SPRINGFIELD, Ill. — It was an ambitious schedule and ultimately state lawmakers couldn’t meet it.
The House and Senate failed to conclude their business Friday after a whirlwind three-day session. Both chambers will return Saturday with a still lengthy list of issues facing them, not the least of which is approving a new state budget.
“In three days of special session, Democrats and Republicans have taken significant steps forward under extraordinary circumstance,” House Speaker Michael Madigan said in a statement. “When committing ourselves to this session, we acknowledged that the work before us would take at least three days. We must continue our work to provide relief and support to all Illinois communities and the people of Illinois affected by this unprecedented crisis.”
Although they did not finish their work, lawmakers did make progress on some issues. The Senate approved Senate Bill 1589 that contains a number of provisions to address education issues that have come up because of the coronavirus, including waiving some requirements for educator license applicants and waiving a requirement that teacher candidates must student teach in the spring of 2020.
Both chambers approved a hospital assessment program that will secure and extra $450 million in Medicaid reimbursements for the state without using any state dollars. The $3.9 billion will enable the state to pay higher fees to physicians who treat Medicaid patients, something they have pressed for for years.
Lawmakers also approved a bill allowing counties to delay imposing penalties for late property tax payments and also to postpone property tax sales. Sangamon County has already announced it will delay imposing penalties. Rep. Mike Zalewski, D-Riverside, said the law is needed because state’s attorneys have given conflicting advice on whether the action can be taken without a state law.
Both chambers also approved a plan for the state to borrow up to $5 billion from the Federal Reserve to cover the costs of some state expenses that could be in jeopardy because of falling tax revenues because of the coronavirus.
Senate President Don Harmon, D-Oak Park, said the state may not borrow the entire amount depending on how much aid comes from Washington to compensate for economic damage caused by the virus.
“If there were to be significant federal relief, we may not have borrowed anything,” Harmon said.
But many Republicans, like Sen. Dale Righter of Mattoon, said relying on Washington for money may be a mistake.
“If the stimulus doesn’t come our way, will you be prepared to wade into the general revenue fund budget and make the cuts necessary?” he asked. “We may have to do (borrowing), but we don’t have to do this now.”
Legislators got some glimpse of the new state budget Friday when the House Executive Committee debated it before sending it to the House floor on a partisan 8-5 vote.
The borrowing from the federal government is part of the budget picture, but the revenue that would come if voters approve a graduated state income tax is not.
Overall, the proposed new budget holds spending flat next year. House Majority Leader Greg Harris, D-Chicago, said the budget is an attempt “to pick the best of a bunch of bad options.”
Harris said three alternatives were examined by budget negotiators. One was a 35 percent across the board cut to every spending line in the budget. Harris said that would have “decimated” a wide variety of state services, including human services that are under increased pressure to help people who have been harmed during the pandemic.
“That was something we did not want to do,” he said.
Harris said some practices used in previous financial crises were also rejected, such as giving the governor a lump-sum budget or shorting payments to pension system to free up money for state operations.
The third option was adopted. It keeps state spending flat and has the option of borrowing from the federal government to help maintain operations while state revenues are expected to plummet.
“We’re dealing with a time of unprecedented crisis for our state, both human and financial,” Harris said. “Many of the items and facts we need to do effective budget making we do not know now. We are hoping the actions we are taking are not ones that trigger additional negative scrutiny from the financial rating agencies because we are attempting to be responsible and pay all of our pension obligations and all of our debt service.”
Because of all of the uncertainties, Gov. J.B. Pritzker will be given expanded authority to move money around in the budget and hold money in reserve in order to address spending needs. However, he will also have to deliver regular reports to the General Assembly about what budget actions he takes. Also, a bi-partisan panel of legislators is being established to also keep an eye on how the governor manages the budget.
Harris also said the amount of federal money the state borrows could depend on how much money Congress decides to send to the states to help cover losses from the pandemic. At this point, the amount of that potential aid is not known. The more federal aid that comes to the state, the less that would have to be borrowed. Harris said there are discussions underway that would allow states to repay those loans over 30 years.
Holding spending flat means K-12 schools will not be getting a further increase next year under the revised school funding formula. When the new formula was installed, schools were supposed to see steady increases in general state aid for a decade at which time the formula would be fully implemented.
The flat spending plan also means local governments will not see a larger share of state tax collections from the Local Government Distributive Fund. Municipalities have complained that for years they’ve been given less money from the fund than they are supposed to receive, putting a strain on their budgets.