 "We've made a lot of progress for people. But make no mistake about
it -- these are tough times," said Blagojevich. "And when times are
tough, I believe the best way to fight for families and fight for
people is to focus on strengthening the economy."
Highlights of the governor's fiscal 2009 budget include:
-
Illinois Works --
a $25 billion capital plan that will support more than 700,000
jobs and fix the state's deteriorating roads and bridges, build
and repair schools across the state, and provide resources for
statewide economic development.
-
Illinois child tax
credit -- a refundable state tax credit that will double the
child portion of the recently passed federal economic stimulus
plan. This will be a one-time tax credit of $300 per child for
all Illinois taxpayers who qualify for the federal plan.
Approximately 1.3 million families (3 million children) will
benefit.
-
Illinois Business
Tax Cut -- a 20 percent break for businesses that paid corporate
income tax in Illinois for 2007. To be eligible, employers must
maintain their employment levels. This $300 million tax cut will
create business investment and development and provide job
security for employees.
-
Pension funding
reform by refinancing high-interest pension debt into
low-interest pension obligation bonds, to immediately add $16
billion in assets to the state pension funds and save the state
$55 billion over the next 36 years. The pension reform will also
immediately increase the funded ratio from 63 percent to 75
percent.
-
Across-the-board
spending reductions in all areas outside of health care,
education and public safety.
-
Continued funding for schools and
health care, with the goal of passing Illinois Covered and
providing affordable health care for all state residents.
Schools will receive an additional $300 million, while the state
will continue to fund health care expansions such as the
FamilyCare expansion, All Kids Bridge, and free breast and
cervical cancer screenings and treatment for all uninsured
women.
"The economy is about interest rates, inflation rates, the
velocity of money and subprime mortgages. It's about the balance of
trade and taxes, fiscal and monetary policy, the unemployment rate
and more. But, what it really comes down to is families and their
economy. Today, as we focus on what I believe we must do to
strengthen the economy, we must never lose sight of the fact that it
is all about families and our ability to help them build a better,
more secure life," the governor said.
Blagojevich called his fiscal 2009
budget a "comprehensive approach to the economy" that focuses on
three goals:
"If we make the tough choices elsewhere in our $58 billion
budget, we can do these things and strengthen our economy, and we
should do it now," Blagojevich said to the joint session of the
General Assembly.
Illinois Works
This $25 billion capital program provides access to capital in
communities throughout the state to stimulate job growth and the
Illinois economy. The fiscal '09 budget includes funding for a
capital construction plan to build critically needed schools, build
and improve roads, repair bridges, improve public transit and
airports, protect natural resources, and provide access to capital
for economic development, affordable housing and community health
centers throughout the state.
This plan will support more than 700,000 jobs and strengthen the
economy.
"I like the idea of a capital bill of the size and scope I am
proposing because first and foremost, it means that we will put more
than 700,000 people to work," Blagojevich said. "There are bridges
across Illinois that desperately need to be fixed. There are bridges
that need to be built. There are roads in each of your districts
that need to be repaired. And there are too many of our
schoolchildren trying to learn their lessons in classrooms that are
overcrowded or going to school in buildings that are old and
crumbling, and not good places to learn. Let's build them good
places to learn."
The governor's capital plan includes:
-
$14.4 billion for
road and bridge programs.
-
$3.8 billion for school construction.
-
$2.7 billion for public transit.
-
$1.1 billion for higher education.
-
$1.1 billion for environment, energy and technology.
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$1.0 billion for economic development, including housing.
-
$600 million for improved and expanded state facilities.
-
$500 million for airports and rail.
[to top of second column] |
 Illinois Works would be funded primarily through partial
concession of the Illinois Lottery. While most capital programs are
funded by issuance of debt, Illinois Works funds nearly 65 percent
of its projects from pay-as-you-go sources. Only 35 percent of the
program is bond-funded. In fiscal 2007 and fiscal 2008, Illinois
reduced bonded debt by $1 billion, the first time since 1997 that
outstanding debt has been reduced for two consecutive years.
Illinois child tax credit
This refundable tax credit will double the child portion of the
recently passed federal economic stimulus plan. It will be a
one-time, refundable tax credit of $300 per child for all Illinois
taxpayers who qualify for the federal plan. To be eligible, you
must:
-
Have a dependent under age 18 at the end of this year.
-
Earn at least $3,000 a year through earned income, unemployment
or Social Security.
-
Have income less than $75,000 annually for an individual,
$150,000 for joint filers.
"Doubling the tax credit would give parents a little more money
to pay for the things their kids need now, and, maybe have a little
left over to invest in their kids' future," Blagojevich said.
Illinois business tax cut
This 20 percent tax cut is for Illinois businesses that paid or
owe corporate income tax for 2007. To qualify, businesses must:
"When times are tough, it's hard for businesses to keep people on
their payroll," the governor said. "Cutting taxes on those
businesses will allow them to invest more, stimulate the economy,
keep people working and put more people to work."
The state would use a securitization as a one-time revenue source
to fund the economic stimulus package. The securitization would
allow the state to issue bonds backed by state revenue sources like
tobacco settlement payments. Securitization will transfer the risk
of a revenue decline to another party. The state would receive cash
upfront, rather than an annuity spread over several years.
Currently, 18 states have completed securitizations. The state of
Ohio will use the $5.1 billion it received in October from
securitization on school construction and a property tax cut.
California is using $1.25 billion netted from securitization on
school construction and infrastructure projects.
Internal efficiency
To give families more of their money back, Blagojevich proposed
across-the-board cuts in state government, with the exception of
health care, education and public safety activities.
"By cutting spending and eliminating pork, we can afford to give
the people more of their money back and afford to cut taxes on
businesses. If we manage our budget in tough but clear-eyed ways, we
can move, and move quickly, on strengthening our economy. And by
strengthening our economy, we also strengthen our state budget," the
governor said.
The governor will also consolidate more administrative functions,
reduce leased space, offer a new early retirement program and close
unnecessary facilities. He also proposed to restructure the state's
pension system with a plan that will immediately add assets to the
pension funds.
With the recent cuts in the federal interest rate, the state can
take advantage of favorable interest rates to refinance the
high-interest pension debt into low-interest pension obligation
bonds. The state took advantage of record-low rates in 2003 has
already saved the state $33 billion.
Today's interest rates are comparable to those in 2003.
Refinancing the debt now will immediately add $16 billion in assets
to the state pension funds and save the state $55 billion over the
next 36 years. It will also increase the funded ratio to 75 percent
from 63 percent and resolve the problem of pension underfunding.
Blagojevich urged the General Assembly to act quickly on the
budget.
"The economy needs our attention," he said. "Time marches on, and
unless we act, a recession will deepen, the hurt will spread and
real people will pay the price. It is time to strengthen our
economy."
For more information on Blagojevich's fiscal 2009 budget
proposal, visit www.illinois.gov/gov/budgetaddress/.
[Text from file received from
the
Illinois Office of
Communication and Information] |
