By Monica Stabile

Illinois Republican senators called for an immediate state government spending cap and a 10 percent spending cut to all government agencies in a new state budget plan unveiled Tuesday.

The plan comes after Republicans scuttled a “grand bargain” budget plan last month, to the frustration of Democrats in the chamber and Senate Republican Leader Christine Radogno.

The “Taxpayer Bargain” plan released Tuesday by the Senate Republicans would implement a spending cap on state government until the budget deficit is balanced, or else legislators would forfeit their salaries for that fiscal year. Sens. Kyle McCarter, R-Lebanon, and Dan McConchie, R-Hawthorn Woods, the legislation’s sponsors, did not indicate how long state government would need a spending cap under their plan.

The proposed budget includes no tax hikes and no new taxes. Revenue increases would be allocated to unpaid bills, education, pension legacy costs, roads and bridges.

Illinois has racked up a $12.7 billion deficit due to a two year budget impasse, not counting the state’s unfunded pension costs, which are estimated to be $130 billion, according to the Illinois State Employees’ Retirement System.

“Illinois has to live within its means,” McCarter said. If Illinois families can’t afford to overspend, then the government shouldn’t either, he added.

The bargain is composed of 17 separate pieces of legislation, some of which have not yet been filed. It is a combination of ideas from both Republicans and Democrats, despite having zero Democratic sponsors.

It would implement Senate President John Cullerton’s pension legislation to provide state employees a choice of sticking with the traditional pension plan or moving to a 401(k)-style plan.

Additionally, the state would shift the responsibility of funding pensions to schools, universities and municipalities in exchange for financial subsidies to pay for unfunded mandates.

According to the proposed budget plan, the state would save $200 million per year or $1 billion after five years if pension costs are transferred to K-12 schools.

The plan also includes Gov. Bruce Rauner’s recommended pension changes to prevent salary increases used to calculate pensions in the Teacher Retirement System and the State University Retirement System.

In 2015 and in 2016, the Illinois Supreme Court struck down on constitutional grounds proposed changes to state pensions that attempted to “diminish or impair” the current pension system.

Cullerton’s office responded to the plan with cautious optimism.

“It’s great to see so many senators actively working on budget solutions. That’s to be applauded. These senators deserve a lot of credit for stepping forward and recommending specific cuts at a time when the governor has said he’s afraid to,” said a spokesman for the Chicago Democrat. “So, we’ll take a look at their plan, see if it adds up and try to find ideas on which we might be able to build consensus.”

The senators also called for a permanent property tax freeze to divert funding from education to state coffers. The proposed budget also would require universities to cut spending by five percent, or $553 million.

Medicaid services for the most vulnerable would be protected, McCarter said. Proposed changes to Medicaid include Smart Card, a pilot program that aims to cut the total cost of Medicaid, along with a drug testing requirement for recipients to determine eligibility, implementation of LINK cards with the cardholder’s photo to prevent fraud, and deactivation of LINK cards for recipients with outstanding criminal warrants.

The Taxpayer Bargain plan is the latest budget proposal presented by the Illinois Senate after the bipartisan ‘grand bargain’ failed to secure the necessary votes. Democrats in the Senate blamed Rauner when Senate Republican Leader Christine Radogno announced she would be the only Republican in her caucus to vote in favor of the package.

Announcing their new plan, Republicans characterized it as painful but necessary.

“For years, taxpayers across the state have been asking us to get our financial mess in order,” McConchie said in a prepared statement. “Even though spending cuts will be difficult and painful, it is necessary if we want to move forward toward a path to prosperity.”

To read the GOP Taxpayer Bargain plan, click here (PDF).

Contact Monica Stabile at intern@springfieldbusinessjournal.com.