Like Alice returning from Wonderland, Illinois legislators faced up to fiscal reality just in time for the state’s new budget year.
Their wake-up call came from Gov. George Ryan, who vetoed $565 million from what lawmakers claimed was a sound financial document, then summoned them back to Springfield to produce “an honest and balanced” budget for FY 2003.
The governor’s cuts included $546 million in appropriations from general funds, the state’s battered day-to-day checking account. For good measure, he pared $12 million in outlays from an account earmarked for education and $7 million in tobacco settlement outlays.
The action was needed, Ryan said in a message to lawmakers, because the spending plan sent to him initially was almost $500 million out of balance, a gap too wide to be bridged by one-time revenues borrowed against future resources. As the final piece of the budget puzzle, lawmakers had auth-orized the governor to sell long-term bonds for quick cash, but, Ryan declared, “I will not balance this budget by borrowing from future revenues. Period.”
If lawmakers balked at the cuts, he warned, they would be back later in the summer to vote for higher taxes to cover the shortfall. Faced with that ultimatum, the legislature overrode just $55 million of the vetoes, including $42 million in general funds.
The result met Ryan’s approval; the final spending plan more closely matches expected revenues for the next 12 months. As long as projections hold, “then we should be OK,” he said. But the tenuous balance comes at the cost of painful cuts in education, human services and the state prison system, and assures the layoffs of thousands of state workers.
Major targets for the governor’s budget axe included:
- K-12 education. Ryan sliced $101 million from school allocations, including $32 million in general state aid and $48 million earmarked for such programs as special and bilingual education and student transportation. Lawmakers voted to restore the cut in general state aid and $15 million of the program cuts, for a final allocation of almost $6.2 billion in general funds for elementary and secondary education, some $53 million less than last year’s appropriation. But the bottom line includes $112 million more for pension funding, meaning there’ll be $165 million less in state funds available for classrooms around the state.
Officials note the drop in state dollars should be offset by higher property tax receipts due to rising real estate values and by more than $300 million in new federal funds. Still, about 20 percent of school districts will have fewer dollars, according to state education analysts.
- Higher education. Ryan chopped $104 million in general funds, including $38 million in scholarship money intended in part to cover fifth-year expenses for needy students. Legislators put back $5.8 million in education assistance funds pared from individual university budgets, but failed to override the other cuts.
As a result, university officials warn, students are likely to face sizable tuition increases, less scholarship money, fewer course offerings and larger classes.
- Human services. The governor axed $156 million, including money lawmakers provided in hopes of keeping open Lincoln Developmental Center and Zeller Mental Health Center in Peoria. Ryan’s plans to close both may be thwarted, however, as employees and family members have gone to court to keep them open. He also cut $60 million for prescription drugs and long-term care under Medicaid, as well as $28 million for a 2 percent rate increase for community agencies serving the mentally ill and the developmentally disabled. Lawmakers restored only $2 million in tobacco settlement funds for a senior citizen hot line on prescription drugs.
- Corrections. The governor chopped $106 million from the prison budget, including funding to keep Sheridan Correctional Center, the Valley View youth center, two work camps and a boot camp open and to forestall plans to bring in private companies to run prison food services. The cuts also will delay opening a new prison in Thomson and a new youth center in Rushville.
With the reductions, prison crowding will increase slightly, making the system more difficult to manage, officials said, but won’t result in early release for any inmates. The budget does include money for upkeep and security at the mothballed institutions, in hopes they can be reopened in better economic times.
- Other agencies. Ryan pared $78 million from other state agencies, and lawmakers restored only $500,000 sliced from the secretary of state’s operating budget. Among the more interesting casualties of the governor’s veto pen: $13.9 million earmarked for a school safety program championed by Attorney General Jim Ryan and $1 million allocated for the Main Street Program dear to Lt. Gov. Corinne Wood. The governor said nothing should be read into the vetoes, although both used him as a punching bag in the GOP gubernatorial primary won by the attorney general.
The governor also sliced a dozen or so of lawmakers’ pet projects, but left hundreds of others intact. Trimming the projects could have freed up more than $100 million for schools, health care and other core programs, but sparing them seems to have been the price for support of the tax increases counted on to help underpin the new spending plan.
Is the FY 2003 budget finally balanced? Probably not, in the traditional sense of ending the year with enough in the bank to pay the outstanding bills. By that measure, the FY 2002 deficit could be as high as $1 billion. But the governor’s vetoes guarantee that the new spending blueprint is much more realistic than the Alice in Wonderland version lawmakers initially sent him.
Charles N. Wheeler III is director of the Public Affairs Reporting program at the University of Illinois at Springfield.
Illinois Issues, July/August 2001