Governor threatens another $420 million in cuts over budget stalemate

From Illinois Business Journal news services

SPRINGFIELD – In the ongoing poker battle over the state budget, Gov. Bruce Rauner hinted at his latest hand and Democrats can only hope it’s a bluff.

The Republican’s administration said Friday it has initiated steps to prepare for an additional $420 million in funding he plans to cancel for legislative earmarks, as well as a freeze to non-transportation capital projects

“House Speaker Mike Madigan, Senate President John Cullerton and their caucuses two weeks ago finished passing a budget with a $4 billion hole. Since that time, Speaker Madigan and President Cullerton have refused to pass real, compromise reforms that will grow the economy, pay down the debt and end the era of wasteful spending and broken budgets while implementing parliamentary maneuvers to keep the governor from acting on the budget bills,” Rauner said in a statement. “In preparation for the possibility of having no budget on July 1, or a budget with a $4 billion hole, the Administration is initiating its second round of steps to responsibly manage the state’s finances. However, the options available to the Administration remain limited because the Madigan-Cullerton budget includes no reforms.”

Among the steps initiated, most of them effective July 1:

– Notifying all State of Illinois vendors to prepare for the potential of a longer delay in receiving payments for goods and services provided to the state.

– Suspending capital projects, including construction at state facilities, schools and colleges.

– Suspending all capital grants for legislators’ earmarks and non-bonded or “pay as you go” capital projects. (That freeze does not include road and other Department of Transportation projects.)

– Significantly reducing use of outside legal counsel by eliminating and/or reducing legal contracts.

Under the Department of Healthcare and Family Services:

– Reinstating timely re-determinations of Medicaid eligibility.

– Rolling back rates for ambulance services and renal care services to SMART-Act levels.

– Reducing managed care capitation rates.

– Discontinuing special Medicaid payments to some hospitals.

– Increasing eligibility threshold (Determination of Need Score) to a level more consistent with national eligibility levels.

– Achieving cost savings using new procurement strategy for purchasing durable medical equipment.

Under the Department of Natural Resources:

– Effective Sept. 1, suspending operations at the World Shooting Recreational Complex near Sparta. The site will become closed to the public and not available for events. All events scheduled through August 2015, including the Grand American, will not be impacted.

Under the Department of Agriculture effective July 1:

– Suspending funding to county fairs for premiums and fairground rehabilitation projects.

– Suspending funding for agricultural extension and 4-H clubs for premiums at agricultural shows.

– Suspending funding for premiums for Agricultural Education Fairs.

– Suspending funding for the University of Illinois Cooperative Extension Service.

– Suspending funding to the Soil and Water Conservation Districts.

Under the Department of State Police, effective July 1:

– Suspend FY16 initiative to purchase new forensic equipment.

Under the Office of State Fire Marshal effective July 1:

– Suspending funding for the Chicago Fire Department training program.

– Suspending reimbursements for fire department training to other local governments.

– Suspending funding for small fire-fighting and ambulance equipment grants.

Cuts are also being proposed to the Criminal Justice Information Authority, Department of Human Services, Department of Public Health, Department of Commerce and Economic Opportunity, Department of Transportation, Department of Revenue and Department of Veteran’s Affairs

“Governor Rauner has compromised repeatedly, but Speaker Madigan and the politicians he controls continue to block any real reform,” Rauner spokesman Lance Trover said. “It’s deeply troubling to see that Speaker Madigan remains committed to sacrificing the middle class in order to protect the political class.”

Democrats immediately shot back, criticizing the governor for being unrealistic regarding the threatened cuts.

Said Sen. Bill Haine, D-Alton:“These are ill advised reductions in public safety and crime prevention. Governor Rauner is the one who said he would not cut essential programs.”

Said Sen. Donne E. Trotter, D-Chicago: “He’s further cutting essential programs. He’s even cutting what he wants. He’s proposing cuts to businesses that bring in millions of dollars. He’s shutting down construction projects that employ hundreds of workers. Construction companies are businesses.”