CHICAGO (Reuters) - A fiscal 2016 budget for Illinois remained in limbo on Tuesday as Governor Bruce Rauner and Democratic legislative leaders remained at odds over his so-called turnaround agenda of reforms.
With the new fiscal year starting on Wednesday, the Republican governor vowed to keep the fifth-largest U.S. state operating in the absence of an enacted spending plan.
"In the meantime, we're going to manage the government without a budget, try to minimize the disruption to the people of Illinois and we're committed to working hard to make sure the men and women that serve the government are paid their full salaries on time," Rauner told reporters in the state capital of Springfield.
The governor continued to insist the Democratic-controlled legislature take up reforms, including a local property tax freeze, legislative term limits, and workers' compensation changes, in order to aid the state's sagging finances and boost economic growth.
Illinois has the worst-funded pension system and the lowest credit ratings among the 50 states.
"Unfortunately the governor continues to insist on sideshow policies that will promote the corporate class at the expense of the middle class," said Rikeesha Phelon, spokeswoman for Senate President John Cullerton. "There is no resolution in sight."
She added that Rauner chose to lead Illinois into a government shutdown by vetoing last week most of the fiscal 2016 budget passed by Democrats.
Rauner signed a school funding budget into law, but vetoed other spending bills, citing a nearly $4 billion hole in the Democrats' $36.3 billion budget.
The Illinois comptroller has said most state payments, including payroll, will stop without appropriated funds. State Attorney General Lisa Madigan on Monday said Illinois' constitution and statutes prohibit expenditures in the absence of an approved budget.
But Rauner insisted that a deal can be worked out to keep paying workers. He also rejected criticism from House Speaker Michael Madigan, who has said Rauner's "extreme" reforms were deterring progress on a budget deal.
"Our policies are not extreme at all. They're common sense and they're bipartisan," Rauner said, adding Illinois' debt, deficit, property taxes, and conflicts of interest were extreme instead.
The governor also said he was committed to helping the cash-strapped Chicago Public Schools with a $634 million pension payment due on Tuesday. The House may once again vote on a bill to delay the payment for 40 days after the measure failed to attract enough votes last week.
(Reporting by Karen Pierog; Editing by Matthew Lewis)