(dramatic instrumental music) - Welcome to a special edition of "Illinois Lawmakers."

I'm Jak Tichenor, along with Rich Miller of capitalfacts.com.

Good to have you on the program, Rich.

- Thanks for having me, Jak.

- Governor J.B. Pritzker is proposing a $49.6 billion budget for the fiscal year that starts on July 1st.

He's pledging major increases for early childhood education, childcare, and the human services.

Democrats overall, have embraced the Governor's budget priorities, They say it's affordable, Republicans say, "Nah, it's not affordable."

And their warning of a fiscal cliff, particularly if there's a national recession down the line.

Is that a pretty good assessment of where things stand?

- Yeah, on the partisan scale, yeah.

But you have to remember that the budget is built on revenue forecasts that factor in a recession.

So, for instance, they're figurin that sales taxes will only rise by, I think $20 million was the number, it's a very small amount.

That corporate income taxes will fall by over 3%, and that individual income taxes will rise by right about 3%.

So, I think some of that is disingenuous but we've had a couple of years, few years now, of excess revenue coming in, or unexpected revenue coming in, and they haven't spent most of it.

They've spent some of it, but the vast majority has been used just for one time things.

The current fiscal year that we're in it's somewhere close to $4 billion in just one time expenditures, because they thought that this money wasn't going to last, some of it is going to last though.

- How much of an increase in base spending is in this budget?

- It goes up about 8%, it's 2.7 billion, $2.75 billion, I think, and plus another 200 million for pensions, which is fairly modest, overall.

- Democratic Comptroller, Susanna Mendoza, had cautioned in the time leading up to this budget address, and before that, warning lawmakers and policymakers not to make big increases because of the state's budget, because of the precarious nature of the state budget over recent years.

And Republicans pointed to that cautionary message.

She kind of changed her tune a little bit yesterday.

- Kinda?

Yeah.

I think part of the reason is, one, a lot of these programs, these state programs, haven't had an increase, and there's been inflation in the economy for well over a year.

And because they haven't had an increase, this tries to catch them up.

There are some new programs, but I think she read the room, I think she read the room really well last year when she said, absolutely no spending money on the base budget, just leave it the way it is and just use this stuff to pay down debt, which is exactly what they were planning to do anyway, and what ended up happening.

But I think she got ahead of herself a little bit, ahead of the game a little bit, she is a Democrat after all, and so I don't think she wanted to be in the position of opposing, you know, increased spending on early childhood education, or childcare, or, you know, homelessness prevention, or what have you, that's in this budget.

So, there was a recalibration.

- She said the increase in spending was careful, strategic, and necessary.

As we talk, the Democratic leaders basically said they agree with the Governor's budget priorities.

They're gonna start taking a strong look at exactly where the details are on this thing.

In the last minute or so we have, the Governor proposes, the general assembly, you know, disposes, that's an old saying in Springfield.

What are some of the major changes you expect in this spending plan as the advocacy groups, the social services groups, the unions have their say, in where the priorities are?

- Well, I think, you know, there's always spending pressure no matter who the Governor is.

There is a significant spending pressure this year because people have waited so long; the pandemic put a whole lot of things on hold.

I think people were willing to, you know, bite the bullet last year, but they really want some additional funding this year.

I think it's going to be a difficult, but not impossible task, to work out a final deal.

I think they will.

And, you know, revenue forecast can change, right?

They just upped it again for this fiscal year by a billion and a half dollars or so, and that's just from November.

And so, by May, when we see the income tax receipts come in in April we'll have a better idea what the coming year will look like.

- So, stay tuned.

Rich Miller, thanks very much, we appreciate your time.

- Thank you.

- Democratic Senate President Don Harmon of Oak Park joins us.

He's at home in Springfield because, like a lot of folks he's had a run in with Covid.

How are you doing, Mr. President?

- I'm doing fine, Jak, thanks for asking.

I always hope that my appearances on your show will go viral, this is not what I'd had in mind.

(Jak chuckling) - Well, we're glad that you're doing well, and thanks for joining us.

The big news, of course, today, the Governor's rolled out his budget proposal for the spring session, clocking in at something like 49 and a half billion dollars in the General Revenue fund budget for the coming fiscal year.

A lot of money is going for early childhood education, and childcare.

What are your thoughts about what the Governor has proposed today?

- Well, I'm excited to hear the Governor's proposal on early childhood education, it's an issue I've been advocating for for my entire 20 years in the general assembly.

It's probably the smartest money we can spend, every dime we spend on early childhood education comes back to us dressed up as dollar bills, and cost savings, and costs avoided, in the medium to long term.

So, it's a smart use of the revenue we have available today, it's something that's long overdue, and I look forward to working with the Governor to refine and move that initiative forward.

- How does it sync up overall with the goals that the Senate Democratic Caucus has for the spring session of the General Assembly?

- Well, I heard an awful lot that I liked, and I think the Senate Democratic Caucus will feel the same way.

Education has always been the top priority for the Senate Democrats; hat's not only kindergarten through high school and higher education, but your early childhood has long been a linchpin to our thinking.

We've just never had the luxury of being able to make a meaningful investment in it, and we have that opportunity today, and I'm glad the Governor has proposed that we seize it.

Certainly some details to work out, but I'm encouraged, and I expect the Caucus will rally around that.

- There's another $450 million in this budget for new funding for the Department of Healthcare and Human Services, to try and grow the state's workforce in healthcare, that's been hard hit by the Covid epidemic, pandemic over the last couple years.

A lot of people burned out, a lot of people left the profession and we need more back in the pipeline.

- We do.

That's been a real revelation from Covid, how many people have chosen to leave the profession and how many have chosen not to enter it.

As the population ages, we're gonna have to make sure we have a robust and vibrant healthcare network.

And so these are again, the sort of one time or short term investments we can make in bending the curve, and bringing people back into the profession.

- Do you see that this budget is achievable as it's written?

- This budget is proposed as less than last year's proposed budget, which was less than the year before.

We've built in a declining revenue stream, the economists predict a slow down and we aren't assuming a rosy revenue picture.

But at the same time, we need to spend the money that's available on things that matter.

And I think that the proposals as the Governor's laid them out today, offer us a chance to bend some of those cost curves, to spend money today that will save money in the medium and long term.

- One of the continuing pressure points in making the Illinois budget is making the annual pension payments on the state's estimated $140 billion in unfunded pension liabilities.

The Civic Committee of the Commercial Club has floated an idea in recent weeks about passing an income tax surcharge to specifically drive down those numbers.

Is that gonna get any traction in Springfield?

- It's a great question.

It's a curious proposal, and one that has certainly peaked my interest, and I know others.

I think if there's a serious bipartisan effort to rally around something like this again, to get certain costs under control, it's a conversation we can have.

But we need to move beyond the partisan bickering, and I'm hoping with new leadership in the General Assembly, we'll be able to do that.

- Well, speaking of that, there was word just a few days ago that you and the new Senate Republican Leader, John Curran, came to an agreement on naming some Republican co-chairs of important Senate committees.

It's not a new idea but it hasn't been done in some time in Springfield.

- It hasn't, and when Leader Curran inquired as to whether I might resurrect that, I remember back to the days I got started in the Senate we had co-chairs of certain committees, the Judiciary Committee on which I served stood as a real bright light.

So, I viewed it as an opportunity to extend an olive branch, to begin the session on a tone of bipartisanship.

And I'm grateful that we were able to reach that conclusion.

- One question before we go, House and Senate Republicans are asking the state to step in and provide some rate relief for customers of the Ameren Illinois Utility.

Their rates have gone up, sometimes very dramatically, in recent months.

What's the Springfield solution that you see on the horizon?

- Well, that's an issue we've been monitoring for several months, it's a real issue, but it's a complicated issue.

It's not unique Illinois, it's actually a part of a multi-state, regional system.

So we're very open to entertaining ideas and I'm sure we'll have a real conversation about that.

- Senate President Don Harmon, thank you so much for joining us on this edition of "Illinois Lawmakers."

- Thank you much.

- Senate Republican Leader John Curran, of Downers Grove is here to give his thoughts on the Governor's budget proposal for the new fiscal year.

Senator, thanks for joining us.

- Jak, it's very nice to be with you.

- The democratic leaders, so far, are giving the Governor high marks for the budget speech that he just delivered to a joint session of the Illinois General Assembly.

How's the reaction on your side of the island, the Senate?

- You know, Jak, there's some skepticism with this budget would be the initial reaction.

You know, two years ago, the Governor and the Senate, the majority Democrats, put before the voters a proposal to the largest tax increase in the history of the state.

That was rejected by the voters.

Last year, the Governor proposed a spending plan and the democratic majority added $4 billion to it.

This year, the Governor's plan coming forward adopts and builds upon that additional 4 billion in spending.

I can imagine, while they're high fiving, but we have skepticism on our side that that is fiscally supportable going forward.

- In talking with the Senate President and the House Speaker, they're basically saying the Governor's done a remarkable job along with their caucuses in trying to control state spending, and deal with the state's budgetary issues.

And now it's time to invest in some new programs like early childhood education and childcare for Young Illinoisans.

Do Republicans agree with the broad brushstrokes of where they're going to invest the new money?

Or, is this just a non-starter for you?

- Jak, the Governor laid out a list of priorities.

Any budget is a list of priorities, but we have to live within the constraints of what the state can afford.

When the Governor talks about childcare, early childhood education, that absolutely should be a priority of this state.

You know, we look forward to working with the Governor on that, the details are gonna matter, but, you know, in balancing these priorities the concern is, I think everyone agrees we're likely headed towards a recession.

This level of spending, record spending, by the state of Illinois is not gonna be sustainable.

And, you know, if we don't constrain this the democratic majority is gonna spend us into a tax increase going forward.

- Republicans have said that they want to see more transparency in the budget process.

In your view, what would that mean?

What are the facts that you wanna lay on the table as you and the other leaders sit down in the budget making process?

- You know, Jak, I'm new in my role, but my understanding in the past is as a minority party, the Republicans have engaged in the budget process through the appropriations committees, and, you know, reviews of the different departments.

At some point during that process communication is cut off, and then we are just delivered a document with little time to review, and expected to vote on it.

So, it's that lack of transparency on the back end of the budget process has been an issue in the past.

You know, I'm hopeful and optimistic that's not going to be an issue this year going forward, and we are going to have a more transparent collaborative process.

And really, my initial conversations with my democratic counterparts have really focused on that.

- In terms of the actual numbers, the revenue estimates have been really exceeded here in the last year, or so.

And the Governor's people, and the leadership and the democratic side, they seem to be very comfortable with the budgetary assumptions that they're making.

Where are they off in your view?

- You know, Jak, three months ago, the projection on revenue for this upcoming fiscal year was $2.3 billion lower.

That has been increased significantly in the last three months to coincide with the amount of spending they're looking to spend.

It's a concern as we move towards a recession, we don't know if this is going to be a mild recession, we don't know the depth of it.

So, a more fiscally prudent approach is really what we're calling for.

- The Civic Committee of the Commercial Club has some ideas about trying to add some taxes down the line that would pay off the state's unfunded pension liabilities.

Is that something that, in your view, that has some possibilities?

- Jak, you know, we appreciate thoughtful proposals being brought forward, but you know, as I talked about before, as we have a recession likely ahead that is no time to be really talking about tax increases at Illinois families, so, you know, as we work through this process we're gonna listen to partners, we're gonna listen to, and hear them out, but ultimately we gotta make sure what we're doing is right for Illinois businesses and families, in really an uncertain time.

- Senate Republican Leader John Curran, thank you so much.

We'll be checking in with you and your members here, in coming weeks.

- Thank you, Jak.

- Democratic House Speaker Emanuel Chris Welch joins us now in the program.

Welcome back, It's good to have you here, Mr. Speaker.

- Well, thank you.

It's great to be back.

Good to see you.

- Indeed, indeed.

Big day at the Capitol, the Governor outlined his spending plans and priorities for the spring session of the Illinois General Assembly.

Lots to take in, but what are the high points as far as you're concerned?

- Well, that speech was exceptional.

The Governor has gotten better and better each speech he's delivered since being our governor.

And it's because of the great work that we're all doing together.

And, you know, the fact that we're able to talk about creating free early childhood for three and four year olds in this state, the fact that we're able to talk about free community college because of MAP grants, the fact that we're able to talk about creating a statewide program to end homelessness is truly a reflection of the work that has been done over the last few years, to put us in such great fiscal shape.

There's more work to do.

- How do the goals that the Governor outlined during his speech match up with the goals that House Democrats want to see coming out of the spring session?

- Jak, I think the goal matches up very well.

We wanna fund early childhood education.

We wanna fund K through 12 education.

We wanna better invest in higher education.

We wanna help the poor, we wanna end homelessness, we wanna create housing.

These are things that we've been talking about and wanting to do for a long time, and we're in a great position to do it.

- Is the money there for that?

Because the House of Republicans and Senate Republicans are, I'm sure, not going to weigh in, chime in as optimistically as the House and Senate Democrats are, on the spending plan.

- Well, you know, even the civic committee a week ago, put out a report that said Illinois is in the best fiscal shape it's been in in decades.

And that's because of work that Democrats have done.

We've pretty much done it alone 'cause Republicans have consistently voted no on budgets, and we are in the best fiscal shape we've been in in decades.

And it's allowing us to be able to do things that we've only thought about for years.

And, you know, we've got good revenues, we've been good fiscal stewards, which has been acknowledged by six credit upgrades.

We've had four balanced budgets in the grow, this budget that was presented today is a balanced budget with a surplus.

We have a rainy day fund, over $2 billion in a rainy day fund.

These are things that haven't been happening in Illinois in over two decades, and so our friends on the other side are gonna disagree with that, that's why their numbers continue to dwindle.

- You mentioned a little earlier that Civic Committee of the Commercial Club idea, their analysis of the budget, and one of the things they're talking about is trying to do a surtax to pay down the $140 billion in unfunded pension liabilities.

Is that an idea that's getting any serious traction in the capital?

- Well, I don't think so.

I mean, I think, you know, they acknowledge the great work that we've done but there's also a lot of recommendations in there that people strongly disagree with.

And so, I don't know if that's getting serious traction at all just because there's so much real disagreement about that particular item.

- Some of the progressive members of your caucus, they're wanting to see more things like expanding tax credits for children to give working families a break.

Will that figure into the final equation, Mr. Speaker?

- Well, it's too early to tell.

What happened with the Governor's budget address was the start of their budget negotiation season.

And now, it's started in earnest, our members are gonna have a lot of opinions, our progressive caucus, which is the largest it's ever been in history of our chamber, they have a very powerful voice and I'm sure they're gonna advocate strongly for that.

And we're gonna let the process play out and see where it ends, here in May.

- There is a request on the Republican side of the aisle to try to get some utility rate relief for Ameren customers in downstate Illinois.

Anything to report on that, sir?

- Well, that's not just a Republican issue, there's democrats that support that, as well.

But again, that's part of the legislative process; we need to make sure that we take that through our process, it's vetted, all sides are heard.

And one of the things that I prided myself on here in the last two years, is slowing things down, and making sure all voices are heard on an issue.

If it's the right thing to do, we're gonna get it done.

- Mr. Speaker, we will be checking in with you throughout the spring session about how progress is being made in all of this before the end of the session, later in May.

Thank you so much, sir.

- Thank you.

It's an honor - House Republican Leader Tony McCombie of Savannah joins us now for her thoughts on the Governor's budget message and his political agenda for the rest of the spring session.

Leader, good to have you on the program again.

- Well, thanks for having me, I appreciate it.

- Democrats, of course, applauding pretty much everything that the Governor had to say today, and believing that the state has the money to pay for the new proposals that he has for early childcare, education, as well.

What are your thoughts?

- Well, you're right, the Illinois Democrats certainly got a workout today with the up and down, and the clapping for sure.

But there was a lot of spending today, that's what I heard, which had no sustainable funding source which is a real concern for me.

- The Democrats seem to be fairly confident that there's enough there to do all the heavy lifting to meet the Governor's goals.

Are Republicans worried there's a fiscal cliff that we're gonna drive off at some point?

- Absolutely.

And I'm also concerned with them thinking that, because the Governor's address and the Governor's numbers himself, say that the revenues are down.

So, if the revenues are down almost 3% and spending's up almost 8%, the math just does not work.

So we're definitely, you know, the intent might be good of the programs, but we're certainly headed in the wrong direction.

The only way that you're gonna be able to fund these year after year, is, either raise cost, raise taxes, or cut programs to other vulnerable groups.

- As you look at the numbers, and you looked at the same numbers that the Governor's office is using, where does it depart from the sound fiscal policy that you wanna see?

- Well, like you said, the Governor gave us the numbers, they show almost a 3% decrease in revenue, and almost an 8% increase in spending.

So to think that it's sustainable, I think is unrealistic.

We didn't make up these numbers, they were given to us, and we just analyzed those numbers.

But he himself said that the revenues are down, so I don't know, and a question I had was, is this one time spending or are these programs?

If you're gonna start a daycare, a childcare, educational programs, today, for this year, you're gonna have to continue those year after year.

"Is that the plan?"

"Yes, that's the plan."

The only way that sustainable funding happens with these kind of numbers, again, 3% decrease in revenue, almost 8% increase in spending, is we're gonna have to find the money, and that's by increasing revenues which we know is a tax increase, or cutting services, or cutting programs for other vulnerable groups.

And so, I think, really, I think Comptroller Mendoza is right to be leery of any new programs at this time, especially when the Governor's team is even telling us that maybe in the fall we could see a mild recession, and the revenue numbers could even be less.

But yet, here we are, risking putting new programs in place.

- I have to ask one more question before we go, and that has to do with utility rate relief.

House and Senate Republicans have both been asking for upwards of $200 million in rate relief for Ameren customers in downstate Illinois.

Where do things stand with that as far as you know?

- Well, from my understanding those funds have already been appropriated, but they just haven't been released, for some of that rate relief.

But, back to the root causes, is we in the House and the Senate, pass policy that makes it difficult for us to have reliable energy.

So, you're passing one thing in one hand and then you're taking it away, which has, sometimes, a negative result, and that's what you're seeing right now.

- Leader, thanks so much for your time, we will be checking back with you and members of your caucus in the coming weeks, here on "Illinois Lawmakers."

Always good to have you on the program.

- Anytime, my pleasure.

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