Governor asks legislature for emergency budget
authority to hold back up to 8% of appropriated funds
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[November 19, 2008]
CHICAGO -- Citing the impact of the national economic crisis on
Illinois' revenues, Gov. Rod R. Blagojevich on Tuesday announced a
four-part plan to manage the state's $2 billion fiscal 2009 budget
The governor's proposed plan includes passage of the Emergency
Budget Act, which would give the governor and other constitutional
officers added authority to help them make additional cuts, a
request to Congress for increased federal stimulus aid, and further
administrative reductions in the agencies. In addition to these
budget solutions, the governor is also proposing short-term
borrowing that will help manage the state's cash flow and pay
providers in a more timely manner.
"Today we have more difficult decisions to make. Illinois'
finances, like many other states across the nation, have felt
consequences of the poor national economy. And like a family who has
seen their income cut dramatically, we need to take fiscally
responsible action to ensure the state can pay all of our bills and
provide the core services that Illinoisans need," Blagojevich said.
Illinois is not alone in facing a fiscal 2009 budget shortfall
due to lower-than-projected revenues. On Monday, the New York Times
reported that California faces an $11 billion shortfall and is
concerned about paying bills this spring; New York has proposed $5.2
billion in "savings"; and Ohio may need a federal loan to cover
unemployment costs. In total, 31 states and the District of Columbia
are facing midyear budget gaps, according to the Center on Budget
and Policy Priorities.
The governor's plan includes the following components:
Continued belt tightening -- The governor has already taken
fiscally responsible steps by reducing the fiscal 2009 budget passed
by the General Assembly by $1.4 billion, ordering all agencies to
reduce spending by 3 percent, reducing the cost of core services and
decreasing head count. The state will continue to find efficiencies
and savings in the agencies through further reserves and spending
freezes, while still providing Illinoisans with core services.
Emergency Budget Act -- The governor will propose legislation
to give him the authority to hold back in contingency reserve as
much as 8 percent of total appropriation and distributions for all
spending from general funds, including agencies under the governor,
the State Board of Education, higher education, state's pension
funds and funding to local governments. In addition to the rights
granted the governor, the Emergency Budget Act provides similar
powers and responsibilities to the lieutenant governor, attorney
general, secretary of state, comptroller and treasurer with respect
to each constitutional officer's own budget.
Increased federal stimulus -- Blagojevich has written to the
congressional leadership, detailing the effects that the poor
economic condition has had on Illinois. The letter focuses on the
areas that the state has identified where there has been the
greatest impact, and it requests more than $1 billion annually over
the next three years. An infusion of federal dollars would not only
help to alleviate the projected revenue shortfall for fiscal 2009,
but also help Illinois stabilize its weakening economy by putting
dollars into the hands of consumers, investing in infrastructure and
ensuring the state can pay its bills in a more timely manner.
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The letter to congressional leaders asked for assistance in
promoting President-elect Barack Obama's stimulus agenda by:
Stimulating consumer spending with dollars for programs like Low
Income Home Energy Assistance Program; Special Supplemental
Nutrition Program for Women, Infants and Children;
Temporary Assistance for Needy Families
cash assistance; and
the extension of unemployment insurance benefits -- all of which
will have an immediate effect on the lives of Illinois residents and
will stimulate the economy.
Investing in infrastructure and create good-paying construction
Protecting state services with direct cash assistance, as well as
a temporary increase in the federal medical assistance percentage,
the federal share of the Medicaid health care program.
Short-term borrowing -- While short-term borrowing will not
solve the budget deficit, the state needs to pay vendors on time and
manage the state's uneven cash flow. The governor, the comptroller
and the treasurer are currently working together on the borrowing
plan. In May 2003, the state borrowed $1.5 billion to pay Medicaid
assistance, medical providers of long-term care, the refund fund and
state aid payments to K-12 schools. Short-term borrowing has been
used in other years since to manage cash flow and ensure the state's
payment obligations are met in a timely manner.
"While I am dedicated to ending the year with a budget that
works, I know I cannot do this alone," the governor said. "I am
asking for support from state legislators and constitutional
officers to help manage this budget in a way that continues to
provide the services and programs that Illinois families need."
[Text from file received from
Illinois Office of
Communication and Information]