Illinois governor’s new budget aims to keep schools funded

CHICAGO With most of Illinois’ fiscal 2016 budget mired in a political impasse, Republican Governor Bruce Rauner on Wednesday will announce a plan to ensure state money continues to flow to public schools in fiscal 2017, according to his office.

In his second budget address, Rauner will announce that Illinois will fully fund K-12 schools for the first time in seven years under a bill to be introduced by Republican leaders of the Democrat-controlled legislature.

The governor plans to immediately sign the bill into law as long as it arrives on his desk “clean” with “no games,” his office said.

A fiscal 2016 school funding bill passed by Democrats last year marked the only major budget measure Rauner initially signed, leaving the fifth-largest U.S. state to operate on court-ordered spending and ongoing appropriations for bonds and pensions for the fiscal year that began July 1.

Spending is largely at fiscal 2015 levels when revenue was higher before temporarily raised income tax rates rolled back on Jan. 1, 2015, making Illinois’ finances even shakier.

Rauner has blocked any budget deal unless Democrats make concessions on his so-called Turnaround Agenda. His plan would weaken collective-bargaining rights, limit workers injured on the job from obtaining compensation from employers, freeze property taxes and change how legislative district boundaries are drawn.

Not since Illinois enacted its current constitution in 1970 has the state gone this deep into a fiscal year without having a budget in place, according to a legislative analysis seen by Reuters.

There is no sign the 7-1/2-month-long impasse between Rauner, a former private equity investor, and Democratic lawmakers is abating.

“I’m expecting to hear more of the same from the governor: ‘Give me the Turnaround Agenda, give me redistricting reform, and we can talk,'” said State Representative Greg Harris, a Chicago Democrat.

Still, pressure is building on lawmakers as public universities and an array of social-service providers remain unfunded, resulting in layoffs and program cuts. Low-income college students also have not received state-funded scholarships because of the impasse.

“I don’t look for a breakthrough to come from (the governor’s) speech,” said State Representative Dan Brady, a Republican. “I look for the breakthrough to come because the pressure has been turned on all of us from those affected from this budget impasse.”

The ongoing stalemate is deepening the fiscal woes of the fifth-largest U.S. state.

The state’s backlog of unpaid bills, currently at $7.2 billion, could reach $12 billion by June 30, Illinois Comptroller Leslie Munger warned recently.

Illinois’ structural budget deficit is projected to balloon to $6.6 billion from $4.2 billion in fiscal 2015, according to a report released by the Institute of Government and Public Affairs at the University of Illinois.

(Additional reporting by Karen Pierog in Chicago; Editing by Matthew Lewis)

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