CHICAGO (Reuters) – Illinois Governor Bruce Rauner on Monday referred to as on state lawmakers to cross a full-year fiscal 2019 funds that adheres to a income estimate and never a partial spending plan meant solely to get the state previous the November election.
The Republican governor, who’s working for a second time period against Democrat J.B. Pritzker, additionally urged lawmakers to ship him a invoice geared toward saving Illinois as a lot as $1 billion in pension prices yearly earlier than the spring legislative session ends on May 31.
Rauner’s request adopted an identical warning on Sunday from Illinois’ Republican House chief. State Representative Jim Durkin mentioned in a radio interview it could be “dangerous” to cross solely a partial funds, which might put funding for social companies, public colleges and different components of the state authorities in peril.
But Steve Brown, spokesman for Democratic House Speaker Michael Madigan, mentioned on Monday the Republicans “are the only ones talking about a six-month budget.” Democratic Senate President John Cullerton needs stability and a full-year funds, based on his spokesman John Patterson.
Illinois’ $130 billion unfunded pension legal responsibility and the truth that an deadlock between Rauner and Democrats left the state with out full budgets for an unprecedented two-straight fiscal years have pushed the state’s credit score scores to only a notch or two above the junk stage.
The enactment of a fiscal 2018 funds and $5 billion revenue tax price hike over Rauner’s vetoes in July saved the already lowest-rated U.S. state from sliding into junk.
Illinois’ political issues had been cited by all three credit standing businesses in current reviews that mentioned any worsening of the state’s continual unpaid invoice backlog, which hit a report $16.67 billion final yr in consequence of the funds deadlock, might result in a downgrade.
“A re-emergence of political stalemate that negatively affects fiscal operations, including a material increase in accounts payable, could trigger a downgrade,” Fitch Ratings mentioned on Monday.
Rating businesses have additionally questioned the feasibility of components of the $37.6 billion basic funds funds Rauner proposed in February.
Rauner, in the meantime, needs $1 billion in pension financial savings to scale back final yr’s revenue tax hike. A invoice, which handed the Senate final May and has languished within the House thus far this yr, would give state employees and lecturers employed earlier than 2011 a selection of counting future raises they could obtain towards their pensions or receiving retirement funds that embody a three % annual cost-of-living improve.
Reporting by Karen Pierog; Editing by Matthew Lewis