Democrats highlight potential obstacles to governor's budget plan as 2016 negotiations begin



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SPRINGFIELD, Illinois — With just weeks left before Illinois' 2016 budget must be passed, Democratic leaders and GOP Gov. Bruce Rauner remain far apart on how to bridge a $6 billion revenue gap.

A memo circulated by Senate Democrats late Tuesday questions roughly $5.8 billion in savings in Rauner's proposed $32 billion budget. The caucus suggests the proposal may not only violate a provision of the Illinois constitution, which promises employee benefits shall not be "diminished or impaired," but also likely requires changes to state law and federal policies and requires negotiations with labor unions.

Among the senators' concerns is that cutting $1.5 billion from the Medicaid health care program for the poor, which is funded by state and federal dollars, would require federal approval.

Lawmakers began meeting this week to work on the governor's "Turnaround Agenda," a set of pro-business priorities Rauner wants the Legislature to approve in exchange for consenting to new revenue to save programs near and dear to Democrats. Without that grand bargain, the governor's proposed spending plan would balance the budget entirely by slashing spending for things like Medicaid, human services programs and state employees' group health care. The plan also includes a roughly $300 million increase to K-12 education, which the governor has identified as a top priority.

The Democrats' memo notes the Medicaid cuts would require a change in state law as well as federal approval. Cutting roughly $500 million from various human service programs could violate a federal law requiring states to provide refugee services and judicial consent decrees, including one governing caseloads and levels of care for wards of the state at the Department of Children and Family Services, the memo says. The caucus also notes that a $570 million cut from group health care would have to be negotiated with labor unions, to which employees belong.

In recent weeks, Democrats also have repeatedly mentioned that the pension reform proposal — which Rauner says could save the state $2.2 billion — could run into constitutional challenges. Lawmakers found that out with their 2013 overhaul, which is facing a lawsuit pending in front of the Illinois Supreme Court.

"There are a lot of pieces in there that are not implementable," Heather Steans, a Chicago Democrat and one of two Senate appropriations chairs, said. "It's not savings you can really bank on."

She called the administration's proposal "not a realistic position" but a "negotiating position."

Rauner's deputy chief of staff Mike Schrimpf said it's been known for months that the governor's budget, introduced in mid-February, is contingent on "statutory changes" to state law.

"The governor is committed to making structural changes to state government," Schrimpf said. "The Senate Democrats have known that since February 18, as has anybody who's been paying attention."

Schrimpf did not, however, address the possible complications with federal law or labor unions that the caucus cited.

Both sides spent months negotiating how to fix to $1.6 billion hole that stems from the state's temporary income tax increase expiring in mid-January, which lawmakers didn't plan for in the budget passed last spring. Late last month, a bill passed that filled the gap through a combination of transfers from special funds and across-the-board cuts, while the Rauner administration suspended roughly $26 million in grant programs.

Senate Democrats have held hearings across Illinois on the effects of the cuts, and House Speaker Michael Madigan has formed a budget oversight panel charged with reviewing some of the cuts Rauner made to state grant programs as part of the fiscal year 2015 fix.

"That's a pothole compared to a crater that we're dealing with for next year" Steans said, comparing this year's budget hole with next year's. "I think we're just trying to highlight that."

Lawmakers face a May 31 deadline to pass a budget.

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