowed his tenure as governor, squarely laid the blame of the fiscal crisis on the economic tailspin caused by the Sept. 11 terrorist attacks.
Ryan insisted his free-wheeling administration has kept spending under control and he derided “less knowledgeable” critics who claimed his administration was guilty of fiscal mismanagement.
Ryan’s 35-minute speech was not interrupted by any applause–an icy departure from the customary reaction to addresses by governors. For his part, Ryan chastised the very lawmakers whose help he needs to pass the budget, accusing them of election-year pandering for opposing his efforts to close the deficit.
“This wasn’t a night for applause,” Ryan said later. “As I said, I don’t know anybody here that’s happy with our budget.”
Ryan called for hiking cigarette taxes by 50 cents a pack, boosting the overall state levy to $1.08. He also proposed raising taxes on the most lucrative riverboat casinos from 35 percent to 40 to 50 percent. But he opened the door to putting more gaming positions on existing riverboats–a plum the industry seeks–to increase the state’s overall take.
In addition, he called for tripling the state real-estate transfer tax, from 50 cents to $1.50 per $500 in value, that is levied when a property is purchased.
Another key revenue plank in the governor’s proposal would disconnect Illinois from a state corporate tax break that was tied to President Bush’s federal stimulus package. That would allow the state to continue to collect $240 million that otherwise would be lost.
Ryan also hoped to save millions of dollars more by slashing the state’s workforce by about 6,500 jobs through layoffs, attrition and an early retirement program.
Some layoffs will come out of the Department of Corrections, where Ryan proposes eliminating 400 sergeant positions–on top of 88 already laid off in earlier budget cutting.
The governor gave a reprieve to the minimum-security Vienna Correctional Center, which he had earlier targeted for closure. But he proposed shutting down the medium-security Sheridan Correctional Center in LaSalle County, along with two work camps, a boot camp and some work-release centers.
Ryan’s latest plan also would open a new maximum-security prison in the northwestern Illinois town of Thomson. The governor had originally said the state couldn’t afford to open the new facility.
But in proposing to juggle a combination of tax increases and spending cuts to try to balance the budget, Ryan ignored money set aside for legislative pork-barrel projects.
The governor delivered the new budget proposal after weeks of trying to bring disparate political agendas of the four legislative caucuses together.
He decided to launch one last full-court press because any budget proposal passed after Friday’s deadline would take a 60 percent vote of the General Assembly rather than a simple majority vote.
“The clock’s running here,” Ryan said. And if lawmakers don’t beat the Friday deadline, Ryan said, “it could be a long, long hot summer.”
Senate President James “Pate” Philip (R-Wood Dale) said he hopes the Senate will pass a version of the budget similar to Ryan’s proposal, although he hopes to reduce the size of the increase in cigarette and real-estate transfer taxes.
House Speaker Michael Madigan (D-Chicago) said he considers the Ryan plan a good one, though he too predicted his chamber would make changes.
“It’s a very sound budgetary blueprint, something we can work with in the House,” Madigan said.
He said he believes a majority of House Democrats will support it, but he opposes the early retirement provision and the high number of layoffs.
The governor’s proposal also called for pumping $1 billion more into the school construction fund, possibly over two years, in a plan that only has $70 million in its coffers.
But critics maintained the state’s annual infusion of funds for schools would drop tens of millions from the governor’s original February budget so some of that money can be used to help fund teacher pensions.
Another major item on Ryan’s proposed restoration list was the beleaguered Medicaid program, the state’s health-care program for the poor, which was marked for major cuts in his earlier budget-cutting sessions.
Lawmakers furiously opposed those proposed cuts this spring, and Ryan now suggests undoing some $165 million of them–or roughly half what he had been planning to cut.
He also reversed a call for the working poor to pay higher fees for state subsidized child care, and he would restore most cuts to developmentally disabled and mentally ill programs.
All told, the governor’s new spending cuts and revenue changes would give the state some $1.3 billion to throw into its budget hole.
In addition to big-ticket items like the cigarette, riverboat and real-estate transfer tax, Ryan plans to cut the higher education budget by eliminating a fifth year of scholarships for students now receiving money through the Monetary Award Program.
Ryan said he could save money by implementing new personnel management policies in the agencies, a scheme that includes an early retirement program. He would shift money into the state’s checking account from other cash-rich funds, in addition to keeping the tax the state presently imposes on photo processing but distributes to units of local governments.
Ryan suggested authorizing borrowing of up to $1 billion to pay the state’s overdue bills. He faces problems with that plan because Comptroller Dan Hynes, whose approval is necessary, has yet to sign onto it.
Ryan said he expected a budget bill to pass before the deadline but insisted no deals have been made.
Even if lawmakers added millions of dollars to the budget legislation, the governor could keep the budget under control with his veto pen.
And lawmakers wishing to override the governor’s changes are not scheduled to return to Springfield until after the November election–when all 177 legislative seats are up for grabs.
