Progress Illinois

State legislators headed back to Springfield today to begin the second and final week of the fall veto session. Here's a quick rundown of the issues they are taking up:

Borrowing

In case you hadn't heard, Illinois' tax base might as well be quicksand. According to the Commission on Government Forecasting and Accountability's latest quarterly report, personal income taxes fell 18 percent, corporate income taxes dropped 29 percent, and sales taxes revenues shrunk by 15 percent since July. At the same time, the legislature has passed legislation requiring that the state fund the Monetary Award Program (which provides scholarships to low-income college students) without identifying a revenue source. As a result, Gov. Pat Quinn is looking for another lifeline, this time in the form of a $900 million loan. The Tribune has the specifics:

Lawmakers might put the borrowed money into a special pot that would be used to pay state health-care costs, generating potentially another $400 million in matching federal funds. That also would free up money elsewhere to pay for the scholarships in Illinois’ Monetary Award Program.

Borrowing is normal when revenues are smaller than expected. But Illinois has already taken out $2.25 billion in loans ($1 billion in May and $1.25 billion in August) and also delayed payment on $3.7 billion in backlogged bills to "shore up" its budget. That money, as well as this new short-term borrowing scheme, needs to be repaid by June 30, 2010. In other words, the plan just digs a deeper hole.

Interestingly enough, the plan does not require legislative approval, only the state treasurer and comptroller's signatures. Dan Hynes -- who during his own gubernatorial campaign has been critical of Quinn's handling of the budget -- could very well block the request. Although playing politics with scholarship money for needy students and Medicaid payments is a risky proposition. Quinn does not expect any problems.

Campaign Finance

The largest looming item on the legislative calendar is SB 1466, a rewrite of the campaign finance bill vetoed by Gov. Quinn in late August. After making measured progress last week, legislative leaders, rank-and-file lawmakers, and reform advocates still haven't reached an agreement on the crux of the issue: capping campaign contributions from state party and legislative leader political action committees (PAC).

One potential compromise emerged late last week:  limiting contributions from these PACs during the primary season (to $100,000 for House races and $200,000 for Senate and statewide races) while lifting the restriction during the general election. Those are pretty high limits. The average 2008 race (both primary and general) cost House candidates just $191,370 and Senate candidates $349,413, meaning the legislative leaders would still play an extremely influential role in determining who emerges from primary fields. But if reformers are ready to swallow any potential improvement so that the substantive reforms housed in SB 1466 can be implemented quickly, this could be their best option.

Gov. Quinn, who vetoed the former campaign finance bill he deemed "historic" just three months prior, has remained mum on the issue thus far. Reformers and the press, including the Sun-Times Carol Marin, are continuing to hammer the Democratic leadership for their position on the legislative limits. If a deal can't be reached, it might stall until January, when a simple majority (rather than the three-fifths, super-majority required during the veto session) could pass it. And since the provisions would not be implemented before the 2012 election, the delay would not have a serious effect this cycle. We will know what route they take by Friday.

CTA

Facing an estimated $300 million deficit and the specter of service cuts and fare hikes, officials from the Chicago Transit Authority (CTA) are bypassing City Hall and asking state lawmakers to bail them out.

Specifically, the CTA wants the General Assembly to approve measures that would allow the agency to shift more funds (roughly $360 million over two years) from capital maintenance to operations and pare down the free-rides-for-seniors program. Senate President John Cullerton says his chamber will this week take up a measure (that he has endorsed) to limit the free trips only to seniors earning less than $22,200 annually. It's a reasonable proposal, but will only save between $30 million and $37 million annually, some of which would have to be diverted to Metra and Pace.

As it stands, no major changes to the CTA's funding structure or revenue stream are even on the table. Until serious changes are implemented, these types of deficits will continue to be an annual problem.