SPRINGFIELD -- Gov. Pat Quinn is scheduled to outline his plan for next year's budget Wednesday against a backdrop of deep budget problems that continue to dog the state despite a steep increase in the state income tax.
Quinn will deliver his budget with a backlog of $7.2 billion in bills waiting to be paid in Comptroller Judy Baar Topinka's office and with legislators still struggling for a solution to the state's crushing pension deficit.
The speech will come even as the Illinois House prepares to continue its practice of the last two years in which it makes its own declaration of the state's expected revenue next year and allocates it among appropriations committees to determine how best to spend it.
Quinn's office has been mum on details in advance of the speech.
"It's going to be an honest budget. It's going to reflect the governor's budget priorities and hold the line on spending," said Quinn spokeswoman Brooke Anderson.
Quinn is required to provide a rough outline of his spending plan and projections for the future in January. This year, Quinn warned of a $400 million cut in education programs because pension costs are taking up more of the state's resources. It also warned of a $265 million reduction in the broad category of "government services," which includes budgets for the General Assembly, courts, statewide officials and agencies under Quinn's control.
The outline also discussed cuts in economic development and human services programs.
Everything tied to pensions
Sen. John Sullivan, D-Rushville, expects Quinn to emphasize pension changes in the speech.
"That needs to be the speech," Sullivan said. "Everything is tied to that issue."
Although numerous pension ideas have been floated, none has been approved by the General Assembly. Sullivan said Quinn could lay out a budget based on no changes to underscore the effect rising pension costs are having on other state programs.
Sen. Matt Murphy, R-Palatine, said Quinn could help his cause by spelling out his support for a specific pension plan.
"A real plan that has some support behind it and looks like it could work would be the most encouraging thing we could hear," said Murphy, the Senate Republican point person on the budget.
Murphy also said the budget should reflect the fact that most of the 2011 income tax increase is scheduled to expire at the end of calendar year 2014. The budget that will be proposed by Quinn is the last one in which the full tax hike is in effect, unless lawmakers vote to make it permanent.
"We have been asking for the last two years to start budgeting as if you really mean (to let it expire)," Murphy said. "Thus far, there really has been no serious effort to put spending at levels that are sustainable if the tax increase goes down."
Page 2 of 2 - House to go its own way
The past two years, the House has gone its own path on developing a spending plan.
"I think we will do a House-based budget process just like the last two years because, quite frankly, it worked," said Rep. Frank Mautino, D-Spring Valley. "We have paid down quite a few of the bills, and we have made the pension payments. The backlog of bills is not getting deeper. We've got things moving in the right direction."
In addition to the $7.2 billion worth of bills already submitted to Topinka, her office estimates another $2.5 billion in state obligations have not been forwarded yet from state agencies for payment.
Mautino said a key issue in next year's budget will be deciding how much money to devote toward reducing the backlog. Money used to pay off the old bills is money that can't be spent on maintaining education or health care programs, two of the biggest outlays in the budget.
Rep. Greg Harris, D-Chicago, a member of the House Revenue Committee, which is developing the House spending plan, put out an email last week indicating discretionary spending might have to be cut by more than $300 million. Although tax revenue is expected to increase next year, pension costs are projected to rise by $968 million and Medicaid by $441 million, among other increases.
"This year again looks to be an incredibly difficult year," Harris said at the conclusion of his email. "What took decades to do will take several years to fix, so this will be a continuing process."
Doug Finke can be reached at (217) 788-1527. Follow him at twitter.com/DougFinkeSJR.