Hynes fears 'unimaginable consequences' from $9 billion deficit

SPRINGFIELD - Illinois is teetering on insolvency with "unimaginable consequences" for schools, nursing homes and health care providers in the suburbs and statewide, warned state Comptroller Dan Hynes on Wednesday.

The state's top fiscal officer said Illinois is nearly $9 billion in the hole due to years of neglect and mismanagement by ousted Gov. Rod Blagojevich and the imprisoned former Gov. George Ryan, now colliding with a national recession.

"Our previous two governors chose to ignore these things, told us things were good when they weren't and just glossed over the fact that the state of Illinois has a mulitbillion-dollar structural deficit that has lasted for many years," he said.

The deficit constitutes about one-third of an about $30 billion state budget for day-to-day operations.

Hynes' report, delivered to Gov. Pat Quinn and other state officials, was a sobering blow as lawmakers returned to the Capitol for the first session day since Blagojevich was kicked out of office last week after his impeachment conviction in the Illinois Senate.

The pending budget hole had already been projected to be as much as $5 billion. But Hynes said the state has for years neglected billions of dollars' worth of bills, annually carrying a huge backlog over from one budget year to the next because there's not enough money to pay it.

"The bottom line is the state of Illinois in next year's budget is facing a $9 billion deficit. That is unprecedented. It dwarfs any previous budget ever faced by a governor and essentially shows just how bad things have gotten."

For perspective, the potential deficit is more than Illinois spends on K-12 public education statewide in a year.

"Without a major infusion of cash from borrowing or another source, the state will be virtually insolvent," Hynes said.

If the state ever did go insolvent, the funding for programs that help pay for things like education and health care would essentially disappear.

How Illinois digs itself out of the hole is the biggest political hurdle facing Quinn and state lawmakers this year.

With only a few days as governor under his belt, Quinn has yet to offer any budget-fixing details. He's asked to move his budget speech back a month to March 18 to work on the problem.

"We are going to be looking at all the nooks and crannies in state government and tighten our belts where possible," he said Wednesday, emerging from a closed-door meeting with legislative leaders to answer reporters' questions.

Quinn and other state officials warned for months that the state's fiscal situation was reaching dire levels because of years of shortfalls covered by one-time gimmicks and a tanking economy that is sapping tax dollars. Quinn and other top lawmakers have not ruled out tax increases and Treasurer Alexi Giannoulias recently said he doesn't see a way they could be avoided.

Republicans, long relegated to the political minority at the Capitol, made it clear they expect the Democratic leaders who presided over recent budget disasters to lead the way on fixing this one.

"In this economy, to be looking at an income or sales tax would be a huge disservice to Illinois voters who are trying to get by on just living day-by-day," said House Republican leader Tom Cross of Oswego.

At the same time, he acknowledged the difficulty in cutting that much from the state budget.

"The types of cuts you would need to get out of 'it' would be extremely drastic, but I think you need to look at cuts, and I think you need to look at running government more efficiently," he said. "I think to just say, 'All right, we've got a hole and we need to go raise more money to get out of the hole' and then have at the end of the day more money to keep doing what we're doing, doesn't do anybody any good."

• Daily Herald staff writer Nicole Milstead contributed to this report.

A $9 billion deficit means

• It's more than the $7.6 billion proposed in the state school board's general funds budget for all of fiscal 2010.

• It's five times the $1.8 billion for which the city of Chicago leased the Skyway for 99 years.

• It's 10 times what it reportedly cost to buy the Chicago Cubs.

• With a total population of about 12.5 million, it's $720 for every man, woman and child in Illinois.