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Illinois Issues
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Ends and Means: The governor's budget is a political statement about his vision and campaign appeal

Charles N. Wheeler III
WUIS/Illinois Issues

A couple of weeks ago, Gov. Rod Blagojevich formally announced what most folks thought has been pretty apparent since the day he took office — he is seeking another term as the state's chief executive.

The governor's statewide flyaround followed by a few days his budget address to a joint session of the Illinois legislature, in which he unveiled a $55.3 billion spending plan for the fiscal year that starts July 1.

For most Illinois families, a budget is a financial planning tool, a blueprint for managing income and outgo to keep the household afloat. For governors, though, a budget is also a political statement, a message to voters about one's vision for the state, and perhaps most importantly, one's appeal as a candidate.

Thus, as political art, Blagojevich's fourth budget message was first-rate, and a splendid warm-up for his re-election trek.

Portraying himself as the guy who bailed Illinois out of the fiscal mess left by former Gov. George Ryan and his GOP predecessors, Blagojevich sounded a familiar refrain of the last three years — more money for schools, more health care for Illinoisans, more jobs and less crime, all without raising income or sales taxes.

And he called on lawmakers to build on that record in the coming budget year by embracing preschool for all 3- and 4-year-olds, approving tax credits for college tuition, creating new programs to train more nurses and forensic scientists, and funding more state troopers.

In all, the governor called for $25.7 billion in general funds spending, an increase of almost $1.4 billion, including $400 million more for K-12 education, an additional $423 million for health care, including his plan to provide coverage for all Illinois youngsters, and $339 million more for pension systems.

His fellow Democrats cheered, even giving their man a standing ovation. Republicans were less enthused, responding at times with groans, jeers and calls to "pay the bills!" Beyond such predictable partisan reaction, though, the governor's proposals deserve closer scrutiny if they're to be taken as something more than campaign rhetoric.

Perhaps a good place to start is whether Blagojevich has balanced the budget. The traditional measure of a balanced budget has been a simple mathematical comparison between the amount of money in the state's checkbook account at the end of a fiscal year and the amount of outstanding bills from that fiscal year yet to be paid. If there's more than enough to pay the bills, it's a surplus; if not, it's a deficit.

By that yardstick, fiscal year 2007 would be the fourth year in a row in which Blagojevich has posted a budgetary deficit. His budget office is projecting $525 million in the bank on June 30, 2007, to cover $900 million of bills, a $375 million shortfall. Still, that would be the best he's done; last year, for example, the deficit was $474 million.

Republicans argue the deficit is much greater — perhaps $3 billion to $4 billion — if pension underfunding and delayed Medicaid payments to health care providers are counted, and they're probably correct.

Indeed, sensitive to GOP complaints about the Democrats' decision to slash pension funding by $2.3 billion over two years, the governor stressed several times that state retirement systems are on sounder financial footing now then they were when he took office.

In fact, the retirement kitties in 2003 held less than half the money they would need to pay benefits already earned and guaranteed by the state Constitution. By 2005, the funding level exceeded 60 percent, thanks in large part to the $10 billion pension bond sale Blagojevich engineered in his first year.

By opting to use pension money for other worthy causes in both the current and the coming fiscal years, however, the funding level will sink to less than 58 percent by 2008, while the amount owed the systems stands at $38 billion.

And to keep the funding level at 57 percent will require an additional $2 billion contribution by 2010, for a total of $3.4 billion, according to actuarial projections for the pension systems.

Republicans also complained about how Blagojevich planned to pay for the host of other new and expanded programs stuffed into the budget. Universal state-subsidized preschool, for example, carries a projected first-year cost of $45 million, which presumably will be part of the $400 million in new money for K-12 education, as would a $10 million pilot program to hire new teachers to reduce class size for kindergarten through 3rd grade in selected schools. The money, Blagojevich said, would come mostly from new business taxes — "closing corporate loopholes" in the governor's terms — and tapping other, earmarked state accounts.

Similarly, scholarship money for nursing school programs and forensic training would be part of a $40 million boost for higher education — after three years of budget cuts — bankrolled by the proposed sale to private lenders of some $3.5 billion in student loans the state now holds. Republicans complained the deal would bring in only a fraction of the loans' total worth, but university presidents eagerly endorsed the plan, perhaps seeing it as their only chance for a few dollars more.

Despite their misgivings, Republicans seemed resigned to the inevitable — the Democratic majorities in the Senate and the House would pass the governor's budget pretty much exactly as he wished, just as they did last year, with no GOP help.

The only possible leverage Republican lawmakers have is on the governor's proposed $3.2 billion, bond-financed construction program, which would require GOP votes to reach the three-fifths majorities needed to authorize borrowing. Here, too, Republican leaders say they want to know how the governor will repay the money before they'll go along with the program.

Still, Blagojevich appears to be in a no-lose situation. If he can pick off a handful of GOP lawmakers in each chamber, he gets the bonds and the attendant project announcements. If not, he can always campaign against hard-line Republican partisans who refused to help bring 230,000 new jobs to Illinois.

So as budgets go, the governor's FY2007 proposal is a great political statement.

 

 


 

Charles N. Wheeler III is director of the Public Affairs Reporting program at the University of Illinois at Springfield.

Illinois Issues, March 2006

The former director of the Public Affairs Reporting (PAR) graduate program is Professor Charles N. Wheeler III, a veteran newsman who came to the University of Illinois at Springfield following a 24-year career at the Chicago Sun-Times.
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