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FOR IMMEDIATE RELEASE
May 27, 2002

Governor Ryan Introduces Responsible, Balanced Fy 2003 Budget
Calls on General Assembly to send budget bill to his desk before June 1

SPRINGFIELD -- Governor George H. Ryan introduced a new Fiscal Year 2003 budget proposal that solves the $2 Billion budget shortfall with cuts and new revenue and urged the General Assembly to take the lead and put a responsible budget on his desk during a joint Memorial Day session.

The new budget proposal equals $22.451 billion in General Revenue Fund (GRF) allocations. GRF spending is about $260 million below the level proposed in February.

“This budget is a tough proposition to accept, but the alternatives before you - stalemate, deadlock and inaction – are worse for the people of this state,” said Governor Ryan. “It is time for us to show real leadership.”

Through a combination of cuts and new revenue, including tax increases, this new proposal restores $323 million in previous cuts to important services including:

  • Restoring $165 million in state funds to provide healthcare for the poor that will allow for an additional $165 million in federal matching funds.

  • Vienna Correctional Center will stay open.

  • Restoring $75 million in cuts to developmental disability and mental health services.

  • Restoring funding to subsidize childcare programs, eliminating an increase in child-care co-pays.

  • Restoring full funding for immigrant services, $1.7 million;

  • Increase funding for Teen Reach, $1.3 million.

  • Adding $2 million to the Appellate Defender’s office.

  • Restoring $8 million to our homemakers’ program for the aged and fully fund the Community Care Program in the Department on Aging.

  • Maintaining, at the original 2002 level, the fare subsidy we provide to the Regional Transportation Authority for the elderly, students and the disabled.

  • Funding for a new class of state police cadets in the coming year, maintaining our commitment to keep our roadways safe.

  • Funding the occupation of three cell houses at the state’s newest maximum-security prison in Thomson.

The Governor’s new proposal also includes $1 billion in short-term borrowing, which will be repaid by the end of the fiscal year, to allow the state to pay existing bills.

“It is unfair, particularly to small businesses that the state is not paying for its goods and services because of our budget impasse,” Governor Ryan said. “With this balanced budget proposal, I propose borrowing so that we can get current on our bills and stave off financial ruin for hundreds of small business people.”

The Governor’s top budget priority throughout his administration has been the education of our children. This budget proposal includes $1 billion in new bond funds for the highly successful school construction program. A pilot project for a statewide “universal access” to quality preschool programs and the “Great Start” program are also funded under this proposal.

Several other education initiatives are receiving full funding including the Merit Scholarship program and the Illinois Century Network. Adult literacy programs, the Illinois Workforce Advantage program and “Skills Match” will continue to receive funding.

This budget also includes an appropriation of federal funds for Governor Ryan’s innovative new “FamilyCare” program to provide health insurance to roughly 35,000 parents of children enrolled in the “KidCare” program. It also expands the number of Community Integrated Living Arrangements to help the developmentally disabled find a safe and productive home in a real neighborhood.

Budget cuts of more than $500 million are also proposed in other programs:

  • Higher education funding will be reduced by $62 million, $20 million of that amount will be met by eliminating a fifth year of scholarships for students receiving grants from the Monetary Award Program.

  • The Department of Corrections will save $50 million by closing the Sheridan Correctional Center, as well as several work camps and “boot” camps throughout the state, and some adult transition centers. More than 400 sergeants from the ranks of correctional officers will be laid off saving $28 million. Additionally, the proposal includes saving $25 million by pursuing the privatization of food service operations in our state prisons.

  • The Department of Human Services will close 11 local service offices throughout the state and the civil commitment wing of the Alton Mental Health Center. Operations at the DHS central offices in Chicago and Springfield will also be reduced. The TANF grant increase will also be scaled down from the level proposed in February from 10% to 5%. Total savings from these cuts will be $43 million.

  • The Department of Public Aid, the Department of Transportation, the Department of Commerce and Community Affairs, the Department of Natural Resources and the Illinois State Police will reduce central operational costs at a savings of $40 million.

  • The Department of Children and Family Services will reduce administrative spending in areas that will not adversely affect programs and services saving $25 million.

  • Anti-smoking programs, such as billboard advertising, throughout Illinois will also be reduced by $23 million.

Governor Ryan’s plan includes $50 million in savings from implementing new personnel management policies in every state agency over the next year including an early retirement program.

To ensure a balanced budget, Governor Ryan has also proposed measures that will generate additional GRF funds. The proposal suggests shifting money within the state budget from funds that are flush with cash to the General Revenue Fund, allowing $150 million to be diverted to the GRF. Additionally $30 million from the Road Fund will be used to pay for the operations of the Illinois State Police and one-third of the $90 million in unused reserves being held by the CHIP program will be diverted for operations of that program.

“In my view, we cannot cut the budget any deeper in order to bring revenues in line with spending. To go any further would be harmful to the people we are obligated to serve with these programs,” added Governor Ryan. “So we must go in the opposite direction and make small changes to our revenue structure in order to make ends meet.”

Revenue generating proposals of $590 million include:

  • Increasing the state’s cigarette tax by 50 cents - raising $285 million.

  • Increasing the tax on the windfall profits of Illinois’ riverboat casinos - raising $185 million.

  • Increasing the real estate transfer tax to $1.50 for every $500 of equity - raising $120 million.

Additionally, the Governor’s proposal calls for continuing existing state practices in regard to the depreciation of business investment for tax purposes instead of participating in a new federal tax program. The federal tax break will save Illinois businesses more than $2 billion, but the state treasury will not lose $240 million and local governments will not lose $150 million. Reallocating the distribution of the Real Estate Transfer tax will generate $15 million, and keeping the state photo processing tax in the state treasury will generate $25 million.

“I invite you to debate these proposals. Submit your own ideas for needed spending. But if you add a dollar in spending, you must also add a dollar in revenue to pay for it. I won’t accept smoke and mirrors. I will use my veto authority to bring spending in line with revenues. I will work with you around the clock if necessary. In return, I only ask for one thing: Send a responsible and balanced budget to my desk,” said Governor Ryan

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