Ill. Gov. Quinn suggests $2B in budget cuts, still looking at income tax increase

Ill. Gov. Quinn considers $2B in budget cuts

SPRINGFIELD, Ill. — Administration officials warned Wednesday that Gov. Pat Quinn would have to cut spending more than $2 billion, or 8 percent, next year — while the recession increases the need for state services — unless he finds new money.

Quinn’s office launched a Web site that lays out Illinois’ dire economic situation, seeking taxpayers’ input on fixing the fiscal mess two weeks before the Democrat unveils his budget plan for the coming year.

It suggests a needed $2.2 billion cut in spending — mostly in elementary and secondary education, where funding would drop 15 percent even as school districts are already struggling with late state payments.

Even then, Illinois would end the 2011 fiscal year with an $11.5 billion deficit.

The state’s budget director, David Vaught, introduced the budget Web site, where taxpayers can make suggestions, and reiterated Quinn’s support for an election-year income tax increase, which could generate $3 billion to $5 billion.

“Absent other action, these are the kind of figures we’re going to have to deal with,” Vaught said. “I’m sure we’ll hear more from the governor. He’s no shrinking violet on the need for a tax increase.”

That idea, which Quinn repeated as recently as Monday, got a continued cool reception from powerful House Speaker Michael Madigan, who says there’s not enough support from his Democratic majority for a tax hike, and he can’t count on “nonparticipating dropout” Republicans to lend a hand.

But the governor, who will release his spending plan March 10, also plans to pursue continued federal funding; borrowing, particularly to pay a monster state workers’ pension debt; or some other idea suggested among the hundreds of comments the Web site already had Wednesday afternoon.

“What we want people to do, besides feeling the pain and understanding the reality, is to help us find a solution,” Vaught said.

The solutions are tougher without federal stimulus money, a short-term funding fix from Washington that Vaught expects to drop $1.4 billion, or 77 percent, from this year, including $922 million in K-12 education alone.

Vaught said Quinn joined other governors last week in Washington to ask Congress to extend enhanced federal matching dollars for health care costs, which are scheduled to end halfway through the next fiscal year.

The cuts in school funding would be deep and wide, affecting general state school aid, which is already late getting to districts; funding for other services, such as special education and transportation; and grants for classroom initiatives.

The sorry state of pension funding would worsen without putting $4.1 billion into retirement systems next year — a payment equal to 15 percent of all spending money available. Quinn and lawmakers borrowed $3.5 billion to pay pension debt this year and Vaught said that is an option again.

The biggest revenue bounce would come from an income tax increase. The Senate approved one last year, but Madigan would not commit to calling a House vote when asked earlier Wednesday.

He pointed out that only about three-fifths of Democrats supported Quinn’s tax plan last year — a year when lawmakers did not have to face voters, as they will in November. He rebuffed suggestions that he, speaker for all but two of the past 27 years, could garner the support necessary and blamed Republicans, who refuse to put votes on a tax increase plan prior to serious cuts.

“The Republican Party in Illinois has made an election campaign decision to be nonparticipating dropouts,” Madigan said.

The GOP congratulated Quinn for “taking steps to listen to Illinoisans” but challenged him to heed their advice.

“Only when the voters are confident our state government can be trusted to spend their taxpayer dollars,” Illinois Republican Party Chairman Pat Brady said, “should we start talking about increasing taxes.”

On the Net: www.budget.illinois.gov

Associated Press Writer Deanna Bellandi in Chicago contributed to this report.