Aug 1, 2007 12:12 am US/Central
Time Runs Out On State Budget As Deadlock Drags On
Temporary Budget Expires Midnight Tuesday
CBS 2's Mike Flannery and the Associated Press contributed to this report.
SPRINGFIELD, Ill. (CBS) ―
Illinois officials failed to come up with a new budget Tuesday, thrusting state government into uncertain territory by allowing the old budget to expire.
Gov. Rod Blagojevich and other state leaders assured the public that state services will continue unchanged for now. But if a budget is not in place by Aug. 8, the state will miss dates for paying employees and sending aid to schools.
Blagojevich has an answer for those 56,000 state employees wondering what happens next: keep working.
Blagojevich sent a letter to state employees Tuesday asking them to report to work as usual and promising they will get paid for doing so.
Blagojevich's office says contingency plans are being worked on in case the impasse continues. But his staff won't discuss details of the contingencies or say at what point they would need to be put in place.
The Democratic governor has been urging lawmakers to pass another budget extension. Instead, lawmakers are negotiating a full-year budget.
"All four leaders told the governor that all four leaders are working toward a 12-month budget," Madigan told reporters Tuesday.
Despite his bland public statements, Madigan's battle with Blagojevich is as bitter behind the scenes as it's ever been, with Madigan still trying to put together a state budget that would attract a veto-proof super-majority of general assembly votes, enough to deny the governor's demand for a big new health insurance program.
"Sooner or later we're gonna get a full budget, and again, the challenge is whether or not you just sell out, starve education, slash health care force the people of Illinois to pay more in taxes, whether or not we have a budget that really helps people," Blagojevich said. "And as I've said before and I'll say it again, this is the year to do important, big things for families across Illinois."
The lack of a state budget would start to pinch next week. Due Aug. 8 are 5,000 state employee paychecks and $170 million in aid payments to local school districts across the state.
"I think we're close," Madigan said after meeting Tuesday evening with the governor and other legislative leaders. "As far as I'm concerned, I can see a budget that can be passed very quickly and be signed by the governor."
Others were less optimistic.
Deputy Gov. Sheila Nix said Blagojevich continues to insist on a major new health insurance program, which has been a sticking point in negotiations. The legislative caucuses remain divided on how much to expand casino gambling and whether to use that money for schools or construction.
As CBS 2 Political Editor Mike Flannery reports, the attraction of new casino gambling is that it generates revenue without a general tax increase. Still, it's not done deal, and the governor wants another temporary one-month budget to avert a shutdown. His arch-rival in Springfield, House Speaker Michael Madigan, turned thumbs down on that request.
CBS 2 reported exclusively several months ago that Mayor Richard M. Daley and Senate President Emil Jones had put the long-debated Chicago casino back in play. Now, in what may be the final phase of budget bargaining, it's still on the table.
"We're primarily talking about one," said Republican Senator Frank Watson of a casino in Chicago. "That seems to be the logical choice. That's the one we've been talking about for quite a while. There is a 10th license that's still out there."
Watson spoke after meeting for nearly two hours in Jones' office; the senate president is Springfield's biggest booster of expanded gambling. The Chicago Democrat had met earlier privately with Blagojevich, who was once an outspoken opponent of new casinos, but now willing to sign such legislation.
"I think there really is some consensus among Republicans and some Democratic leaders that building schools, fixing roads, investing in the infrastructure of our state and putting people to work, that one way to do it is through an expansion of gaming, whether it be more positions at existing riverboats, whether it be a Chicago casino," Blagojevich said.
Mayor Richard M. Daley's quiet push in Springfield for a Chicago casino would also generate new revenue for city government, which the mayor's own budget director revealed Tuesday is facing a shortfall of more than $200 million next year.
The governor and others have for days stressed that expiration of the temporary budget should not cause an immediate crisis.
That's because most vital expenses, such as employee paychecks and payments to schools, aren't due until later in the month. The state should be able to keep running for at least a few days without major problems, leaders argue.
But for how long is a mystery.
Blagojevich said at a bill-signing Monday that his office has been making preparations for months. "We're prepared to meet whatever contingency is necessary," he said.
He didn't elaborate on what those preparations are, and his staff could answer few questions about how the state will operate without a budget.
They also won't discuss when services, such as state parks, police patrols and highway operations, might be affected by the budget impasse. They insist that's not going to happen right away.
"There's no clear answer to that," Blagojevich spokeswoman Rebecca Rausch said. "We hope it doesn't continue long at all."
Comptroller Dan Hynes warned Monday that severe financial consequences would hit by Aug. 8, when nearly 5,000 employees' paychecks and $170 million in state aid payments to schools need to be processed and sent out.
"It will be a deadline that hurts people," Hynes said. "Every day will be a potential crisis because no one will know what's going to happen the next day."
Secretary of State Jesse White last week committed to keeping driving facilities throughout the state open without a budget.
Workers are moving ahead as usual with preparations for the Illinois State Fair, which is scheduled to begin Aug. 10.
Schools and universities also are still planning to open classrooms later this month. Officials say they likely could run for a while using non-state funds, such as tuition income and local property tax proceeds, but getting a state budget in place is vital.
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