Ryan Announces Further Action to Balance the State Budget

SPRINGFIELD -- Governor George H. Ryan today announced more than $220 million in spending reductions that are designed to help close a gap in the state budget caused by a slumping national economy and the terrorist attacks of September 11th.

The governor again called on the General Assembly to work with him on needed changes in state law that will ease the pain of further budget cuts that are needed to balance the budget and overcome a $500 million revenue shortfall in the state budget's $23.4 billion General Revenue Fund.

"Over the course of the last month, we've worked with legislators and the agencies to develop a menu of options that will balance the budget. I am announcing some of those actions today." Ryan said. "But some areas of the state budget are off limits to me without the cooperation of the legislature. Without their involvement, balancing the budget in the coming weeks will mean cuts that are deeper than I want."

The budget balancing actions announced today by the governor include:

• An unpaid furlough for all 60,000 state employees under the governor's control. Over the next seven months, state employees will be furloughed for one or more days on a staggered basis to ensure there is no disruption in state services. The governor is requiring his cabinet and senior staff to work during their furlough days. Each furlough day saves the state General Funds $8 million.

• Closing the oldest and most inefficient portion of the Elgin Mental Health Center that serves residents who are civilly committed. Those residents will be moved to other state facilities or into other appropriate settings. The portion of Elgin that houses dangerous patients will remain open. The partial closing of the EMHC will save the state $3 million in FY 2002.

• Closing the 141-year-old Joliet Correctional Center, the oldest and most inefficient prison in the state. The maximum security inmates would be transferred to other facilities around the state. Closing the JCC would save the state more than $4 million in FY 2002.

• Privatizing food and housekeeping services at state correctional centers and mental health and developmental disability facilities. This action saves the state more than $2 million in FY 2002.

• Closing the Illinois Center for Rehabilitation and Education and reassigning clients to other service providers. This action will save the state $2.5 million in FY 2002.

• Stopping work on the construction of the University of Illinois' post-genomics institute. This action saves the state $80 million.

• Cutting programs and spending at the Department of Commerce and Community Affairs, including 2 percent of the state's Industrial Development Grant Program, new equipment and a portion of "smart growth" grant programs. These actions will save the state $7 million in FY 2002.

• Reduce the state's share of fare reimbursements to the Regional Transportation Authority that subsidize lower fares for senior citizens and students using Metra, Pace and the CTA. Senior and student fares will continue to be subsidized at a lower rate. This action will save the state $4 million in FY 2002.

• Reducing by 50 percent funds for the new AgriFirst program, which is designed to help farmers enhance the value of Illinois agriculture products. This action will save the state $1.5 million in FY 2002.

• Reducing grants from the Department of Natural Resources to private museums around Illinois. This action will save the state $1 million in FY 2002.

• Delaying the start of the Illinois Rivers 2020 program, an initiative designed to protect and enhance the state's river watershed. This action will save the state $1.1 million in FY 2002.

• Miscellaneous cuts in all state agencies that will save the state more than $105 million in FY 2002.

These budget-balancing actions will supplement the governor's previously announced cost control measures, which include a $50 million reduction in education administrative costs. The reduction is only a small portion of the state's $8.9 billion commitment to education.

Even with this small reduction for education, the governor is keeping his promise to allocate 51 percent of all new state revenues to education and workforce training. Under current revenue projections, education now will receive 75 percent of all new state resources in FY 2002, or $410 million. Under current revenue projections, 51 percent of all new state revenues equals $270 million.

The governor said a slowing national economy during 2001 was exacerbated by the terrorist attacks in New York City and Washington D.C. Those attacks temporarily brought the nation's air transportation system to a halt, damaged consumer confidence and forced the layoffs of thousands of people in transportation, tourism and other related industries.

Nationally, 44 states have reported to the National Conference of State Legislatures that tax revenues are below estimates for the current fiscal year. Twenty-eight states are reducing or freezing spending and 20 states are tapping into "rainy day funds" or using a portion of the national tobacco settlement to balance their budgets.

"The actions I've taken today are not done lightly, but with an eye on maintaining state services for the poor, the elderly and the sick, as well as our commitment to Illinois schoolchildren while we keep the state's finances in order," Ryan said. "To balance the budget, we have to cut spending. My hope is that the further cuts we have to make will not cause undue pain for the people of Illinois. With the help of the General Assembly, we can keep this revenue shortfall from hurting families and children."