No budget deal yet as Illinois nears end of legislative session

© Reuters. FILE PHOTO - Illinois GovernorBruce Rauner talks to media© Reuters. FILE PHOTO – Illinois GovernorBruce Rauner talks to media

By Dave McKinney and Karen Pierog

CHICAGO (Reuters) – A deal to end Illinois' nearly two-year-old budget stalemate remained elusive on Wednesday as lawmakers faced a midnight deadline to agree on a state spending plan with simple majority votes.

The impasse between Republican Governor Bruce Rauner and Democrats who control the House and Senate showed no overt sign of ending, which could push budget deliberations past Wednesday's scheduled end of the legislative session. Starting on Thursday, lawmakers would need to muster a tougher majority vote of three-fifths to pass a spending plan.

The nation's fifth-largest state is nearing the June 30 end of its unprecedented second-straight fiscal year without a full budget.

As a result, Illinois' pile of unpaid bills, a barometer of the state's structural deficit, has topped $ 14 billion. Major rating agencies, which have pushed Illinois down the credit scale six times to a level two steps above junk since Rauner took office in January 2015, have signaled more downgrades are possible.

Despite offering no evidence that a budget deal with Democrats is imminent, Rauner told a Facebook (NASDAQ:) Live audience on Tuesday he believed a budget accord was within striking distance – as long as it included “true, lasting property tax relief.”

“One way or another, we’re going to get this done,” Rauner said. “Persistence is the key.”

In a new wrinkle on his property-tax freeze pitch, Rauner said he believed residents should have the ability to force local governments through referenda to lower property taxes.

That provision was not included in two separate Democratic-sponsored property-tax freeze measures that passed the Senate and moved to the House on Tuesday. Both offered two-year freezes on property-tax extensions for school districts and local governments outside Chicago. Levies dedicated to pension and debt payments were exempted from the freeze.

After the bills passed the Senate with veto-proof majorities, the governor’s office pounced on the legislation as unacceptable.

“This is a phony two-year freeze riddled with holes being offered in exchange for a very real and permanent, massive tax hike,” Rauner spokeswoman Eleni Demertzis said.

A $ 37.3 billion fiscal 2018 budget plan that includes income tax hikes, a sales tax on services, and spending cuts passed the Senate last week with no Republican votes.

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