Feb 12, 2008 9:55 am US/Central
Hynes: State Is $750 Million In The Red
State Comptroller Says Lawmakers Failed To Prepare For Economic Downturn
CHICAGO (AP) ―
As the Blagojevich administration prepares a budget for next year that could have a significant deficit, an official said a $750 million hole in this year's budget needs to be filled.
Comptroller Dan Hynes said the state is entering an "extraordinarily challenging period" because it failed to prepare for an economic downturn as it struggles to pay a backlog of bills.
"We still have a serious budget deficit," Hynes told the Chicago Tribune's editorial board on Monday.
Blagojevich will unveil his new budget Feb. 20, but his administration acknowledged Monday leaders also must close the $750 million hole in the current budget that was fused together in a bitter legislative overtime session. The governor's figure is higher than the $600 million shortfall projected by the legislature's budget forecasters.
Rising costs of Medicaid and state worker pensions coupled with a slowdown in revenue growth provide the makings of an ominous financial picture going into the budget year that begins July 1, officials said.
Interest income also will tumble because of the drop in rates for investments, according to Treasurer Alexi Giannoulias.
To fill the current hole, the governor's aides said they hoped lawmakers would consider eliminating a series of tax breaks for corporations and sweep money from a variety of special funds with balances that have been tapped in prior years under Blagojevich.
The problem for Blagojevich is that several of these approaches previously have been rejected by lawmakers.
"It is not a pretty picture any time you have a big hole that you have to backfill," said Sen. Donne Trotter (D-Chicago).
Blagojevich spokeswoman Abby Ottenhoff said the current budget was passed by the legislature with inflated revenue projections and would be worse if the governor had not vetoed hundreds of millions of dollars.
(© 2010 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)
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