Quinn To Announce Plans For Huge Ill. Budget Gap

Thursday, July 01, 2010

SPRINGFIELD, Ill. (AP) ― Illinois legislators stuck Gov. Pat Quinn with the task of managing the worst budget crisis in state history, and now he's about to reveal what he plans to do.
Quinn is slated to announce Thursday, the first day of the state's new fiscal year, where he'll cut spending, borrow money and delay bills to keep state government afloat.
"There are some tough decisions and there will be cuts," Quinn said earlier this week. "We're going to have to tighten the belt as tight as it can be."
The Chicago Democrat also may use the occasion to pressure lawmakers to return to Springfield and approve borrowing about $4 billion to make the state's annual contributions to government pension systems. Without permission to borrow the money, Quinn will have to find it elsewhere, meaning deeper cuts throughout the budget.
Quinn argues borrowing is the best of a bunch of bad choices, but Republicans in the state Senate are blocking the legislation.
Illinois is expected to see a roughly $7 billion gap between likely income and expenses in the coming year. Add in unpaid bills from the previous year and Illinois has a total deficit of about $13 billion.
That shortfall equals half the budget's general funds, where state officials have broad authority to raise or lower spending.
Quinn proposed raising income taxes to help reduce that gap, but legislators ignored the idea. He pushed to borrow money by selling bonds, but that failed too. Lawmakers did give Quinn permission to take $1 billion from special funds supported by fees, with a promise to repay the money later.

Rather than spell out which programs will get money and which won't, legislators opted to approve large lump sums and give Quinn the power to decide how it's spent. With money scarce, that inevitably means he'll have to cut somewhere.

Quinn also could allow even more of the state's bills — for services such as day-care for poor families and aid for the disabled — to pile up unpaid until next year.

Quinn's office would say little Wednesday about what the governor planned to do. Even the amount of money Quinn has to chop was kept quiet.

Earlier, Quinn said he would try to spare key areas of the government, which also happen to be where much of the spending takes place.

"The decisions I'm making right now are designed to definitely make sure we protect our education as much as humanly possible, that we maintain our health care safety net for everyday people and then also make sure we have good public safety," he said.