web3State Budget
Gov. Pat Quinn delivers his State of the Budget address to a joint session of the Illinois General Assembly on the House floor at the Illinois State Capitol in Springfield. AP Photo/Seth Perlman NO SALE

SPRINGFIELD - Gov. Pat Quinn offered Illinois lawmakers a choice Wednesday: Raise the state income tax or cut spending for schools.

In a 21-minute speech to a joint session of the General Assembly, the governor outlined a gloomy $55 billion budget proposal that relies heavily on borrowing money and again delays billions of dollars in payments to people who do business with state government.

With all eyes on the upcoming election, Quinn said lawmakers could face voters in November after either cutting $1.2 billion to local school districts or bumping up the income tax rate by 33 percent.

"I have made some difficult, painful choices in this budget," the Chicago Democrat said. "You must make some tough choices as well."

The blueprint drew immediate scorn from Republicans, who pointed out that the governor, even without a tax hike, wants to spend more than the state is expected to receive in revenue and has done little to cut costs by reforming Medicaid spending and the state's pension systems.

According to administration estimates, Quinn's budget plan calls for spending $32.1 billion out of the state's general checkbook at a time when only $27.4 billion is expected to flow in. The state would end the fiscal year $11 billion in the hole.

"He's clearly holding education hostage for this tax increase," said House Minority Leader Tom Cross, R-Oswego. "Today is a political ploy to try to scare the General Assembly into voting for a tax increase."

Increasing the state's personal income tax rate from 3 percent to 4 percent, with a similar percentage boost in the corporate rate, would bring in an estimated $2.8 billion. Quinn said that money should be earmarked for education.

Without the increase, schools would see about $1.2 billion less in the fiscal year beginning July 1, a move that could force school districts to either boost local property taxes or lay off as many as 17,000 employees.

Quinn also would cut $600 million in spending on health care and human service programs, reduce spending to state universities by nearly $100 million and cut 700 workers at the Illinois State Police.

Another $200 million would be saved by furloughing state employees and cutting back on travel.

State assistance to the World Trotting Derby, a major horse race held at the Du Quoin State Fairgrounds, would be eliminated, saving about $500,000. The fair itself would not be affected.

But even with the cuts, the cash-strapped state would be left having to borrow about $4.7 billion in the next fiscal year to continue paying vendors who provide state services.

"I am not going to try and sugarcoat the situation," Quinn said. "We are in a crisis of epic proportions."

Borrowing more money doesn't sit well with Republicans.

"To rely in balancing the budget by borrowing is a bad strategy," said Senate Minority Leader Christine Radogno, R-Lemont.

House Speaker Michael Madigan was skeptical a tax hike could be approved in the House.

"I sincerely hope that every member is prepared to cooperate, every member is prepared to do some heavy lifting. I have my doubts," said Madigan, D-Chicago, in a television interview following the speech.

Although Democrats control both the House and Senate, not all Democrats favor a tax hike. Madigan has consistently said he wants Republican votes on a tax hike to help share the political fallout.

Among Democrats opposed to Quinn's plan is state Rep. Bob Flider of Mount Zion.

"I do not embrace a tax increase," said Flider, who is running against Republican Adam Brown of Decatur in the November election.

Even Quinn delved into politics in his speech. He didn't reference his November election opponent by name but said state Sen. Bill Brady's call for across-the-board spending cuts is "draconian."

"That approach is both heartless and naive," Quinn said.

There were other parts of Quinn's proposal that seemed dead on arrival soon after he finished his speech.

Senate President John Cullerton, for example, panned a plan to cut $300 million in state aid to cities.

"That's going to be difficult to pass that bill," said Cullerton, D-Chicago.

Given the lack of support for a tax hike, one scenario circulating in the Capitol has Democrats approving a bare-bones budget that carries the state through the November elections, after which they would push through a tax hike to help pull the state out of its fiscal quagmire.

"It's entirely possible," Cross said.

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