March 12, 2010—Issue 8

Governor Lays Out Budget Plan

Governor Pat Quinn presented his fiscal plan for 2011 in his annual budget message presented to a Joint Session of the General Assembly on Wednesday.  The plan calls for a reduction in General Funds spending on programs of about $2 billion (net of some increases) offset by increased costs associated with pension contributions of $400 million and debt service of $1 billion mostly associated with the borrowings in Fiscal year 2010 to pay the required pension contributions.  Total proposed spending is $32.1 billion compared to $32.6 billion in fiscal year 2010.  The fiscal year begins July 1^st.  General Fund revenue is expected to decline by $500 million largely attributed to the phase out of federal sources attributed to the stimulus program partially offset by an increase in state source revenues. 

Even with these actions the proposed budget requires borrowings of $ 4.7 billion.  There is no planned reduction in the accumulated deficit which is projected by the Governor to be close to $6 billion at the end of the June and will remain at that level through the 2011 fiscal year exclusive of the new borrowings. 

Major program spending reductions in the following areas were proposed by the Governor

            Elementary and Secondary Education                        $ 1.2 Billion (-14%)

            Higher Education                                                              .1 Billion (-5%)

            Local Government Revenue Sharing                                .3 Billion (-30%)

            Human Services                                                                .1 Billion  (-2%)

            Employee/Retiree Healthcare                                           .3 Billion (-30%)

Other program areas were reduced as well. There are planned increases in spending such as Medicaid ($ 600 million). 

There were no new revenues proposed, other than the normal growth from the existing tax base, presented in the formal budget documents.  The Governor did however, state in his message that a 1% increase in the state income tax could be used to forego the impact his budget would have in education funding cuts and could also pay down some of the backlog of bills that are owed to the state’s vendors, state universities and local governments.

Quiet Committee Deadline Week in the House

This week was Committee Deadline week in the House and the Revenue Committee passed only about eight bills out of the many posted for hearing on an “agreed roll call”.  All tax credit measures remained in sub-committee and only one TFI-Opposed bill passed out in the form of HB 5169, which will provide for a PTEL exemption to fund treatment and care expenses for mentally retarded and developmentally disabled citizens.  It should be noted that some House Bills will be granted “committee deadline extensions” and may still be heard in committee before the House 3^rd Reading Deadline on March 26^th.  In the Senate, the Revenue Committee did not meet this week and is not slated to meet next week as the Senate 3^rd Reading Deadline arrives next Friday March 19^th.  TFI will provide a complete update of all legislative action at next week’s 2010 Spring Legislative Conference in Springfield.

2010 TFI Spring Legislative Conference Next Week!

Please don’t forget to attend the 2010 TFI Spring Legislative Conference in Springfield next Tuesday March 16^th and Wednesday March 17^th at the Inn at 835.  Highlights include the Legislative Reception and Dinner on Tuesday night with keynote speaker and House Majority Leader Barbara Flynn Currie as well as a breakfast Legislative Update on Wednesday with TFI President Tom Johnson and special guest and GOP Gubernatorial Candidate Senator Bill Brady as well as a representative of Governor Pat Quinn’s campaign.   It is not too late to attend….for more details or to register, please call 217-522-6818.

TFI’s 2010 Spring Legislative Conference