Illinois Overcomes Budget Stalemate

Last Thursday, the state of Illinois passed its budget. Why is this a newsworthy event? Because Illinois hasn’t passed a budget in two years: the longest such stalemate in U.S. history. This week, Election Central takes a look at what happened, what was at stake, and how Illinois’ budget crisis was finally resolved.

What Happened?

Illinois’ governor, Bruce Rauner, is a Republican in a traditionally Democratic state who has fought against the Democratic state legislature since taking office in 2014. Governor Rauner has opposed the budget for the past two years because he was against a tax increase unless it also included other items on his agenda, such as freezing property taxes, restricting labor unions, and cutting workers’ compensation. When the budget didn’t include these provisions, which Democratic legislators opposed, Rauner vetoed the budget. While the governor’s supporters applauded him for sticking to his position, his opponents argued that this illustrates Rauner’s inability and unwillingness to compromise, even as his constituents suffered. At the moment, Rauner is considered to be one of the least popular governors in the nation.

What Was at Stake?

The fact that Illinois had not passed a budget in two years launched the entire state into a financial crisis. Over the past two years, Illinois has fallen $15 billion behind on its bills, giving it potentially the worst credit rating of any state.

Meanwhile, many of Illinois’ municipalities have been badly damaged by the state’s poor financial situation. Local businesses have suffered, and public universities have lost both students and faculty to institutions in other states. The lack of funding has especially affected nonprofits and organizations that provide social services to the poor, elderly, and others in need, which rely on government dollars in order to survive. And there is no longer any money to repair failing infrastructure, such as roads and bridges. Last year, roughly 37,000 Illinois residents moved away, which is more than in any other state.

How Was the Issue Resolved?

Governor Rauner vetoed this year’s budget as well. However, this time, Democrats and at least ten Republicans in the Illinois legislature joined together to achieve exactly the 71 votes necessary to override the governor’s veto.

The approved budget will raise personal income tax from 3.75 percent to 4.95 percent. It will also raise the corporate income tax rate from 5.25 percent to 7 percent. Overall, these tax increases will generate about $5 billion in revenue for the state–which, considering how deeply in debt Illinois is, still may not be enough.

Dig Deeper Based on what you read in this article, how much more in taxes will a family in Illinois have to pay under the newly approved budget if the family makes $50,000 per year? What about $100,000 per year? Knowing this, if you were a legislator in Illinois, would you have voted to approve the new budget? Why or why not?