Budget Crisis Looming Again...Should we send our Legislators back to an Econ 101 Class?

When are the people of Illinois going to finally wake up and demand a government that works? The state budget (or lack of one) is beginning to become a major obstacle to the progress of this state. The Democrats brilliant idea now is to stop making payments that the state owes for Medicaid and to "transfer" i.e steal money from other restricted accounts to plug the hole in the budget. Here's a good idea to anyone listening: How about showing a modicum of fiscal restraint and not spending more money than we have?

I'm sorry, but if a family in Illinois doesn't feel like they have enough money they can't just decide they are not going to pay their bills. Why are we giving the state a free pass here? The Democrats have turned Illinois into a "deadbeat state" and are doing the government equilvilent of using the state's 401-K to go on a shopping spree at the mall. Does this make any sense?

Illinois budget in a hole, next fiscal plan in flux
Gov. Rod Blagojevich, legislators tussle over $750 million shortfall

By David Mendell
Tribune reporter
9:17 PM CDT, May 4, 2008
Now that Democratic Gov. Rod Blagojevich has fended off an effort to allow him to be recalled from office, his administration is turning to another feud the governor historically has found himself engaged in with lawmakers: the state budget.

As the governor's aides work on next year's budget, they also are trying to figure out how to close what they estimate is a $750 million hole remaining in this year's budget, which ends June 30.

The shortfall, which Illinois Senate budget officials believe is closer to $395 million, largely results from overly optimistic projections during a weakening economy, a situation now faced by many states.

For weeks the governor had threatened to squeeze some programs and de-fund grants in hopes that the legislature would provide a boost in revenue or approve a series of fund transfers to close the gap.

Last week, however, Blagojevich released money for 4-H programs and soil and conservation districts as state senators were considering a measure asking voters to allow recall of public officials from office. The push for recall was aimed at Blagojevich, sponsors said, but the administration said the money's release was not tied to the recall effort.

All of which leaves the governor still looking at a mix of options to erase the $750 million shortfall: delaying Medicaid payments, holding back advance payments to school systems statewide, holding back operating-expense payments for colleges and transferring money from other funds that have not been drawn down.

Of these, the fund transfers would provide the most cash.

The Senate already has passed a $530 million fund-transfer package, but the House has yet to take action on the bill.

House lawmakers, whose bitter budget war with Blagojevich last year remains a backdrop, have been irritated with the governor's budget-making ever since he cut legislators' special projects last year.

Some lawmakers blame the governor for increasing money for his own initiatives, particularly an expansion of health-care coverage, while he derides lawmakers for not tightening their belts.

"It's irresponsible stewardship and just bad governance," said state Sen. Christine Radogno (R-Lemont). "He doesn't understand the budget and he doesn't understand the numbers. When you don't have any money, you can't expand programs. That's just logic."

Blagojevich's aides, however, blame the General Assembly for approving a budget that was overly optimistic in revenue projections. They noted that the state finds itself in this budget hole even after the governor vetoed $463 million in lawmakers' projects—mostly those of House Democrats and Senate Republicans who opposed Blagojevich's agenda.

The governor's aides argued that his current-year health-care expansion cost less than $20 million and that this fiscal crisis partially stems from lawmakers being too focused on politics while the state's fiscal woes go unattended. As evidence, they pointed to $180 million in supplemental spending that the legislature has passed in recent months.

"It's not an extreme problem unless it remains unaddressed," said Sheila Nix, Blagojevich's deputy governor. "This is a problem that can be fixed, but we need to get beyond the political distractions to solve it."

But getting beyond those "distractions" has proved to be a challenge amid the highly charged atmosphere of Springfield.

A spokesman for House Speaker Michael Madigan (D-Chicago) said there is little support in that legislative chamber for Blagojevich's fund-transfer plan.

"I have not seen anybody rush to say that this is a good idea," Madigan spokesman Steve Brown said Friday. "There are a variety of other alternatives that they could look at if they wanted to."

As one option, Brown suggested taking whatever remains of the $463 million in member projects that Blagojevich vetoed from the 2008 budget—perhaps $125 million—and paying down the backlog of Medicaid bills. That would spur an infusion of matching money from the federal government, Brown said.

With such opposing views, it's uncertain how this budget drama will conclude.

Legislators are four weeks from their spring adjournment deadline, and they must come together with solutions for the problems of the current fiscal year as they grapple with passing a budget for the one that begins July 1.

"We've been talking about this since February, and nobody has really been listening," said Kelley Quinn, a spokeswoman for Blagojevich's Office of Management and Budget. "But June 30 isn't going away."