SPRINGFIELD, Ill., March 5 Illinois Governor Pat
Quinn will unveil a fiscal 2014 budget on Wednesday that will
chip away at a huge pile of overdue bills and cut spending to
accommodate growing public pension costs, top state officials
said on Tuesday.
"The governor's fiscal 2014 budget is balanced, it's honest
and it's extremely difficult," Illinois Budget Director Jerry
Stermer told reporters at a preview for the $62.4 billion
all-funds budget that includes $35.6 billion of general fund
Pension payments totaling $6 billion will consume 19 percent
of the general fund, compared to just 6 percent in fiscal 2008.
As a result, the Democratic governor's spending plan for the
fiscal year that begins July 1 includes projected cuts of about
$400 million to education and additional cuts in transportation
and state-funded colleges and universities.
"We have to address the pension issue. It's squeezing out
other expenditures," said Jack Lavin, Quinn's chief of staff.
Quinn's spending plan would also shrink the bill backlog to
$6.8 billion in the coming fiscal year from $8.7 billion at the
end of fiscal 2012 while eschewing new fees or taxes. And the
governor will propose a way to pay down the bill pile faster in
his budget address before the General Assembly on Wednesday,
Illinois stands alone among states in the scope and way it
has institutionalized late payment of bills as a
budget-balancing tool. The resulting structural budget imbalance
as well as inaction by lawmakers to reduce a $96.8 billion
unfunded pension liability have given Illinois the lowest credit
ratings among the states.
Stermer said the governor wants the actual costs of programs
and their outstanding bills to match up to appropriations - a
practice that has not been followed by the legislature.
"The reality is we need to end the budget gimmickry," he
The Illinois Constitution's balanced budget requirement
only stipulates that expenditures not exceed estimated revenue,
leaving the door open to the use of unrealistic revenue
assumptions and chronic underfunding of programs to create the
illusion of balance.
A tentative agreement with the American Federation of State,
County and Municipal Employees Council 31 will save Illinois
more than $900 million in health care costs over the three-year
life of the contract by requiring contributions from retirees
for the first time, according to Lavin.
But Illinois will also have to come up with about $140
million for unionized workers after the state lost a court
battle over wage increases, Lavin said.