[il-talk] Fw: Gov Blagojevich Announces Plan to Manage Fiscal Year2009 Budget Deficit

[Bill Reif]

Here is the non-governing Governor's Press Release regarding the 
considerable budget defisit.  Note his continued use of the term "core 
services", which he defines to include education, public safety, and health 
care.  I guess he intends to use this crisis, largely of his own making, as 
justification to give himself and other constitutional oficers, to 
negatively effect budgetary priorities without legislative discussion or 
oversight.  the budget "emergency", while real, seems to me to require that 
more people, not fewer, are part of the process of making these painful 
decisions.  We already know this governor does not hesitate to spend "found 
money" cut or raided from one budget item to increase spending on his pet 
projects, all without legislative approval.  I would hate to see our 
legislators get scared into letting him exercise authority they should be 
exercising themselves as our representatives.

Bill Reif



Sent: Tuesday, November 18, 2008 2:07 PM
Subject: Gov rel: Gov Blagojevich Announces Plan to Manage Fiscal Year2009 
Budget Deficit


Governor Blagojevich Announces Plan to Manage Fiscal Year 2009 Budget
Deficit

$2 billion deficit to be eliminated by emergency budget powers,
increased federal stimulus, and further administrative reductions

CHICAGO - Citing the impact of the national economic crisis on
Illinois' revenues, Governor Rod R. Blagojevich today announced a
four-part plan to manage the State's $2 billion fiscal year 2009 budget
deficit.

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 state agencies. In addition to these budget solutions,
the Governor is also proposing short-term borrowing which will help
manage the State's cash flow and pay providers in a more timely matter.

"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," said Governor Blagojevich.

Illinois is not alone in facing a FY09 budget shortfall due to lower
than projected revenues. Yesterday, 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 mid-year 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 FY09 budget passed by the General
Assembly by $1.4 billion, ordering all agencies to reduce spending by
3%, reducing the cost of core services, and decreasing headcount. 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 General Fund
spending, including agencies under the Governor, the State Board of
Education, higher education, state 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 - Today Governor Blagojevich will send a
letter to U.S. 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 with the greatest impact and
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 year 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.

The letter to congressional leaders asked for assistance to promoting
President-Elect Barack Obama's stimulus agenda by:

*stimulating consumer spending with dollars for programs like Low
Income Home Energy Assistance Program (LIHEAP), Special Supplemental
Nutrition Program for Women, Infants, and Children (WIC), Temporary
Assistance for Needy Families (TANF) cash assistance and the extension
of Unemployment Insurance benefits - all which will have an immediate
impact on the lives of our residents will stimulate the economy,
*investing in infrastructure and create good paying construction jobs,
and
*protecting state services with direct cash assistance, as well as a
temporary increase in the Federal Medical Assistance Percentage (FMAP),
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, 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
timely.

"While I am dedicated to ending the year with a budget that works, I
know I cannot do this alone. 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," continued Governor Blagojevich.

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