This week, Whet Moser is Chicago’s Chief Budget Correspondent, reporting from Springfield as the Illinois legislature scrambles to pass its first budget in two years. Find out more about Budget Mayday.
The Senate just came back from recess, in preparation to vote on both a budget and new revenue streams—not the whole of the grand bargain, but a balanced budget (or something quite close to it).
What happened in recess? Pedicures, manicures, and body waxing got the boot from the expansion of service taxes that has been in the works for a couple years now. But tattoos and piercings would be taxed, bringing in $16 million, four times what expanding service taxes to laundry and dry cleaning will bring in.
They’re little building blocks to an estimated $5.5 billion in new revenue, about $4.5 billion of which comes from bumping the income tax to 4.95 percent; raising the corporate income tax to seven percent would bring in an additional $514 million.
On the spending side, the plan would cut five percent from “most agencies and programs” ($325 million in savings); 10 percent from universities and community colleges as compared to 2015 funding ($148 million in savings); and other cuts along the lines of Republican Senator Bill Brady’s plan, though not quite as deep. Brady’s bill is estimated to cut $3.8 billion, while the Democratic bill would cut $3 billion.
“There’s intense interest from Republicans and Democrats on resolving this crisis,” says Ryan Keith, a Democratic consultant. “They feel it every day; the school districts are more and more vocal. The real question is what they can agree on in the package.”
He explains that there are two buckets of decisions to be made: the mix of revenues and spending cuts, and policy reforms, which include “a property tax freeze, workman’s compensation… term limits, redistricting, and pension reform.” (Pension reform is included in the Democratic bill, identical to the Brady plan, estimated to save $1.25 billion, the biggest chunk of cuts.)
But as the Senate convened earlier today prior to the recess, the governor was on Facebook, talking about the second bucket, and almost exclusively about the property tax freeze, perhaps in response to J.B. Pritzker coming out against any property tax freeze last week. Democratic legislators have been hovering around a two-year property tax freeze while Republicans seem willing to compromise on a four-year freeze. Last week the focus was on workers’ compensation; negotiations on both are getting close yet still so far.
Shortly after 4 p.m., Senate Dems passed the tax hike bill (32-26) and the spending bill (33-23) along party lines. Republican minority leader Christine Radogno released a statement calling for policy reforms, specifically “property tax relief,” as reasons why her caucus did not support it. "If this package moves to the House, I hope they can approach it in a bipartisan manner,” she added.
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