CHICAGO (Reuters) – The Illinois Senate on Thursday passed a bill to plug a $1.6 billion hole in the state’s current budget by cutting spending on most programs by 2.25 percent and tapping money from other funds.
The 32-26 Senate vote followed House passage of the measure on Tuesday. The bill now heads to Governor Bruce Rauner, who said he plans to sign it into law as soon as possible.
“As promised, we are eliminating a $1.6 billion deficit without borrowing or increasing taxes on hard-working Illinois families,” the Republican governor said in a statement. “By choosing to make difficult decisions on a bipartisan basis, the General Assembly is helping set a new tone for what can be achieved in Springfield.”
Democrats, who control both the House and Senate, are unlikely to support Rauner’s $32 billion fiscal 2016 budget, which includes $6.6 billion in spending cuts and savings from proposed pension changes. The new fiscal year begins on July 1.
Under the bill, $1.3 billion of the state’s fiscal 2015 budget deficit would be filled through transfers from various funds, including ones used to finance roads. It also gives Rauner the ability to transfer some funds between agencies, and use 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.
The legislature also sent the governor an appropriations bill that 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 childcare.
Illinois’ credit ratings at the bottom of the A-scale are the lowest among the 50 states and carry negative outlooks that could tip the state into the low-investment grade level of triple-B.
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 in the state’s low credit ratings.
(Reporting by Karen Pierog; editing by Matthew Lewis)