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Illinois governor seeks power to balance state budget

SPRINGFIELD, Ill. (Reuters) – Illinois Republican Governor Bruce Rauner on Wednesday called on Democrats who control the legislature to give him the power to balance the state’s chronically unbalanced budget if they continue to reject his proposed reform package.

In his second budget address to the legislature since taking office, Rauner said residents were “sick and tired” of a political impasse that has left the fifth-largest U.S. state without a full budget for nearly eight months.

The wealthy venture capitalist turned politician offered two fiscal 2017 budget proposals: a $36.3 billion general fund spending plan that incorporates his so-called turnaround agenda that Democrats have opposed, or a budget tied to an Unbalanced Budget Response Act that would empower him to reduce spending to $32.8 billion.

“I won’t support new revenue unless we have major structural reforms to grow more jobs and get more value for taxpayers,” Rauner said in his annual budget speech.

Rauner has blocked any fiscal 2016 budget deal unless Democrats make concessions that 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.

House Speaker Michael Madigan, a Chicago Democrat, rejected an all-cuts budget plan, saying in a local public television interview that a balanced approach of cuts and new revenue is needed.

Rauner also pledged to work on a bipartisan plan to revamp the state’s school funding system, while warning that the Chicago Public Schools (CPS) “is threatening a lawsuit against the state.”

CPS officials have said the district, which is mired in its own financial crisis, is a victim of unequal funding by the state.

Rauner proposed boosting per-student funding in K-12 public schools to $6,119, the highest level in seven years. But he emphasized he wants a “clean” bill, without add-ons by lawmakers, to land on his desk.

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

Spending is largely at fiscal 2015 levels when revenue was higher thanks to income tax rates that had been temporarily raised, but which were rolled back on Jan. 1, 2015, which made Illinois’ finances even shaker. Public universities and scholarships for low-income college students remain unfunded.

Several hundred protesters, mostly students from public universities, crowded into the rotunda of the State Capitol and chanted “save our schools” and “hey, hey, ho, ho, Governor Rauner has got to go” while the governor delivered his speech inside the ornate House chambers.

As Rauner exited the House and scurried by protesters, the crowd erupted in loud boos.

Illinois’ current $7.17 billion backlog of unpaid bills, a barometer of the state’s ongoing structural budget imbalance, could reach $12 billion by June 30, Illinois Comptroller Leslie Munger warned recently.

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

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