CHICAGO (AP) — Illinois' budget deficit could surpass $9 billion, according to estimates in a report released Monday that criticizes Gov. Pat Quinn for artificially inflating the amount of money the state has to spend and contributing to an unbalanced budget that pushes the state's problems into the future.
The Civic Federation said Quinn's proposed budget
did not account for $971 million that the state should set aside to pay for
anticipated income tax refunds and to clear a backlog of refunds to businesses
that dates to 2008. That accounts for about $2.4 billion of the anticipated
budget deficit in fiscal year 2012 when combined with a $1.45 billion budget
gap caused by proposed new spending, the report said.
The rest of the deficit comes from $4.6 billion in
unpaid bills and $2.4 billion in Medicaid and insurance obligations — for a
total estimated deficit of $9.4 billion.
The exact size of the deficit has been difficult to
pin down. It was estimated at around $15 billion before legislators passed a 66
percent temporary personal income tax increase and a separate corporate rate
increase.
The report also criticized Quinn's plan borrow
money to help close the budget shortfall, reduce the refund backlog and pay
Medicaid and employee health insurance claims, saying it could cost taxpayers
up to $4 billion in interest over the next 15 years and worsen the state's
financial condition.
Phone and email messages left with a governor's
spokeswoman and a budget office spokeswoman on Sunday afternoon, before the
report was released, were not immediately returned.
But Quinn last week defended his plan, despite
widespread criticism of its $1.7 billion in additional spending, saying "I
think it's the best budget."
But Msall said it is the responsibility of
lawmakers to identify things in the budget that should be reduced or eliminated
to meet the constitutional requirement of a balanced budget and prevent an
"enormous negative impact" on the state's finances and credit rating.
The report urged lawmakers to reject Quinn's
spending increases and borrowing plans "and rely instead on budgetary
restraint to honor its commitments to vendors, local governments and
taxpayers."
But it already seems unlikely that lawmakers would
adopt Quinn's budget.
Democrats in the Illinois Senate began passing a
budget last week, using revenue projections rejected by the governor and the
Democratic House. They said the plan would be responsible and affordable but
did not release details, including cost to taxpayers. Republicans said the
proposal wouldn't cut spending nearly enough but didn't introduce their own
legislation.
Democrats indicate they would soften some specific
cuts proposed by Quinn — for instance, reducing Medicaid rates by 3 percent
instead of the governor's 5 percent — while imposing broad operations cuts at
many agencies.
Democratic lawmakers approved an income tax
increase earlier this year that is supposed to be temporary. It has helped
bring the state closer to matching revenues and expenses, but Illinois
government still has about $8 billion in overdue bills and obligations it must
pay.
Copyright 2011 The Associated Press.
