Senate budget deal brewing ahead of lame duck session

Republican and Democratic state Senate leaders are quietly working on a deal to end the state’s painful budget impasse — a bipartisan mix of tax increases and select items from the governor’s Turnaround Agenda.

Bills could be filed as soon as Monday, but that could set the stage for a clash with the House. House Democrats on Friday filed competing measures, just days before legislators come back for the lame duck session in Springfield.

Gov. Bruce Rauner has said for months that he’d only approve a stopgap budget with a permanent property tax freeze and term limits. The state’s partial budget expired on Jan. 1. And Rauner and the four legislative leaders haven’t met since Dec. 7.

But Illinois Senate President John Cullerton and Illinois Senate Republican Leader Christine Radogno have been meeting and negotiating a budget package, which includes: enacting term limits on legislative leaders; hiking the income tax to 4.9 percent; adding a statewide beverage tax on sugary drinks; a two-year property tax freeze, as well as changes in workers’ compensation and pension reform, according to several legislative sources. Cullerton and Rauner both favor a “consideration” model, which, for example, would sweeten employee health benefits in return for a limit on how much future pay raises would be pensionable.

“The two leaders in the Senate have a much more congenial relationship and continue to talk and have always tried to talk about what’s best for the state of Illinois,” Radogno spokeswoman Patty Schuh said of the negotiations.

And speaking at Carbondale Community High School on Friday, Rauner said he had been briefed by Radogno about those discussions earlier this week.

“I’m not familiar with all the details. I think it is still being worked out. I think some legislation is beginning to be drafted but I’m heartened by that,” Rauner said. “I’m optimistic that Democrats and Republicans are negotiating in good faith to come up with changes to our system so it’s not broken anymore.”

Many legislative members too said they’re optimistic about the Senate talks.

But the House may act on its own. Two amendments to Senate bills were filed on Friday and referred to the Illinois House Rules Committee. One bill would freeze property taxes permanently, while the other would make changes to workers’ compensation, focusing on regulating insurance companies.

Rauner and many Republicans say that change isn’t enough. Rauner favors changes to causation — which would exclude diseases like obesity, heart disease, diabetes and other degenerative conditions from workers’ compensation claims.

Illinois House Republican Leader Jim Durkin on Friday said the House filings are just more political theater.

“What our members and I have become very accustomed to over the past few years are non-substantive political games strictly for purposes of getting people on awkward votes,” Durkin said. “We’ll deal with it but I do think what’s happening in the House is more for show. The Senate is doing something in a collaborative, bipartisan manner, something that seems to have been lost in the House for many years.”

Madigan spokesman Steve Brown said the property tax bill was filed because of “renewed interest.”

“There are property tax bills that are posted in the revenue committee. It’s another opportunity and people are interested, and concerned on that issue. The House has done it a bunch of times but you know there’s renewed interest so perhaps there will be an opportunity,” Brown said.

Brown said there have been no recent discussions between Madigan and Cullerton.

Language in the property tax freeze amendment is identical to a bill drafted by Rep. Mark Batinick, R-Plainfield, during the veto session, and that’s a bill Rauner had said he’d support.

But Batinick on Friday said his bill was intended to be “a small piece of a potentially larger grand bargain.”

“I don’t think my bill works in a vacuum,” Batinick said. “Realistically, we need a property tax drop; a freeze isn’t even enough. But you can’t just do a freeze in a vacuum without doing other things, whether it be unfunded mandates, work comp savings, a bunch of other things to make it easier to operate government.”

Still, Batinick said if the property tax freeze bill is called for a vote, he is likely to support it “to help force other actions.” Batinick said members have been “exasperated” during the impasse and that pressure to solve the budget crisis is motivating legislators.

If part of the Senate deal includes an income tax hike, many legislators already went on record in December saying they wouldn’t support one during the lame duck session. Rep. David McSweeney, R-Barrington Hills, sponsored a House resolution that put legislators on record who campaigned saying they wouldn’t support a tax hike. It was also seen as a way to prevent lame duck legislators from passing controversial bills on their way out. The resolution passed 87-12.

On Friday, McSweeney said he’d oppose an income tax hike: “A massive 30 percent increase in income tax, combined with a new beverage tax will kill jobs in the state and hurt families. It’s an absolute joke. It’s the exact opposite policy we should be following.”