$12.3 billion general funds appropriation: an end to fiscal restraint

Rep. Ted E. Leverenz

The spring session of the Illinois General Assembly stood in marked contrast to the 1988 session. Lawmakers abandoned the fiscal restraint that they had shown in 1988, adding $400 million in general funds spending to the budget originally proposed by Gov. James R. Thompson. But lawmakers maintained another tradition, that of rewriting the executive budget, to add money to programs that they decided were important.

Helping to end the fiscal restraint was House Speaker Michael J. Madigan's (D-30, Chicago) proposal and passage in mid-May of an income tax increase. But without the income tax, and the gasoline and cigarette tax hikes that it spawned, lawmakers could have indulged themselves with an $800 million increase in spending. That luxury came in part from holding the line in the year that ended June 30, 1989, and adopting a budget in June 1988 that held spending $295 million below revenues.

The previous restraint led to soaring cash balances in late June and what one legislative analyst called "an embarassment of riches." Rep. Ted E. Leverenz (D-51, Maywood), chairman of the Appropriations I Committee, said the administration spent the closing days of fiscal 1989 on a massive cash-dumping spree to hold down the ending cash balance. "I'm surprised we didn't prepay the first month of the fiscal year," Leverenz quips.

The process of deciding who could spend how much for which programs and projects had a new twist this spring since the Senate had no committees during its six-week stalemate, Leverenz says. The Senate stalemate left it to the House appropriation committees to deal with appropriations. Leverenz says that the delay caused no 11th hour problems and that the final conferences on spending were more orderly than in the past. "We also found out that there were three weeks we didn't have to be in Springfield," Leverenz says.

Comparisons to previous years appropriation totals are complicated by the new Education Assistance Fund into which half of the new income tax money is paid. The comptroller has decreed that, because the money is to be spent on lower and higher education, it will join the General Revenue Fund and the Common School Fund as general funds. If the new education spending is considered to be in the general funds, then lawmakers boosted appropriations by $758 million over what Thompson had sought in March.

Big winners in the general funds spending process and the increases they got above what Thompson had originally proposed were:

• The Department of Public Aid, up $237.8 million, the money going for a mid-year 7.5 percent increase in welfare grants and for higher reimbursement rates for doctors, hospitals and nursing homes that serve the poor.
• Elementary and secondary education, up $279.6 million, the money divided between general state aid and specific programs for special education, disadvantaged preschool, bilingual education and the gifted.
• Higher education, up $159 million, the money divided between public universities, community colleges and financial assistance for students.
• The Department of Transportation, up $50 million, reflecting the higher cost of administering expanded road and mass transit programs.
• The Department of Commerce and Community Affairs, up to $39 million, most of it as the state's $24 million share of an expanded program to provide winter heat subsidies for the poor.

Rep. Leverenz maintains that there was little or no "pork" in the new general funds spending. "To the best of my knowledge we increased programmatic type things," Leverenz says. But like most legislators Leverenz is not opposed to pirk, per se. He uses the example of sewer repairs. That looks like pork to a budget analyst, but to the homeowner who has raw sewage in his basement every time it rains, the work is a necessity.

Leverenz says that the General Assembly continued this spring to expand its role in deciding where money is spent. The ultimate example of that, he says, is the Madigan tax plan which he sees as accomplishing three specific goals. First, lawmakers gave schools and local governments needed money. Second, they state government operations would get none of the new money. And third, each dollar that went to schools and municipalities was a dollar that did not have to be raised by property taxes.

But lawmakers also made major rewrites of the Thompson budget itself. The governor, with $816 million in effective new spending without a tax increase, had proposed no grant increase for those on welfare. Lawmakers found $36 million for a 7.5 percent grant increase effective January 1. And lawmakers found $55 million for a program to provide extra money to hospitals that serve the poor.

When lawmakers went home, Gov.Thompson got his final crack at the budget with his veto pen. He slashed $45.3 million from the appropriations approved by the General Assembly: about $28 million from human services and another $12 million from education. His cuts included $5 million in general funds money put in the pot to establish a low-income housing trust fund and $5.5 million for salary increases to workers in community-based mental health agencies.

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In making his cuts, Thompson continued to aggitate for the additional 8 cents in cigarette tax that lawmakers denied him when they approved a 10-cent per pack increase instead of Thompson's proposed 18-cent hike: "If the General Assembly approves additional 8-cent cigarette tax later this year, it would be possible to reinstate the appropriations vetoed." Almost no one considers a second cigarette tax hike a possibility. While still pushing for the higher tax increase, Thompson praised lawmakers for providing more money for schools.

As a result of all that new appropriation authority, state government will spend a lot more money this year. The governor's Bureau of the Budget projects spending in the current fiscal year to reach $13.2 billion, an increase of $1.4 billion general funds spending compared to 1989, or 11.5 percent.

But the really big increases came outside the general funds. Lawmakers authorized more than $3 billion in new borrowing, spending that will build highways, bridges and civic centers across the state.

Increases in Capital Development Board appropriations approved by lawmakers include:

• $3.2 million for Illinois Beach State Park Marina.
• $2.5 million for DuQuoin Work Camp dormitory.
• $18.3 million for a new building at Elgin Mental Health Center.
• $6.3 million for classroom additions at John A. Logan Community College in Carterville.
• $5 million for grants to local governments to buy property in floodplains.
• $97 million for three new prisons.
• $15.5 million for community correction centers.
• $350,000 for an outdoor recreation center in Herrin.
• $1.75 million for phase-three repairs to the Dana-Thomas House in Springfield.

New Build Illinois appropriations approved by lawmakers included:

• $150 million for Navy Pier.
• $5 million for the Lincoln Park Zoo.
• $10 million for the Brookfield Zoo.
• $158.6 million for grants to communities to build sewage treatment plants.
• $126 million to complete work on making U.S. 51 a four-lane road.
• $28.2 million for work on extending Thorndale Avenue in Chicago to relieve congestion around O'Hare Airport.

Leverenz acknowledges there may have been some excesses in bond-funded programs. "Bond programs are now the new source of pork projects," he says. And he believes that lawmakers will have to begin keeping a closer tab on bonded debt. "We may bond ourselves into oblivion," he warns.

When lawmakers construct and approve appropriations they are deciding how money should be spent. For two years they had done so with little or no new money to spend. This year they had an easier task. There was a lot more money and they spent a lot more. And lawmakers continued to impose their own spending priorities upon the $12.3 billion budget.□

August & September 1989 | Illinois Issues | 47