Illinois Governor to Deliver Grim Budget Proposal

While some states are increasing their spending levels for the first time since the recession began, Illinois Governor Pat Quinn will be presenting a much less optimistic scenario when he unveils his fiscal 2013 budget on Wednesday. Quinn, a Democrat, will call for the closure of several state facilities, including a “supermax” prison that opened in 1995, and reduce spending at state agencies by 9 percent.

Illinois is teetering financially because of two stubborn problems: an enormous backlog of unpaid bills and the escalating cost of meeting its pension obligations. The state passed a major tax increase last year, but the new money it generated is going almost entirely to paying off Illinois’ pension debt.

This year, the Chicago Tribune reports, Illinois expects revenues to increase by $700 million. But its pension costs alone will increase by $1 billion. “There’s no new money for anything else,” Quinn’s budget director, David Vaught, told the paper. “That’s the squeeze.”

To close the gap, Quinn will ask lawmakers to close two prisons and a dozen other facilities. The closures would likely lead to the early release of as many as 1,000 prisoners, a union of state workers told the Chicago Sun-Times.

Few groups that rely on state funding will see good news. Money for schools will remain relatively flat. “Everything but Medicaid and pensions will be squeezed,” Vaught told reporters, according to Illinois Statehouse News

Even though the specifics are grim, Quinn’s budget outline leaves out some key details. “In two areas that pose a suffocating multibillion-dollar burden on the state budget — sky-rocketing Medicaid and state pension costs,” the Sun-Times writes, “the governor won’t propose anything specific to lawmakers, aides told reporters in a Tuesday evening budget briefing.