CBS

Illinois Has Nation's Largest Budget Deficit

Study Says Deficits For All States Together Will Total $83.9 Billion Next Year

Wednesday, July 28, 2010

NEW YORK (CBS) ― Illinois has the largest budgetdeficit in the nation this year, according to a new study.

The study released Tuesday by the National Conference of State Legislators also said all the states together will have a shortfall of $83.9 billion for fiscal year 2011, MarketWatch reported.

As of the present time, seven states are projecting deficits for the end of fiscal year 2010,and Illinois has the biggest, according to MarketWatch. Following Illinois are Oregon, Michigan, Kansas, Washington state, Pennsylvania, and South Carolina, the report said.

At the start of the month, Gov. Pat Quinn passed a budget that cut 5.3 percent in spending. In the budget, schools took a $241 million hit, universities lost $100 million, and spending on human services fell by $312 million. And those cuts didn't come close to erasing the state's $13 billion deficit, which is the largest in Illinois history.

Quinn had wanted to raise income taxes to help close the budget gap, but state legislators ignored him.

Economists say public budget cuts threaten to limit the recovery of the national economy , MarketWatch reported.

The study used complete or partial information for 49 states. Only partial information was available for the study from the states of California, Florida and New York, MarketWatch reported.

The study also projected the staggering shortfall for all the states' budgets combined for next year, but the estimate was slightly lower than one issued in March, which projected an $89 billion deficit, MarketWatch reported.

The biggest shortfall may be from cuts in federal aid for medical programs, MarketWatch reported.