Illinois Entering Year Three With No Budget

After almost two years without a state budget lawmakers in Illinois are scrambling to hammer out a deal before the fiscal year ends Friday

Madigan also has demands, including that Rauner rescind a promised veto of legislation to boost state funding to impoverished schools, require rate regulation of companies selling workers' compensation insurance and require an open bidding process for a planned $9 billion contract for managed health care.

Some House leaders expected after meetings Friday night and Saturday morning that the chamber would proceed with a final vote and a roll call on a $5 billion income-tax increase to support it. Republicans reacted angrily to the unexpected development. All Democrats voted for the measure, and House Republicans were nearly evenly split. "Illinois is now at risk of entering a negative credit spiral, where downgraded credit ratings would trigger contingent demands on state liquidity, further exacerbating its fiscal distress".

IL has a $6.2 billion annual deficit and $14.7 billion in unpaid bills. It will also seek to prevent the state's credit rating from being downgraded to "junk" status. There's general agreement that a revenue package will include raising the personal income tax rate from 3.75 to 5 percent.

There's a sign that a state budget will be passed this weekend. Not just to get passage but to bring us past 71 and that to me is my commitment to you that we continue our work today.

The State Journal Register reports that House Speaker Michael Madigan has indicated that the House will remain in session tomorrow to finalize negotiations on the tax package and hash-out other issues.

Friday, the House passed one major slice of the budget plan: the spending bill.

While a tax hike is always controversial, stakes are higher given both the gravity of Illinois' financial distress, and the 2018 elections. They say their plan is balanced - with spending cuts and tax increases.

- About $36.5 billion in spending, some $2.4 billion less than the $39 billion in uncontrolled spending in fiscal year 2017. "People in every corner of the state are watching what we do, to see if we get the job done", Harris said Friday.

State Sen. Dave Syverson, R-Rockford, said Friday's vote was nearly meaningless as the bill would require Senate concurrence and it is still unclear how the other half of the General Assembly would vote.

Democratic Representative Lou Lang says the overwhelmingly bipartisan support of the spending bill from Friday's vote will send it to the Senate.

She said that would make "the unthinkable" — such as delaying pension payments or not paying state workers — very likely.

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