From AP - News Headlines -

After Tax Hike, Quinn Budget Offers More Pain

Gov. Pat Quinn presented lawmakers with a budget proposal Wednesday that would increase state spending overall while skimping on human services and borrowing billions of dollars to pay old bills.

Among the spending cuts -- just a month after Quinn approved a major income tax increase -- are programs helping the elderly buy medicine, payments for medical services to the poor and money to hire new state troopers.

The Chicago Democrat described his plan as a frugal, even painful, step toward getting Illinois out of its cavernous budget hole.

"Our commitment to taxpayers is simple: We will only use tax dollars to provide necessary services. All unnecessary state spending will be eliminated," Quinn said in a speech to the General Assembly.

Republicans immediately said Quinn wasn't living up to that promise. They noted the key measure of state spending would increase by $1.7 billion, to about $35.4 billion.

"We got into this mess because we spent money we didn't have and it's just a continuation. It's the same old song," said House Minority Leader Tom Cross, R-Oswego.

Even Quinn's fellow Democrats questioned his budget math, suggesting that he proposes paying some upcoming expenses with money that isn't available or should be used to pay bills that are past due.

His plan also came under fire from groups that count on state money to provide services to the poor and sick.

Hospital and nursing home groups criticized Quinn's proposal to cut Medicaid rates by $552 million, or about 5 percent. Bob Hedges, president of the Illinois Health Care Association, called it "a terrible blow to our seniors, employees, families and communities."

Quinn spared education from dramatic cuts, but Voices for Illinois Children said his plan appears to slash after-school and mental health programs that keep children out of trouble.

"When the school bell rings, kids still have needs," said the group's policy director, Sean Noble.

The tax increase Quinn approved should generate about $6.8 billion in the budget year that begins July 1, but that's not nearly enough to put state government back in the black.

Quinn's aides say the increased spending in his proposal is a result of using the new income tax to cover the rising cost of services or pay for items neglected in past budgets. They said the spending plan includes more than $1 billion in cuts.

Even with the tax increase, Illinois has $9 billion or $10 billion in overdue bills that must be paid, Quinn's budget director David Vaught said. The governor's plan to pay those bills could be the most contentious part of budget negotiations.

Quinn and Democratic legislative leaders want to borrow $8.7 billion to pay off overdue bills. Instead of informally borrowing money simply by not paying its bills, the state would sell bonds and pay the debt over 14 years.

The governor maintains that this step, which technically would take place in the current budget year, would be fair to the state's vendors and good for the economy.

"We have the opportunity to jump-start our economy by paying our vendors today -- an immediate injection of billions into our economy," Quinn said in his 27-minute speech, during which he wore a sash known as a kente cloth to mark Black History Month.

Republicans called for more spending cuts before any borrowing.

"I don't think the public understands after the single biggest tax increase that we've had in the state of Illinois, that now you want to go borrow over $8 billion," Republican Comptroller Judy Baar Topinka said. "We have to clean up our act and get the budget into compliance first."

Democrats also questioned parts of Quinn's proposal. House Speaker Michael Madigan said the proposal appears to include $720 million from two technical tax changes that have not been approved, violating new policies meant to control spending.

"I'm confident that we will work our way through these differences, but my commitment in Illinois budget-making this year is to live within those spending controls," Madigan, D-Chicago, said in an interview with the public television show "Illinois Lawmakers."

And Senate President John Cullerton said Quinn seems to be using borrowed money to pay for upcoming expenses, instead of devoting it solely to overdue bills.

Still, Cullerton, D-Chicago, saved his sharpest remarks for the GOP officials who oppose borrowing to pay what Illinois owes to businesses, community groups and charities.

"If Republicans are willing to have a conversation that doesn't start with 'No,' I'm ready to listen," Cullerton said in a statement.

Quinn also called for consolidating some of the state's 868 school districts and said he wants a commission to study the always-contentious issue. He predicted taxpayers could save $100 million by merging small districts.

He proposed a major cut in state support for local schools' bus costs and he called for eliminating regional offices of education for a savings of $14 million.