(Adds statements from governor, Senate president; in paragraphs
By Karl Plume
SPRINGFIELD, Ill. May 30 The Illinois Senate
gave final approval to the state's $35.7 billion fiscal 2015
budget on Friday, sending the governor a spending plan that
offsets a big tax revenue hole with one-time measures.
Temporary income-tax rate increases, passed in 2011 in the
midst of one of the state's budget pinches, are set to partially
expire on Jan. 1, causing an estimated $2 billion revenue
decline in the fiscal year that begins on July 1. The budget
bills, which were passed by the Democratic-controlled House on
Tuesday, keep most spending flat despite the projected revenue
Governor Pat Quinn had proposed making the temporary tax
rates permanent, but House Democrats could not muster enough
votes to pass the extension, which Republicans in both chambers
opposed. The House also refused to enact spending cuts to
account for the revenue loss.
The Democratic governor said lawmakers sent him an
"incomplete" budget that postpones tough decisions.
"I will work to minimize the impact of cuts in vital
services while continuing to cut waste and maintain our hard-won
fiscal gains," Quinn said in a statement.
The revenue decline will occur in the second half of fiscal
2015 as the personal income tax rate falls to 3.75 percent from
5 percent and the corporate rate drops to 5.25 percent from 7
Lawmakers said the budget is expected to add $2 billion to
Illinois' big backlog of unpaid bills, while it would allow the
governor to borrow up to $650 million from a variety of
dedicated state funds to boost general fund cash flow. These
kinds of one-time revenue measures have contributed to past
downgrades of Illinois' bond ratings, which are at the lowest
level among states.
The state has shrunk its bill pile to $4.17 billion as of
last month from $5.3 billion in April 2013, according to the
governor's budget office.
Senate President John Cullerton acknowledged that the budget
will reverse fiscal progress Illinois has made in recent years
and said lawmakers will have to revisit income tax rates.
"In order to return to this path of fiscal progress, we will
have to bring revenues in line with our growing liabilities,"
Cullerton said in a statement. "While a vote on our tax rates
has been deferred, rising costs and pressures will force the
issue at a later date."
Ahead of the budget vote in the Democratic-controlled
Senate, Republican senators held a news conference to push a
resolution to prevent a post-November general election vote on
making the income tax rates permanent.
"Lame-duck action is not something that needs to be
occurring on very controversial and important issues," said
Senate Republican leader Christine Radogno. "Those should be
reserved for the regular session of the general assembly."
(Additional reporting by Karen Pierog in Chicago; Editing by
Matthew Lewis and Mohammad Zargham)