Governor warns of deep cuts

SPRINGFIELD -- Gov. Rod Blagojevich is warning state agency heads, university presidents and social service groups that severe cuts await if lawmakers don't quickly address a nearly $2 billion budget deficit.

Blagojevich's letter, which surfaced Friday, warns of hiring and spending freezes, draining down budget reserves and "eliminating programs or functions that do not address key priorities of the state."

A Blagojevich budget aide said the letter is a "head's up" to those who rely on state dollars that "they need to start taking steps now."

The state's budget year runs out June 30. The budget for the fiscal year that begins July 1 includes, by some estimates, more than $2 billion in spending that can't be supported.

More Coverage The Full Reports Governor's letter

"Two billion dollars is a tremendous amount," said budget office spokeswoman Kelley Quinn.

The total state operating budget is $59.2 billion.

A $16 billion pension borrowing plan that would greatly reduce the size of the next pension payment was approved by the Senate but never voted on in the House. That was also the case for a proposal to sweep away and spend nearly $500 million set aside in special, protected state accounts.

Blagojevich is also calling on approval of gambling expansion and a lottery lease deal to pay for a $34 billion construction spending plan that would free up money to balance state spending.

House Speaker Michael Madigan, a Chicago Democrat, has said the governor should use the powers of his office to manage the budget. That would mean the governor would veto spending to make ends meet.

Politically, it means the governor would likely take the blame for such cuts.

In his letter, Blagojevich lays the responsibility back on lawmakers and says he'll have no choice if they don't come to a balanced agreement.

Steve Brown, Madigan's spokesman, said House Democrats have been trying to focus on the state budget but, before this letter, the governor had been consumed with the construction plan.

"That's what we've been asking (that) he do -- focus on the budget," Brown said.

David Dring, spokesman for House Republican leader Tom Cross of Oswego, criticized Democratic leaders for letting the state slip into this condition.

"I think it just shows there are real consequences to passing budgets that don't add up," Dring said.