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Governor keeping his budget plans close to the vest

Posted February 19, 2008 10:00 pm

Bernard Schoenburg

A sluggish national economy is going to be reflected in Gov. Rod Blagojevich's combined State of the State and budget address today.

Details of what's in the speech, being delivered to a joint session of the General Assembly at noon in the Illinois House chamber, have been the subject of speculation. But while the governor in past years touted highlights of his major addresses publicly in the days leading up to the event, no sweeping programs were specifically promoted early this year.

"The governor's focus is again on helping working families," Blagojevich spokeswoman Rebecca Rausch said Tuesday. "We have a keen awareness of the national economic picture and what's going on nationally, and we think that if you start by helping families, that will improve the economy."

She described that as "kind of the theme of this year's speech," but she did not get more specific.

Last year, the governor called for a gross-receipts tax on business that would have been the largest tax increase in state history and would have helped pay for expanded health-care coverage and more money for schools. However, legislators refused to go along with the funding proposal.

While a budget for the current fiscal year, which ends June 30, was finally fashioned after months of wrangling, belt-tightening has already been started by the administration, which believes a $750 million hole in the budget is due to lawmakers being too optimistic about tax collections.

"Actual revenues that are coming in are closer to what our introduced budget was predicated on," Rausch said.

She said the administration has tried to "slow down state spending," by restricting travel and hiring.

"Grants aren't going out the door," she said. "We're just slowing things down because, quite frankly, we don't have the cash."

While the annual budget address often keys on the next fiscal year - in this case fiscal 2009, which begins July 1 - Rausch did say the "the current state of the state" would also be a subject of the speech. That indicates some discussion of new revenues this year, something Rausch said the administration has been discussing with lawmakers.

She said that could include "sweeping" money from special-purpose funds, which has been done in some past years and she said could be done "pretty painlessly."

Another recurrent proposal from the governor, but rejected by lawmakers, is a plan to increase the tax certain corporations pay for software programs, which could generate $65 million annually. Closing the "canned software loophole," Rausch said, is among "things that should be done" for the current fiscal year.

One large piece of unfinished business from last year is a capital plan, to build roads, bridges and schools across the state. Kent Redfield, a professor of political studies at the University of Illinois at Springfield, thought it likely the governor would renew a call for such a plan. He likened it to a "stimulus package" for the state.

"The one thing that helps the economy short term, in terms of sales tax receipts and income tax receipts and everything else, is to be building school buildings and bridges and roads," Redfield said. "That puts contractors to work and labor unions to work. … I think that the pressure is obviously still huge to do that, particularly within the context of revenues going down and the national economy. … The question is, what are you going to do for a revenue source?"

Blagojevich in recent months had reluctantly said that adding more casino gambling to Illinois could fund a construction plan, but it's not clear if he will continue on that path.

Redfield noted that in his past five legislative seasons, Blagojevich has not been shy about proposing new programs.

"His instincts are not to just kind of manage government," Redfield said. "He has shown himself, I think, almost unfailingly to want to be on the offense, proposing things, doing things. So in spite of problems with this year's budget and paying our bills and uncertainty about next year's budget, I would be surprised if he wasn't proposing more of something."

The Illinois Chamber of Commerce last week said it feared Blagojevich would push for a tax on carbon emissions from power plants and other industries. Rausch said at the time that the chamber was misguided.

Bernard Schoenburg can be reached at (217) 788-1540.

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