Illinois House passes bills to plug state budget gap

CHICAGO (Reuters) – The Illinois House of Representatives on Tuesday approved a bill that would plug a $1.6 billion hole in the state’s budget by cutting spending on most programs by 2.25 percent and tapping money from other funds.

The House voted 69-48 on the measure and 73-45 on a related bill to appropriate funding for some key services that are running out of money. The bills now move to the state Senate, where Senate President John Cullerton will meet with his Democratic caucus to gauge support, said Rikeesha Phelon, his spokeswoman.

Cullerton said last month that the questionable $6.6 billion in spending cuts and savings that new Republican Governor Bruce Rauner put in his $32 billion fiscal 2016 budget proposal on Feb. 18 made reaching an agreement on the fiscal 2015 budget fix more difficult.

Earlier on Tuesday, top aides to Rauner testified before the House Executive Committee in favor of the Democrat-sponsored legislation to fix the current budget.

“Governor Rauner didn’t create this fiscal mess, but he is willing to work across party lines to fix it,” Richard Goldberg, the governor’s deputy chief of staff for legislative affairs, told the committee.

He noted that the legislation offered by Democratic House Speaker Michael Madigan does not rely on higher taxes or borrowing.

More than 80 percent of the state’s budget hole would be filled through the fund transfers, according to Democratic House Majority Leader Barbara Flynn Currie, a sponsor of the legislation. She told the House committee that the plan provides funding for services that were running out of money well before the fiscal year ends on June 30, including for prison guards, court reporters and child care.

“This way, I think we can get through the remainder of the fiscal year,” Currie said.

She added that the legislation would give Rauner the ability to transfer some funds between agencies, along with a $97 million lump-sum appropriation to help school districts unable to handle the 2.25 percent funding cut and another $90 million to plug unanticipated budget holes.

Illinois’ credit ratings at the bottom of the A-scale are the lowest among the 50 states and have negative outlooks tipping toward triple-B – a low investment-grade rating level rarely assigned to U.S. states.

A structural budget deficit, a $105 billion unfunded pension liability and revenue loss from the partial rollback of temporary income tax rates are key factors.

(Reporting by Karen Pierog; Editing by Paul Simao)