CHICAGO (Reuters) - The Illinois Senate easily passed a $38.5 billion fiscal 2019 general fund budget on Wednesday that was hailed by legislators as being balanced and bipartisan in a marked departure from years of political gridlock.
The 56-2 vote sends the measure, hammered out by Democrats and Republicans in both chambers, to the Illinois House, which will take it up on Thursday, the final day of the legislature’s spring session.
“This budget helps restore stability to Illinois, which is what we need,” said Democratic Senate President John Cullerton in a statement. “There remains more work to do, but this is a bipartisan accomplishment that we can hopefully build upon.”
The budget has had a smooth ride this year compared with recent years.
An impasse between Republican Governor Bruce Rauner and Democrats who control the legislature left the nation’s fifth-largest state without complete budgets for an unprecedented two-straight fiscal years. Lawmakers finally enacted a fiscal 2018 budget and income tax rate hikes over Rauner’s vetoes last July.
Revenue from the tax increase, which Rauner has vowed to roll back, is incorporated in the budget for the fiscal year that begins July 1. The spending plan does not include controversial elements in Rauner’s proposed spending plan, which called for shifting some pension costs currently paid by the state onto local school districts, state universities and community colleges.
There was no immediate comment from the governor’s office.
The budget adds $350 million to a new K-12 school funding formula enacted last year, increases higher education spending by 2 percent, reduces cuts in state aid to local governments, and appropriates $1.3 billion to pay previously incurred expenses.
It also includes a voluntary buyout of pensions for vested former workers and for 3 percent cost of living increases due current workers in retirement — moves that are expected to save the state about $423 million in fiscal 2019.
Illinois’ $129 billion unfunded pension liability, along with a chronic structural budget deficit that worsened during the impasse, led to a series of credit rating downgrades that left the lowest-rated state a notch or two above junk level.
Credit rating analysts have said they are looking for the new budget to take steps towards addressing the state’s financial problems.
Reporting by Karen Pierog; Editing by Jacqueline Wong