Fixing The Budget Crisis

Budget news continues to dominate in Springfield. A Senate appropriations committee held hearings over two days investigating how deep services would have to be slashed if the General Assembly enacted a 10 percent across-the-board cut. University officials testified that more cuts would be devastating, leading to what University of Illinois President Stanley Ikenberry (pic 1) called "broken futures." The news wasn't any better at the elementary and secondary levels; state schools Supt. Christopher Koch warned that 13,000 school employees are already slated for layoffs as a result of the stimulus bill's expiration.

Next Wednesday, Gov. Pat Quinn will deliver his FY 2011 budget address. He's already outlined his administration's preliminary budget figures, which the child-advocacy group Voices for Illinois Children predicts will further hamstring schools and social services if no additional revenue is raised.

In the meantime, thousands of Illinois residents submitted comments on the State of Illinois website offering their suggestions for how the General Assembly can chip away at the deficit. So did Moody's, which all but endorsed a longstanding Democratic proposal to extend the state sales taxes to various services. We tossed in an idea of our own: The governor's office should investigate how the wealthiest individuals in Illinois are shielding huge amounts of income from the state.

We also critiqued the Tribune editorial board for releasing a flawed no-tax increase budget proposal (which they claim is a "conversation starter") and the Illinois Policy Institute (pic 6) for questioning the economic rationale behind tax reform.

Lawmakers in Springfield are taking some piece-meal steps to free up cash flow but politics are getting in the way of substantial solutions. Like his counterpart in the House, Senate President John Cullerton (D-Chicago) said Saturday any income tax increase must pass with bipartisan support. House Republicans aren't giving an inch. That's probably why the Democratic leadership is preparing a questionable "six-month budget" that would allow the Democrats to get through Election Day without putting any votes on an income tax hike.

Politics ...

Republicans finally have a gubernatorial candidate. This afternoon, State Sen. Kirk Dillard (R-Hinsdale) officially conceded in the GOP gubernatorial primary and endorsed his party's nominee, State Sen. Bill Brady (R-Bloomington). Following the news, Gov. Pat Quinn released a statement in which he called Brady a member of the "extreme right wing of the party." This comes after Brady botched a press conference yesterday criticizing Quinn for his administration's early release policies.

In the U.S. Senate race, Alexi Giannoulis tried to put to rest questions surrounding his family's struggling bank (pic 4), telling multiple media sources that he expects the institution to fail in the near future. His Republican campaign rival Mark Kirk went on the attack immediately, claiming that an FDIC takeover of Broadway Bank would "leave taxpayers ... paying for Alexi [Giannoulias'] reckless loans." (It wouldn't.) Kirk also voted against a $15 billion House jobs package and flip-flopped on his high-speed rail stance.

Also In Springfield ...

How to fix Illinois' fiscal problems isn't the only issue that state lawmakers are wrangling with. A big fight is brewing over potential changes to the redistricting process, which we covered in a primer. Housing advocates are celebrating a victory from last year and pushing several new initiatives regarding foreclosure prevention and affordable housing. State Rep. LaShawn Ford (D-Chicago) (pic 8) has authored a bill that would make it easier for farmers' markets to accept food stamp benefits. And Democrats introduced an innovative voting rights measure that Republicans quickly criticized.

Republicans in the minority are trying pushing their own initiatives, which include pension and Medicaid "reforms." We called out Republican State Sen. Matt Murphy (R-Palatine) (pic 3) for reviving his claim that Medicaid spending is a huge drag on our state finances and Rod Blagojevich is to blame for that. We also investigated the differences between the state's five underfunded pension funds and the Illinois Municipal Retirement Fund, which is in such strong financial shape. (Hint: it has little to do with the size of benefits.)

Lastly, we lamented that partisan politics are preventing lawmakers from reinstating recently rescinded insurance reforms that state regulators cite as the primary reason malpractice premiums for doctors and hospitals are declining in Illinois.

In Washington ...

The nation's unemployed received a scare this week, courtesy of Senate Republicans. As a way to stall action on hundreds of additional bills favored by Democrats, Sen. Jim Bunning (R-KY) used a procedural maneuver to block a vote on legislation to temporarily extend the deadline for unemployment benefits. In doing so, he endangered the income of 15,000 unemployed Illinoisans whose benefits were set to expire this week. On Tuesday, Bunning relented and Congress approved the stop-gap bill, which means there will be no interruption in issuing insurance checks this month. But Illinois' own Sen. Dick Durbin (pic 7) gave Republicans a piece of his mind on Sunday, reminding his colleagues they many families are facing "an economic emergency."

Senate Democrats are now turning their attention to a larger employment bill that would extend the unemployment benefit deadline through the end of 2010. In Chicago on Wednesday, anti-hunger and labor advocates staged a "Senate Soup Kitchen" (pic 5) to remind lawmakers just how intensely people are struggling here in the Midwest. We shot some video from the event.

The final push for health care reform is also well underway. Last weekend, Sen. Durbin reaffirmed his belief that Democrats will pass a health care reform "within weeks." First, congressional leaders have to forge a compromise with pro-life Democrats, including Reps. Dan Lipinski and Jerry Costello, whose absurd criticisms of the Senate bill may torpedo the entire package. While they dither, some health insurance companies are jacking up premium rates.

Locally ...

Last week, we reported on a bill advancing in Springfield that would make it much, much harder for independent, progressive candidates to challenge incumbent Chicago aldermen in next year's municipal election. This week, we asked whether the city's reform-minded politicians and activists will push back.

Pushing back is just what some Chicago high school students (pic 2) are doing to protect their schools. On Thursday, a group of youngsters protested pending state budget cuts outside City Hall and asked if Mayor Daley is doing all he can to find local resources to blunt the impact.

Speaking of Daley, Evan Osnos made a big splash this week with a lengthy profile of the mayor in The New Yorker. We pulled two interesting anecdotes.