Illinois Governor Quinn to close facilities, cut jobs

CHICAGO Thu Sep 8, 2011 4:14pm EDT

Illinois Governor Pat Quinn speaks to the press after a meeting with U.S. President Barack Obama during a National Governors Association meeting at the White House in Washington, February 22, 2010. REUTERS/Larry Downing

Illinois Governor Pat Quinn speaks to the press after a meeting with U.S. President Barack Obama during a National Governors Association meeting at the White House in Washington, February 22, 2010.

Credit: Reuters/Larry Downing

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CHICAGO (Reuters) - Illinois Governor Pat Quinn said on Thursday he will close two state prisons and other facilities and lay off more than 1,900 workers to keep the current state budget from running out of money.

The Democratic governor blamed the Democrat-controlled Legislature for sending him a $33 billion general funds budget that locks in spending levels for state agencies and that did not appropriate enough money to keep some state services operating.

"You can't spend money you do not have," Quinn told reporters, adding he cannot legally move money around in the budget for the fiscal year that began July 1.

Instead, the governor called on lawmakers to uphold his veto of $376 million in spending and reallocate that money to areas of the budget earmarked for the layoffs and closures.

Lawmakers are back for an abbreviated session that begins in October and Senate President John Cullerton has said he plans to revisit the budget's shortcomings.

"In days and weeks ahead, we will study the governor's plans to determine what legislative action may be needed," said a statement from his office.

A comment from House Speaker Michael Madigan was not immediately available, but earlier this week his spokesman Steve Brown said it was up to state agencies to deal with their appropriations and that any additional money should be allocated toward Illinois' big pile of unpaid bills incurred in the previous fiscal year.

Quinn said he still has a plan to pay those bills by restructuring that debt, but previous attempts to authorize bonds for bill payments have fizzled in the Legislature, where Republican voted are needed for passage.

Illinois continues to struggle to pay its bills even after a big hike in income tax rates in January.

The facility closures, which include centers for residents with mental health and disability problems, and layoffs are not imminent as they are subject to review by a legislative commission. Quinn estimated nothing would happen until early 2012. In the meantime, he said he hoped lawmakers would reconsider the budget they passed. If they don't, he warned that a third round of budget action could be coming.

Quinn began fiscal 2012 by nixing 2 percent raises worth $75 million for state workers, again contending the budget did not include an appropriation to pay for them.

The American Federation of State, County and Municipal Employees Council 31, which is fighting the state over the pay raise issue, will do "whatever is necessary" to stop the layoffs and facility closures, said Anders Lindall, the union's director of public affairs.

The state's widening structural deficit, huge unfunded pension liability, inability to pay its bills on time and propensity to borrow its way out of financial problems have made Illinois a major worry in the U.S. municipal bond market.

(Editing by James Dalgleish)

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