Quinn plans to cut state budget to 2008 levels

Gov. Pat Quinn warned Monday that he will propose slashing government spending to its lowest level in years in a budget plan that his office says will still include a tiny increase for education and an attempt to chip away at the state’s vast backlog of unpaid bills.

Quinn wants to increase education funding by $90 million, or about 1 percent, with the money going to early childhood education and college scholarships, said spokeswoman Brooke Anderson. His proposal also includes a call for closing unneeded tax loopholes as a way of coming up with money to gradually pay billions of dollars in overdue bills, she said.

Quinn said his proposal, to be presented Wednesday in a speech to the General Assembly, will include an operations budget lower than the one Illinois had in fiscal 2008.

“This is unheard of in Illinois, to have such great economy over the course of five or six fiscal years,” he said, describing the cuts. “We’ve made herculean efforts.”

The state’s many budget problems include ballooning pension and health care costs. The Democratic governor says Illinois must take immediate action to control those costs before they consume most of the state budget.

But it’s not clear whether Quinn will present detailed proposals for solving those problems when he speaks Wednesday. Quinn aides said he will “lay out all the options” and “put the options out there.”

Anderson did say Quinn is not counting on cutting pension costs in the upcoming budget and that the state will make its full contribution to the retirement systems for government employees. In the past, officials have sometimes come up with long-term savings plans and used them to justify making immediate cuts in pension support.

Chronically short of money, Illinois often delays payments to the businesses, local governments and community groups that provide services for the state. Many have been forced to borrow money, lay off workers or even close their doors because of the state’s late payments. The backlog is roughly $9 billion.

Anderson said Quinn will propose scouring the state tax code for loopholes that don’t contribute to economic growth. Closing them, she said, would provide money to start reducing the backlog. “You can’t do them all overnight,” she said.

Closing loopholes the state no longer needs also would pay for new tax breaks the governor wants, Anderson said — ending natural gas taxes, giving credits for families with children and rewarding businesses that hire veterans.

Anderson said Quinn will call for a $2.7 billion cut to the state’s $14 billion Medicaid program, which provides health care to 2.7 million poor and disabled Illinois residents. Options for the cuts include eliminating some services, cutting rates paid to doctors and hospitals, and restricting eligibility so that fewer people can qualify.

She called it “a little bit premature” to talk about the number of people who might lose services.

Quinn has already asked all of the state’s constitutional officers to cut their budgets by at least 9 percent. He will propose similar cuts for most state agencies under his control.