Potential government shutdowns

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Features of State Legislatures

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State governments establish annual spending and revenue levels by agreeing on a budget, a process that involves both the legislative and executive branches of government. For 46 states, budgets operate along fiscal years that run from July 1 to June 30—the four states that operate along other timelines are New York, Texas, Alabama, and Michigan. When a state's legislative and executive branches fail to settle on a budget agreement before the end of a fiscal year, this sometimes results in cuts to government services or partial government shutdowns in which nonessential services cease to operate until a budget deal is reached. Nonessential services include things like Bureau of Motor Vehicle branches, state parks, and state lotteries.

Potential government shutdowns in 2017

Leading up to June 30, 2017, the six states listed below were on the verge of a partial government shutdown or faced potential spending cuts to nonessential government services. Four of these six states operated under divided government as of June 2017: Illinois, Maine, New Jersey, and Washington. The other states—Connecticut and Delaware—were Democratic state government trifectas. A state government trifecta is a term used to describe single-party government, when one political party holds three positions in a state's government. The 2017 state legislative sessions began with a total of six Democratic trifectas, 25 Republican trifectas, and 19 states under divided government.

• Connecticut
• Delaware
• Illinois
• Maine
• New Jersey
• Washington

Government shutdowns in 2017

Of the six states listed above, the following states experienced a partial government shutdown or faced potential spending cuts to nonessential government services. All three states operated under divided governments as of July 1, 2017.

Illinois

• Trifecta status as of July 2017: Divided Government
• In 2017, disagreements between Governor Bruce Rauner (R) and the Democratic-controlled Illinois General Assembly over the state budget drew national attention when S&P Global Inc. and Moody’s Investors Service downgraded Illinois' credit rating and some government services, including transportation projects and the state lottery, were on the verge of being shut down. Rauner and the legislature failed to come to an agreement on a budget during the regular session, which ended on May 31, leading Rauner to call a special session from June 21 to June 30, the last day of the 2017 fiscal year. A budget agreement was not reached before June 30, meaning Illinois entered the 2018 fiscal year without a budget.

• A budget was passed on July 6, 2017, when the legislature overrode Rauner's vetoes of a $36 billion spending plan and a $5 billion tax increase. In the votes in the Illinois House, 10 Republicans joined the Democrats in voting for the overrides. Up to this point, Illinois had not passed a budget since 2014, when Pat Quinn (D) served as governor. According to The Associated Press, two years was the longest any state had gone without a budget in recent memory.

• Important issues surrounding the budget debate included differences in Democratic and Republican plans concerning income tax rate increases, a property tax freeze, changes to regulations related to injured worker compensation, and the state's pension liabilities. The budget deal that eventually passed increased the personal income tax rate from 3.75 to 4.95 percent, increased the corporate tax rate from 5.25 to 7 percent, and left overall spending at $36 billion for fiscal year 2018.

• The budget had an impact beyond the state, costing Wisconsin millions from its state budget. This was because, as of July 2017, Illinois and Wisconsin had a reciprocity agreement to account for the greater number of Wisconsinites that cross the state border to work in Illinois, but not pay state income taxes, than Illinoisans who came to work in Wisconsin. With higher incomes taxes in Illinois, Wisconsin's reciprocity payment increased.

• Coverage of the budget negotiations centered on the relationship between Rauner and Speaker of the House Michael Madigan (D). As of July 6, 2017, Rauner was seeking re-election as governor in 2018 and Madigan was defending the Democrats' 67-51 majority in the state house. Rauner and Madigan disagreed on a number of issues including whether the income tax increases should have been permanent.

Education funding

• $8.2 billion in state aid for public schools was included in the budget agreement. However, language was also included that said $6.76 billion of the aid had to be dispersed through a funding formula that calculated state aid for school districts based on the cost of strategies that supporters say are proven to improve student performance. The funding for districts could be increased by elements such as income, property wealth, and English-learning needs. On August 29, the Illinois General Assembly passed a bill that included the necessary funding formula. Read more the timeline of events below.

• On May 31, the Legislature passed SB 1, which contained the necessary funding formula. Gov. Rauner indicated that he would veto the bill, causing Senate President John Cullerton (D) to hold it in the chamber. According to Rauner's office, the governor would not support the bill because he believed it would benefit Chicago at the expense of other areas of the state.

• On July 24, Rauner called the General Assembly into a special session starting July 26 to address education funding. He had set a deadline of 12:00pm CT on July 24 for Cullerton to send him SB 1 so that he could use his amendatory veto power to make unspecified changes to the provisions he disagreed with. When the deadline passed without Cullerton sending him the bill, he called the special session. On July 31, the last day of the special session, SB 1 was transmitted to Rauner.

• Rauner issued an amendatory veto on August 1, rewriting SB 1 to remove a $250 million block grant to Chicago Public Schools and changing how the funding formula determines state aid. According to the Illinois State Board of Education, Rauner's changes would result in a $463 million decrease in funding for Chicago Public Schools in the 2017-2018 school year. The Illinois Senate met on August 13 and overrode the veto by a 38-19 vote, with all Democrats and Republican Sam McCann voting to override. The Illinois House was scheduled to vote on the override on August 23, but Speaker Madigan cancelled the vote on August 22. He said that progress had been made in negotiations with Rauner and Republicans.

• On August 24, the four leaders in the General Assembly— Madigan, Cullerton, Senate Minority Leader Bill Brady (R), and House Minority Leader Jim Durkin (R)— announced that they had reached a compromise agreement on SB 1. According to Politico, the agreement kept the funding formula from SB 1 and included $75 million in subsidies for private school education. On August 28, 2017, the Illinois House rejected the agreement in a 46-61 vote. The chamber next voted on an override of SB 1. After the override vote received just 63 of the 71 votes it needed to pass, the chamber took up the compromise bill again and passed it 73-34. On August 29, the Illinois Senate passed the compromise bill by a 38-13 vote. Gov. Rauner signed the bill into law on August 31.

• According to The Chicago Sun-Times, some schools in low-income areas cannot remain open without the state money that is allocated by the budget. In addition to the state aid in the budget, education funding in Illinois also comes from property taxes levied by local governments. Areas that pay more in property taxes can spend more on schools and are less dependent on state aid.
• See also: Illinois General Assembly and Governor of Illinois

Maine

• Trifecta status as of July 2017: Divided Government
• A partial government shutdown ended in Maine on July 4, 2017, after Governor Paul LePage signed a $7.1 billion, two-year budget passed by the legislature. The final compromises were over the elimination of a proposed lodging tax increase and the allocation of additional money for public education. House Republicans were able to see the removal of an increase in the lodging tax from 9 percent to 10.5 percent. Democrats got additional funding to Head Start and Clean Election programs, as well as $162 million to go towards K-12 spending.
• Non-essential government services—such as state parks and Bureau of Motor Vehicle offices—were shut down after a budget had not been signed by July 1. The last time Maine’s government shutdown was a 16-day shutdown in 1991. The 2017 shutdown was resolved after three days. Maine’s legislative session was originally scheduled to end on June 21, but lawmakers voted to extend the 2017 legislative session by five days, not required to be concurrent. The cost of the five-day extension of the session was estimated to be $94,600.
• The key issue throughout much of Maine’s 2017 legislative session was a voter approved ballot measure called Question 2, which authorized an additional 3 percent tax on the portion of any household income exceeding $200,000 per year and earmarked the revenue to fund public education. The budget deal included the repeal of Question 2.
• See also: Maine State Legislature and Governor of Maine

New Jersey

• Trifecta status as of July 2017: Divided Government
• New Jersey's three-day partial government shutdown came to an end on July 4, 2017, after Gov. Chris Christie (R) signed a $34.7 billion state budget into law. The New Jersey government went into a partial shutdown on July 1, 2017, after Democratic leadership in the Legislature and Christie failed to reach an agreement over the budget by the start of the new fiscal year. New Jersey last experienced a partial government shutdown in 2006. The budget impasse in 2017 centered on a proposal by Christie to restructure Horizon Blue Cross Blue Shield, the state's largest health insurance company. Christie said he would not sign the budget, which included over $325 million in funding for Democratic priorities, unless it included the Horizon legislation. Both Christie and Senate President Stephen Sweeney (D) were in favor of including legislation in the state budget that would allow for more government oversight of the insurance provider. The legislation would have also required Horizon to dedicate its excess surplus to fund drug treatment programs. Assembly Speaker Vincent Prieto (D) opposed the legislation, arguing that it could increase premiums for Horizon's policyholders. Fearing that Christie might line-item veto Democratic-backed proposals in the budget if the Horizon legislation was not included, many members of the Legislature abstained from voting on the budget which led to the shutdown.

• On July 3, 2017, the Legislature and Christie reached an agreement to end the shutdown but the legislation was not signed until the early morning of June 4, 2017. The $34.7 billion budget included increased spending for education and healthcare and also established a cap on Horizon's reserves. Instead of the excess surplus going to fund drug treatment programs, the budget required the money to be used to limit future premium increases for Horizon's 3.8 million policyholders. The legislation also added two public members to Horizon's board.

• The Assembly voted 53-23 in favor of the budget, while the state Senate backed it 21-14.

• See also: New Jersey State Legislature and Governor of New Jersey

What factors keep lawmakers from agreeing on budgets?

Many factors can keep lawmakers from reaching agreements on budget deals. In some cases, partisan politics come into play and prevent either Democrats and Republicans within the legislative branch from striking a deal or a legislature and governor from reaching an agreement. In general, however, policy differences are at the heart of most major budget disputes, and significant policy issues—especially debates over taxation and spending—can even divide state governments that are controlled by a single party.

State government trifectas

See also: State government trifectas

The following maps display state government trifectas following the 2016 elections as well as trifectas leading up to the 2010, 2012, 2014, and 2016 elections. Use the buttons on the left to select a map.

State government trifectas, pre-2010

Learn more about Ballotpedia's analyses of trifectas and state governments

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Minority and coalition control of state legislative chambers

Historical and potential changes in trifectas

Trifectas and legislatively referred constitutional amendments

Who Runs the States Report

Party control of state government

See also

• State budget conflicts, 2017
• State budget and finance pages
• Total state government expenditures
• Glossary of state budget terms
• State credit ratings
• State legislative sessions
• State government trifectas

Footnotes