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Despite budget approval, much is in limbo after session

Capitol News — Tue, 26 May 2020 15:58:27 +0000

By JERRY NOWICKI Capitol News Illinois jnowicki@capitolnewsillinois.com

SPRINGFIELD – Lawmakers approved a state operating budget shortly before 2 a.m. Sunday, but despite the passage of the document, nothing about the next fiscal year is black and white.

The state is depending on a broad package providing federal monetary aid to states passing through the U.S. Congress, or, failing that, borrowing up to $5 billion from the U.S. Federal Reserve at an interest rate of approximately 3.8 percent.

“Well there’s no doubt that we’re going to have to revisit the budget if the federal government doesn’t come through,” Gov. JB Pritzker said when asked if the state had a plan for a revenue stream to pay back the borrowing. “I think all 50 states are going to have to be revisiting their budgets if the federal government doesn’t come through.”

Pritzker took questions in his office at the Capitol on Sunday morning, about nine hours after the General Assembly adjourned on just its fourth day of legislative session since March 5.

The $42.8 billion budget keeps spending roughly flat from a year ago despite revenue for next year decreasing by an unknown number of billions and the potential of even further economic devastation should COVID-19 see a resurgence in the fall that coincides with a virulent flu season.

“The budget the General Assembly has sent to my desk acknowledges that massive economic disruption leads to difficult decisions,” Pritzker said.

Democrats, upon the bill’s passage, said in times of economic crisis, government needs to continue to spend instead of balancing the budget on the backs of the less fortunate.

Pritzker echoed the argument Sunday.

“There was a strong look at, you know, what could be cut,” Pritzker said. “Remember, though, this was all in the frame of a vastly increased need by families, workers, individuals all across the state.”

Republicans, however, called the budget balanced only on “a wing and a prayer.”

In House debate Saturday, Rep. Tom Demmer, R-Dixon, the GOP’s chief budget negotiator in the House, said there were billions of dollars, including some from the federal CARES Act, to be spent at Pritzker’s discretion with only limited guidance included in the budget.

“The ability for an administration to engage in emergency rulemaking and have control of more than $7 billion of state funds, with only broad strokes, broad umbrellas of programs and allocations for those dollars, I think should give members of this body pause,” Demmer said.

Rep. Gregory Harris, D-Chicago, said during debate the fact that the Legislature passed a full budget instead of a lump sum appropriation showed that it was exercising more oversight than other states were doing for their governors.

But Demmer said the governor’s emergency rulemaking track record – that he sought authority to implement misdemeanor fines for businesses disobeying his stay-at-home order – shows he didn’t earn the public’s trust when it comes to rulemaking.

“This talk about earning the authority, nobody knew a pandemic was coming,” Pritzker said when asked about Republican objections Sunday. “There’s just no way that anybody had any clue that we would be in this situation that we’re in right now.”

He said he would “do anything, give anything” to go back to a pre-COVID-19 level of normalcy.

“But here we are,” he said. “So, I think that there is a recognition anyway that we’re gonna have an unusual year here.”

Asked if he would be comfortable with the authority the Legislature has afforded him being wielded by his former Gov. Bruce Rauner, a Republican, Pritzker said, “no, that’s why I ran against him and beat him.”

“I’m going to try very hard to operate, as I have by the way, with transparency, letting everybody know what we’re doing and also why we’re doing it. And the biggest thing is listening to the science and the data.”

In regard to transparency, Pritzker said the way this year’s budget was negotiated was not ideal. The measure and everything else passed in the four-day session was negotiated by working groups of lawmakers without official avenues for public input.

“I will say that although the public wasn’t able to come in to hearings that the Legislature had, their representatives from both sides of the aisle were in fact in the working groups, it wasn’t a one-sided set of working groups, there were bipartisan groups working on these things.”

Sometimes those groups sought executive branch input, sometimes they didn’t, he said.

While Republicans went into the special session calling for a vote on the governor’s Restore Illinois five-phased business reopening plan and some sort of check on his executive authority and ability to continuously extend disaster proclamations, no such vote occurred.

The closest thing to oversight was passed in a broad-ranging COVID-19 response bill that created a 14-member commission of eight Democrats and six Republicans that would work with the Department of Commerce and Economic Opportunity to discuss the reopening plan.

The commission would be scheduled to release its first report on the reopening plan on July 1, at which time the state could already be entering the fourth phase of the plan.

Republicans called the commission “window dressing.”

“Well, the Legislature has chosen not to be involved in many of the decisions that needed to be made by the executive branch,” Pritzker said when asked about the commission. “And I think, you know, when you think about it – That’s why you have an executive branch in an emergency, I can act quickly. The executive branch can act quickly.”

While he said the General Assembly could not have met quickly enough to have input on his decisions early in the emergency effort, Pritzker said he was hoping the General Assembly would have gathered “much earlier” than last week.

On one particular measure, he said he believed the Legislature fell short. He had asked lawmakers to approve a measure allowing for monetary fines of businesses defying his stay-at-home order.

“I am very disappointed, I think it was a complete abdication of responsibility on the part of the Legislature,” he said, noting the director of the Illinois State Police asked for a measure providing such authority.

“None of us want to exercise the ability to take away someone’s license that’s been given to them by the state to do business. Nobody wants to shut down a business. What we were looking for was a way to issue a citation,” he said.

He said the state would have to “look at other mechanisms” for such enforcement, but he did not say what they are.

The governor said he is also looking at ways to implement the next phases of the plan and is considering issuing a fourth consecutive 30-day disaster proclamation.

“We want to make sure we can implement the Restore Illinois plan, and that we’re taking care that the health and safety of the people of Illinois is paramount, so we’re looking at it,” he said.

The governor also announced the release of broad guidance for industries reopening under phase 3 of his plan. That is viewable here: https://www2.illinois.gov/dceo/pages/restoreILP3.aspx.

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Lawmakers pass budget package to close out special session

Capitol News — Tue, 26 May 2020 14:54:03 +0000

By PETER HANCOCK Capitol News Illinois phancock@capitolnewsillinois.com SPRINGFIELD – The Senate on early Sunday morning passed a budget package authorizing $42.8 billion in general revenue spending next year, although much of that remains tentative depending on the progression of the COVID-19 pandemic and potential congressional action that could send more financial aid to states. The House approved the budget bill late Saturday night. The budget deal was worked out largely out of public view over the past two and a half months as lawmakers worked remotely in various informal “working groups,” and it continued to undergo changes in recent days in advance of the House debate. One key to making the budget work is a plan to borrow up to $5 billion from the Federal Reserve’s Municipal Liquidity Facility program. That program allows the central bank to purchase certain short-term debt from states to help them make up for the loss of revenue they’ve seen since the pandemic forced them to close large parts of their economy. It also authorizes another $1.5 billion in borrowing between the general revenue fund and various other state funds in order to maintain cash flow throughout the year. House Majority Leader Gregory Harris, D-Chicago, said that by borrowing from the Fed, Illinois will be able to keep state spending for the fiscal year that begins July 1 largely at the same level as this year’s spending. “If we’re going to balance the budget, I would rather not do it on the backs of people who would lose their jobs if we were to cut money to our schools, cut money to our first responders,” he said. “I don’t want thousands more people out of work.” Lawmakers expect to pay back the Federal Reserve loan with federal funds they expect Congress to approve in the next stimulus package for states. But Congress has not yet authorized such a package and there is sharp disagreement between congressional Republicans and Democrats over what that plan should look like. Both chambers of the Illinois Legislature passed a separate bill authorizing that borrowing Friday night. “What we’ve heard today is a budget that is balanced only on a wing and a prayer,” said Republican Rep. Tom Demmer, of Dixon, the House GOP’s chief budget negotiator. During the Senate debate that began after midnight, Sen. Dale Righter, R-Mattoon, said the Legislature is “gambling” with its budget plan. The spending plan for the upcoming fiscal year is spelled out in Senate Bill 264. According to an analysis of the package that was circulating among lawmakers Saturday, it essentially calls for flat funding for most state programs, including K-12 schools, which will see no increase in their evidence-based funding over their current levels, although they will not see any decrease either. Funding for state universities is also held flat at current-year levels, as is funding for the Monetary Aid Program, or MAP grants, and AIM HIGH grants. A few state agencies are slated for increases in the new budget, including the Illinois Department of Public Health, the agency coordinating much of the state’s response to the COVID-19 pandemic. Its total budget, including federal funds, is slated to grow 144 percent, to more than $1.6 billion. Included in that figure is $416 million in federal funds for testing and services provided by local health departments. The Department on Aging, which would see an additional $58 million in order to raise wages for adult care providers, transportation and homemaker service providers to $14 per hour. The Department of Children and Family Services is also slated for a 20-percent increase in general revenue funding, or about $170 million, to provide rate increases for foster care providers, to hire 123 investigative staff and to address caseload growth. During debate in both chambers, Republicans urged delaying any action on a budget until the state has a better estimate of how much revenue it will receive in the coming year, as well as how much federal aid will be available, but Democrats did not entertain that suggestion The 68-44 vote in the House to pass the budget bill appeared to fall largely along party lines, with Republicans arguing it relied too heavily on borrowing and not enough on fiscal restraint. It passed the Senate, 37-19.

CARES Act funding

The budget package actually consists of two bills – an appropriations bill, Senate Bill 264, which authorizes spending by various state agencies; and a “budget implementation” bill, or “BIMP,” in legislative lingo, House Bill 64, that enables various agencies to carry out the budget. The implementation bill sets up a number of new funds within state government that can receive and distribute money from the federal Coronavirus Aid, Relief and Economic Security Act, or CARES Act, a $2.2 trillion federal relief program that Congress approved earlier this year. The state expects to receive about $3.3 billion through that program. Harris said that money is being earmarked for direct aid to the state’s health care industry to help hospitals, nursing homes, mental health centers and other care providers absorb the cost they’ve incurred for dealing with the pandemic. He said another $1.8 billion is earmarked for the Illinois Emergency Management Agency, and it gives Gov. JB Pritzker authority to decide how it is spent. That part especially infuriated Republicans who have complained about Pritzker governing by executive authority, and about the General Assembly not exercising its oversight role. But Sen. Andy Manar, D-Bunker Hill, the Senate Democrats’ lead negotiator, said in an interview Friday that the federal money comes with significant strings attached and that it can be spent only for specific purposes, and therefore Pritzker will be restrained by federal rules. But the implementation bill also gives the governor additional discretionary authority over the spending of state funds throughout the budget. Normally governors are allowed to shift up to 2 percent of an appropriation from one purpose to another, but this year’s bill expands that to 8 percent, something that angered many Republicans. It also sets up a legislative oversight committee to monitor all executive spending in the budget as well as how CARES Act money distributed to local governments is spent. The implementation bill passed the Senate, 33-19. It later passed the House, 62-47.

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