Today, lawmakers returned to the Statehouse in Springfield in another attempt to solve the state's awful budget crisis. For months, the General Assembly has been staring down a deep budget hole, but they've failed -- again and again -- to reach consensus on how to fill it. If you're just getting caught up with the story, here's a primer on where the negotiations stand and how we got here.

Quinn Rolls Out His Plan

The budget battle began in earnest on March 18, when Gov. Pat Quinn officially unveiled his proposal to members of the General Assembly in Springfield. Quinn made clear from the get-go that he intended to address the structural problems underlying the state's massive budget deficit, particularly Illinois' unfair tax system. By raising the income tax from 3 to 4.5 percent, tripling the personal exemption from $2,000 to $6,000, and making $1.3 billion in other budget cuts and other savings, he argued his plan would close the deficit and shield working people from the financial strain of a tax increase. In papers the following day, editorial boards across the state praised his honesty and courage, two virtues absent in his predecessor.

The Problem With "Shared Sacrifice"

But by crafting a compromise budget, Quinn found himself without any political support from those constituencies that can actually move an agenda forward in Springfield. His plan to reduce pension benefits for incoming state workers, increase employees’ pension contributions and health care payments, and require state employees to take four unpaid furlough days frustrated public employee unions. Social service providers also criticized the proposed cuts to their critical programs.

On the flipside, the business community lambasted the governor's proposed increases in the corporate income tax, his hiking of the cigarette tax, and his plan to cut the retailer sales tax allowance by half. Progressive tax reformers thought that his decision to raise the dependent and personal exemptions went way too high up the income ladder; they instead argued in favor of more targeted tax relief. 

Meanwhile, both House Speaker Michael Madigan and Senate President John Cullerton offered only lukewarm support for the plan, suggesting that additional cuts needed to be made before asking taxpayers to pitch in more of their earnings.

In the weeks following the roll-out, Quinn hit back by pointing out that few had come up with their own alternatives. Unfortunately, the governor did not take advantage of his spot in the limelight, never making a clear case for the virtues of his own plan. Although taxpayers were asked to share a greater burden, all Quinn could tell them was their their money would pay the bills left by Rod Blagojevich and save the jobs of state workers.

Not that compelling a message for folks facing the worst recession in decades.

A Last-Minute Scramble For Alternatives

In the final days of the General Assembly's spring session, two major alternative plans finally emerged, both of which included an income tax hike to balance the state's budget.

The first, authored by Sen. James Meeks and housed in House Bill 174, sought to generate an estimated $5.2 billion in revenue by increasing both the personal and corporate income tax to 5 percent and expanding the sales tax to certain consumer services. It would also provides tax relief by raising the personal exemption from $2,000 to $3,000, doubling the state property tax credit, and tripling the Earned Income Tax Credit (EITC), which targets low-income families.

On May 20, HB 174 passed the Senate Education Committee. Then on May 30, a day before the session ended, the full chamber approved it by a four-vote margin.

House Speaker Michael Madigan had different ideas, however. Convinced, apparently, that a 67 percent income tax hike would endanger members of his majority at the ballot box next year, he pushed a modified version of Gov. Quinn's initial tax hike proposal. This measure temporarily raised the income tax rate from 3 percent to 4.5 percent while permanently doubling the EITC. But beyond saying that he himself would vote for it, Madigan made little effort to whip up support for the bill, knowing full well that no GOP members were willing to make the measure "bipartisan."  As a result, the temporary plan went down in flames by a vote of 42-74-2 on May 31. The Meeks plan passed the House Education Committee that same day, but never came up for a full vote in the House.

The "50 Percent" Budget Emerges

In the waning hours of the session, the General Assembly approved five bills designed to keep basic state services operating. But because provisions in the federal stimulus package effectively prohibited the state from cutting either Medicaid or big educational programs, the portion of the budget funding human service grants bore the brunt of the cuts. The "balanced budget" sent to the governor's desk, in other words, funded social service agencies at only half the level requested by Quinn. And because the legislature did not finalize the details before the May 31 deadline, any new spending plan would require a three-fifths majority (as spelled out in the state's Constitution).

The need for higher threshold theoretically represented a boon for Madigan, who all along wanted some Republican votes on any income tax hike.

Chaos And Confusion

Throughout June, Gov. Quinn met with the legislative leaders to discuss their options and to lobby for a tax increase.

Republicans, having gained considerable leverage, remained categorically opposed to Quinn's tax hike unless more cuts and structural reforms were made first. A report from the Taxpayer Action Board released in mid-June provided GOP leaders with some ammunition. Although experts agreed there were only $200 million in achievable FY 2010 savings, the report pointed out some inefficiencies in state government and gave Republicans -- so far unable to make a convincing case that lawmakers can cut their way out the deficit -- temporary cover.

At the same time, Meeks urged his colleagues to "pass something we can be proud of," and Senate President John Cullerton continued to stump for HB 174 -- the plan approved by his chamber in May -- emphasizing that a tax hike would ultimately be the "only way out."

In an effort to turn up the heat, social services providers and their advocates hit the streets and airwaves to raise concerns about the bare-bones budget. Large protests took place almost daily in downtown Springfield and Chicago, with some groups targeting specific lawmakers.

Questions were also raised about the legality of the operating budget passed at the end of spring session. For one, cutting state dollars for programs that are covered jointly by Illinois and the U.S. government meant the state could forfeit a considerable amount of federal matching funds. Shredding program budgets so quickly also left the state open to a deluge of lawsuits due to the fact that court orders and consent decrees protect people reliant on state services from losing their access abruptly.

Indeed, at the end of June, a federal judge suggested that funding for the Department of Children and Family Services (DCFS) could not be slashed. Cook County Public Defender Robert Harris also filed an emergency motion in Cook County Circuit Court to prevent mental health services for children held in custody of the state.

Back To Springfield

As July 1 approached (representing the start of the new fiscal year), lawmakers returned to Springfield multiple times, where they were met by more protesters demanding a fair budget. On June 24, 5,000 demonstrators -- many of them human service providers -- filled the Capitol rotunda. Six days later, several SEIU members were led out of the statehouse by security after they blocked the doors of the House chamber.

But many Democratic lawmakers stood firmly behind their political calculations (rather than, say, their convictions). On June 29, House members made two significant legislative moves, approving a short-term borrowing scheme to pay the state’s pension contribution (thereby freeing up an extra $2 billion for the FY 2010 budget) and formally sending the $29 billion capital construction program to Gov. Quinn. The following day, however, the Senate failed to approve the pension scheme.  Reports indicated that the governor had apparently lobbied lawmakers at the last minute to vote against the plan, which he had earlier endorsed.

Quinn's apparent shenanigans infuriated Cullerton and no tax vote was ultimately held. Instead, the legislature sent Quinn a package of bills that only partially fund his proposed spending plans for community-based services in the next fiscal year.

Quinn Wields His Veto Pen ... Twice

This didn't please the governor in the slightest.  Before a hastily-called joint session on June 30, Quinn warned that he would veto any unbalanced budget sent to his desk, saying he was "prepared to stay here all summer ... to come up with a budget solution that works for the people of Illinois."

Quinn followed though on July 1, formally vetoing the portion of the appropriation bill (SB 1197) dealing with human services. Then, during a bewildering press conference in Chicago on July 7, the governor issued a full veto of HB 2145, another one of the bills passed by the General Assembly before leaving Springfield in May. According to Quinn, that section overfunded operating services.

Quinn's argument was that the budget was flawed from "beginning to end" and required a total overhaul by the legislature to reflect necessary spending cuts across state government. To wit, he offered lawmakers $1 billion in recommended reductions, outlined in his June 30 joint session but re-released in the form of a "Tough Choices" budget.

Quinn emphasized throughout his press conference last week that vetoing the appropriations bill was "the only thing [a governor] can do to an unbalanced budget." That's not exactly true. Quinn could have made the exact same cuts he recommended using the line-item veto or his item reduction power. But by repeatedly asking the General Assembly to "share in the sacrifice" and build the cuts into a new operating bill, Quinn attempted to shield himself from the politically unpopular task.

But in vetoing HB 2145 without any prior warning, he managed to further alienate the Democratic leaders. Cullerton, who met with Quinn hours before the press conference, said the possibility of a veto was not discussed. "If we just had to deal with the budget gap in these meetings, that would be one thing," said Cullerton spokesperson Rikeesha Phelon. "Now we have to maneuver around his credibility gap."

House Speaker Michael Madigan's spokesperson Steve Brown agreed, telling WBEZ that "it appears that he's bent on causing some chaos."

By calling for 2,600 layoffs, Quinn also necessitated negotiations with the public employee unions. And they are not pleased with the way the situation has been handled. “The governor entirely avoided discussing the human costs of the proposed cuts,” AFSCME spokesman Anders Lindall told the St. Louis Post-Dispatch. “I heard no acknowledgment from Pat Quinn that 1,000 layoffs in the Department of Corrections will make prisons less safe.”

What's worse, the cuts Quinn requested still would not close the budget entirely. For that, the legislature would need to approve an income tax hike, further cuts, or additional borrowing.

Thirteen days after the start of the new fiscal year, Illinois still had no a spending plan in place. And the political stalemate has left social service providers in the dark about how much state funding they will receive over the next 12 months.  As a result, many of these organizations have begun laying off staff and scaling back their programs, leaving recovering addicts, domestic violence survivors, the developmentally disabled, and other vulnerable citizens in the lurch.

Where Do We Go From Here? -- Four Possible Options

On Thursday June 9, Quinn indicated that he could be open to a partial-year operating budget as a “Plan B,” meaning lawmakers would delay a vote on a potential tax hike until January (when they would once again need only a simple majority to pass it).  But "Plan A" for lawmakers may entail overriding Quinn's veto of the underfunded social service bill and the overfunded operating budget, as Sen. Meeks noted last week.

Talking to the State Journal-Register on July 13, State Sen. John Sullivan (D-Rushville) neatly broke down the four scenarios facing lawmakers as they return to Springfield:

Sullivan said lawmakers could approve a temporary budget to keep the state operating until November, when Quinn said he wants to take another stab at raising taxes. Or, Sullivan said, lawmakers could draft a new budget plan that carries the state through 12 months.

The General Assembly could do nothing, he said, and allow government operations to grind to a halt, or it could vote to override Quinn’s veto of the budget that lawmakers approved previously.

“I don’t know if the votes are there to do that,” Sullivan said. “I’m convinced we’d have to have significant Republican support to do that.”

We'll find out soon in which direction lawmakers are headed.

Image used under a Creative Commons license by Flickr user Sean_Marshall.