 Even with higher income taxes, Illinois won't have enough money to
pay all its expenses for the coming year, let alone cover the
billions in old bills that have been allowed to pile up.When
Quinn delivers his budget proposal Wednesday, he's likely to call
for significant spending cuts in some areas. He will undoubtedly
renew his call for borrowing $8.7 billion to pay old bills. And a
document from his budget office indicates he wants to take another
try at raising cigarette taxes.
Quinn has largely stayed out of sight in the run-up to his budget
address, but in an appearance Friday the Chicago Democrat talked
about the importance of money for education, health care and public
safety. At the same time, he warned Illinois must be "very, very
frugal."
State budget director David Vaught said Quinn will make it clear
that raising taxes by two-thirds did not solve Illinois' budget
problems.
"The General Assembly and the public will see the spending
pressures," Vaught said in an interview with The Associated Press
last week. "They'll see where we plan to spend and where we don't.
We'll make clear not just that we're saying no, but why we're saying
no."
The Quinn administration has been studying possible cuts to human
services -- cuts that advocates for the poor describe as draconian.
"We're terrified," said Maria Whelan, president of Illinois
Action for Children. "Our hope is the pain will be shared and the
most vulnerable people in our state do not bear the brunt."
State employees and retirees may also be targeted, if not by
Quinn, then by the Legislature.
House Speaker Michael Madigan, D-Chicago, recently warned
lawmakers of tough decisions that lie ahead and even suggested
cutting pension benefits for current state employees, a move
generally considered unconstitutional.
"If you come here and you don't want to cast a difficult vote,
well, you ought to go back home and give the job to somebody else,"
Madigan said.
It's not clear just how big a deficit Illinois faces in the
budget year that starts July 1. The Quinn administration has avoided
direct answers to that question.
A three-year budget outline from Quinn's office shows he's
counting on some revenue measures that haven't been approved yet,
notably a $330 million increase in cigarette taxes.
A review of the document suggests a gap of more than $3 billion
between income and expenses in the coming year. On top of that, the
state owes about $8.7 billion to groups that provide services on
government's behalf, to corporations waiting for tax refunds and to
the program that provides medical care for government employees.
So the total deficit could top $12 billion. That's one-third of
state government's total spending from general funds.
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Quinn and Democratic legislative leaders want to borrow money to
pay the overdue bills quickly. They argue it's more responsible for
government to take on the debt directly rather than borrowing it
unofficially by simply not paying what it owes.
Republicans generally oppose the idea, but Quinn has been trying
to build public support. He has set up a website promoting the plan
-- which he calls debt restructuring instead of borrowing -- and is
urging vendors to demand their money.
The budget outline also counts on federal aid remaining steady
even though the economic stimulus program that has propped up state
budgets is ending. It's not clear how Quinn expects to avoid a
drop-off that would further add to the deficit.
Vaught made the task of balancing the budget sound like playing a
Whac-a-Mole game. Officials reduce employee costs, but pension
expenses jump. They cut drug-addiction treatment, yet medical costs
keep climbing.
"If you push it down over here, it pops up over there," Vaught
said.
Quinn's latest budget will include a new wrinkle: a cap on
spending.
The law that raised Illinois income taxes to 5 percent, up from 3
percent, also set a specific limit on how much money the state can
spend in each of the next three years.
The cap for the first year includes plenty of room for spending
the roughly $7 billion the higher taxes should generate, but later
years could see more pain. Rising expenses are likely to bump up
against the limits, forcing cuts in discretionary spending.
Vaught said Illinois must seize what he calls a "great
opportunity."
The tax increase will bring in much-needed cash, he said, and
borrowing to pay old bills would resolve a nagging problem.
Together, the two measures will get state government out of crisis
mode.
"They give you a fresh start," Vaught said.
[Associated Press;
By CHRISTOPHER WILLS]
Copyright 2011 The Associated Press. All rights reserved. This
material may not be published, broadcast, rewritten or
redistributed.
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