Sen. Dan McConchie floats Illinois budget without new taxes, ponders ongoing stalemate

One of McHenry County’s state senators is half of a partnership that has developed and released a proposed balanced Illinois budget that doesn’t raise taxes.

Calling Republican Sen. Dan McConchie's plan a long shot at ending an almost two-year budget impasse is an understatement. Besides the ongoing stalemate between Republican Gov. Bruce Rauner and Democratic House Speaker Michael Madigan, the Democratic Party holds a Senate supermajority, and all eyes have been on a proposed but apparently stalled "grand bargain" that couples some reforms with massive tax increases.

But McConchie’s proposal, he told the Northwest Herald Editorial Board on Thursday, does what other budget proposals have not by proving that the state budget can be balanced without asking taxpayers for more.

“To date, we’ve said only, ‘We need more of your money.’ We can now say, ‘Here’s what it looks like to live within our means, and let’s have a conversation about this,’ ” said McConchie, R-Hawthorn Woods.

The state has been without a budget since July 2015, save for a six-month stopgap budget approved in July. That deal expired at the end of last year, save for public education, which was funded through this summer – however, residents have no assurance that a similar deal could be struck to make sure schools open in the fall should the stalemate continue.

The General Assembly’s spring legislative session ends May 31.

The budget plan, co-authored by Sen. Kyle McCarter, R-Lebanon, is a mixture of state spending cuts, cost shifts and funding reforms that are incorporated into 17 proposed bills.

It cuts the budgets of all state agencies and departments – save for K-12 education, pensions and Medicaid for the most vulnerable – by 10 percent, and asks universities to cut spending by 5 percent.

However, during five years the plan would shift pension obligations from the state to local school districts, universities and local governments in exchange for relief from unfunded state mandates. Besides a new funding formula for public schools, the plan also includes a permanent property tax freeze on school districts, which account for the majority share of property tax bills.

The proposal includes a spending cap tied to legislator salaries, meaning legislators forfeit their pay if they violate it. Pensions for legislators would be abolished, and new state hires would be moved to a modern, hybrid pension plan first proposed by Senate President John Cullerton.

“We’re being honest with the taxpayer, so the taxpayer can look at this and say, ‘I don’t want to cut the U of I by 5 percent or Corrections by 10 percent.’ Or they can say, ‘I want to, because government is too bloated,’ ” McConchie said.

The budget standoff began in spring 2015, when Rauner vetoed a 2016 budget passed by lawmakers that was about $4 billion in the red, citing the long-ignored balanced-budget requirement in the state Constitution.

Rauner, who was elected in 2014 on a platform of ending Illinois' downward spiral by enacting business- and taxpayer-friendly reforms and curtailing the power of public-sector unions, will not entertain the thought of increasing revenue without the Democrats backing some of his "Turnaround Agenda."

Democratic leaders, on the other hand, call many aspects of Rauner’s agenda hurtful to middle- and working-class people, and consider the budget and reforms to be two unrelated issues. Rauner has since backed off from the proposals Democrats find particularly objectionable in hopes of getting a budget passed.

Although the state has no budget, about 90 percent of state expenses such as employee salaries are being paid through court orders and consent decrees. Other expenses, such as getting state income tax refunds, are paid under the law regardless of whether a budget is in place.

However, payments to universities and the state's long-struggling social service agencies are far behind or not coming at all.

Cullerton and Senate Minority Leader Christine Radogno, R-Lemont, tried to craft a “grand bargain” that would incorporate some reforms in exchange for tax and fee increases. But many rank-and-file Republicans, including McConchie, called the proposed reforms woefully inadequate in exchange for tax hikes.

Republicans point out that raising the income tax to help fix the state’s problems already has been tried. Lawmakers enacted a four-year, 67 percent tax increase in 2011, but more than 90 percent of it was swallowed by the state’s ballooning public employee pension obligations, which now account for more than 20 percent of the state budget.

The budget plan floated by McConchie and McCarter is one of several forwarded by frustrated lawmakers. A group of House and Senate Democrats last month also unveiled a plan that would include a constitutional amendment going from a flat state income tax to a progressive tax based on income.

However, the House and Senate rules give Madigan and Cullerton absolute control over what legislation advances.

After May 31, the number of votes needed to approve a budget leaps from simple majority to a three-fifths supermajority of the House and Senate, making it even harder to get a budget passed through both houses, to say nothing of overriding a veto by Rauner if he concludes the attached reforms are inadequate.

McConchie said blowing the May 31 deadline could mean another, far worse deadline in August if public schools can’t open for the fall because they don’t have the money.

“We have to determine whether schools become a pawn in this debate or not – whether we’re able to get down the road on this,” McConchie said.