Report: Rauner Budget $3.5 Billion Out of Balance

A Civic Federation report found an operating deficit of $3.5 billion in the governor's proposed FY 2017 budget

A Civic Federation report released Tuesday found that Gov. Bruce Rauner’s recently proposed Fiscal Year 2017 budget has an operating deficit of $3.5 billion.

The Civic Federation, a non-partisan research organization that focuses on Illinois governments, said it opposed the governor's budget saying it presented an "insufficiently detailed plan for closing the gap."

“The $3.5 billion figure appears to be understated because it does not fully account for the actual cost of essential state services and is based on projected saving that are unlikely to be realized," the report reads.

Rauner proposed his FY 2017 budget in February. The proposal was dubbed the Unbalanced Budget Response Act. Rauner previously vetoed FY 2016 budget proposals for being unbalanced.

Illinois has been without a budget since July of last year. The impasse has largely hinged on a battle between Rauner and Democratic lawmakers over the governor’s pro-business, union-weakening Turnaround Agenda.

"Governor Rauner inherited years of fiscal mismanagement and has proposed the clear path to turnaround the state," Rauner spokeswoman Catherine Kelly said in a statement. "The preferred option is to work together with members of the General Assembly to pass structural reforms and a balanced budget ensuring priorities are funded."

Last week, the governor said he was hopeful that a “grand compromise” for a 2016 and 2017 state budget could be reached before the legislature adjourns in June. If not, he said his staff was looking into the possibility of him picking up the tab for additional special sessions.

The Civic Federation report also highlights concerns about the state’s pressing unpaid bill backlog.

“The Federation cannot support a financial plan that allows the State’s backlog of unpaid bills to stand at $9.3 billion at the end of FY2017 if the operating deficit is eliminated and rise to $12.8 billion id the gap is not closed,” the report reads. “Because of the backlog, the State begins each fiscal year in a hole, using revenues from the current year to pay off the previous year’s obligations.”

The group is also unsupportive of Rauner’s plan to reduce General Funds pension contributions by nearly $750 million for FY2017 by deferring payments to later years.

Additionally, the Civic Federation is opposed to a projected reduction of $445 million in group insurance payments.

“The savings depend on the outcome of labor negotiations or the removal of health insurance from collective bargaining,” the report reads. “The projection follows a long history of underfunding health insurance contributions, which has fueled growth in the backlog of claims.”

The group also voiced concern over a plan to save nearly $198 million on the Community Care Program, which works to keep the elderly out of nursing homes, by creating a new program for seniors who do not qualify for medicaid. That plan’s details have yet to be made public.

The report also notes that Rauner’s proposal relies on $475 million in one-time revenues, including the entire balance of the Budget Stabilization Fund and the sale of Chicago’s James R. Thompson. In response, the group opposes the depletion of Illinois’ rainy day fund and the use of money from an asset sale to fund operating costs.

The Civic Federation report calls for a “comprehensive plan including increased revenues and spending restraints.”

"Although Illinois' financial condition has been precarious for years, the current situation represents a new low in fiscal management by the General Assembly and the governor," the report reads.

The Illinois General Assembly reconvened Tuesday after a week-long break. According to Politico, two bipartisan groups are currently working on separate budget proposals, one of which accounts for the remainder of FY 2016 and FY 2017.

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