Following Tax Hike, Budget Remains Priority for Ill. General Assembly

The income tax increase that took effect at the start of 2011 will give state legislators some buffer.

With a new General Assembly getting to work on Tuesday, the budget will be front and center. Democrats still hold a sizable majority, but Republicans gained enough seats that there must be at least some GOP support in both chambers for borrowing and other measures to pass.

The new makeup of the legislature could put a wrinkle in Democrats' efforts to erase the state's backlog of bills. Illinois' budget was so thin, the state has held off paying social service organizations, schools, and businesses with state contracts.

Democrats want to leverage the incoming revenue from the tax hike to borrow more than $8 billion to immediately make those vendors whole, but first they will have to convince Republicans ... who say they are withholding support until there are spending cuts and other changes.

Besides borrowing, a revamp of the workers' compensation system and reductions in current state employees' pension plans could be major topics this year at the capitol.