Governor Says Budget Shortfall Looming

by Jeff Fleischer

(Medill News Service, October 3, 2002)


Gov. George Ryan said Thursday that while the state budget sits $80 million behind projections for the first quarter, he still expects to balance the budget before his term ends.

“We are about where we thought we were going to be, although we probably hoped it was going to be a little bit better,” Ryan said. “Our revenues are about $80 million off from what we planned … At this point, running $80 million behind is really nothing to get panicked about in a $500 billion budget.”

While Ryan stressed that the state’s 2003 projections are not a cause for immediate concern, he said the next governor will face a challenge in handling the 2004 budget.

“We know that there’s increased spending pressures that are there that you can’t do anything about — union contracts, lawsuits, pension programs that we have to fund. There’s spending pressures that you can’t walk away from,” Ryan said. “For ’04, we think [that will be] somewhere around $2 billion as a result of increased spending pressures and a decrease in revenues.

“I think the next governor’s going to have to make some tough decisions.”

Ryan said revenues decreased for the first fiscal quarter of the 2003 budget year, which ended Sept. 30.

“Our income taxes came in about $50 million less than what we thought, and sales taxes were also a bit sluggish,” he said. “On the plus side, we did get some additional federal dollars. The increased casino taxes earned more than $30 million for this quarter alone.”

Michael Colsch, the new director of the Illinois Bureau of the Budget, echoed Ryan’s guarded optimism for the current fiscal year.

“Eighty million is really a small amount to be off,” he said. “It’s not unusual for us to be off — even in the best of times — either $80 million below or $80 million above, so I don’t think one quarter is a good indicator of the trend.

“As the governor mentioned, we’ve just got to continue to monitor this.”

Ryan shared his latest budget data with state officials Thursday morning, including Treasurer Judy Baar Topinka, Comptroller Daniel Hynes, Senate President James “Pate” Philip and House Speaker Michael Madigan.

“[The projections] are pretty much what everybody has been saying,” said Steve Brown, a Madigan spokesman. “Right now, we’re trying to just do things in small increments. Long-range planning is not possible right now. Hopefully, the economy gets back on track.”

Ryan’s short-term plans do not include any new taxes or spending cuts.

“I cut the budget last November, and then again in the spring,” he said. “So right now, we’re stable, but we have to watch this economy.”

State unemployment is averaging 6.4 percent, Ryan said, a figure higher than both the national average and the state’s total at this time last year. He said Illinois’ economic concerns mirror those of “about 45 other states in the same situation.”

The governor promised that the winner of the gubernatorial race between Republican Attorney General Jim Ryan and Democratic Congressman Rod Blagojevich will inherit a balanced budget as mandated by the state constitution, but will have difficult decisions to make in the 2004 fiscal year.

“We’ve cut a lot of programs, we’ve done a lot of layoffs — things that were unpleasant to do,” Ryan said. “I don’t envy them.”

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