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February 20, 2002

Governor Ryan Proposes Balanced $52.8 Billion 2003 Budget
Historic Funding for Schools, More State Police, Community Living Arrangements for Disabled

SPRINGFIELD -- Governor George H. Ryan is proposing a balanced $52.8 billion Fiscal Year 2003 budget with an historic change in state school funding and, for the fourth straight year, 51 percent of new revenues dedicated to education.

The budget plans more resources for public safety and human services, but also sets priorities to address a slumping national economy. Agency budget bases are being cut across the board by 3 percent. The state’s workforce would be reduced by nearly 3,800 positions and four state facilities would be closed.

“Today, I can report to you that the State of Illinois remains strong. The $52.8 billion budget that I present to you today fulfills all of the many goals that we – together – set for Illinois four years ago,” Ryan told a joint session of the General Assembly. “This budget is lean, but fair. This budget is balanced. And it contains no tax increases.”

The governor’s budget keeps his four-year pledge to allocate 51 percent of all new state revenues to schools and workforce training. Significantly, it also boosts the per-pupil “foundation level” of state funding to almost $5,000 a year, an unprecedented level of state support for every public school child.

The recommended “foundation level” represents an increase of almost 18 percent in the guaranteed per-pupil funding level since Ryan took office in 1999.

Maintaining the governor’s 51 percent pledge will mean an allocation of $245 million in expected new revenues during the coming fiscal year, which begins on July 1. Total revenue growth for Fiscal Year 2003 is estimated to be $480 million. If approved, Gov. Ryan’s Administration will have provided $1.45 billion in new funding for education over four years.

“This budget keeps our commitment that education and workforce training will be our top priority,” Ryan said.

For years in Illinois, school districts have struggled with a funding disparity caused by a funding system tied directly to land values. This disparity creates a huge and unfair gap between schools in areas where property values are high and increasing, and areas where land values are low and stagnant.

Since 1997 the General Assembly has tried to bridge this gap and raise the “foundation level,” or the amount of money we guarantee for every public school student in the state. Since 1999, the foundation level has been increased by $335, or about $111 per year.

To raise the foundation level to a record of nearly $5,000 per student, the Governor proposes combining 22 separate grant programs administered by the State Board of Education for individual school districts. The Governor instead proposes allocating the nearly $500 million to the school aid formula. The new investment brings the total for state aid to almost $3.7 billion, a record level.

“This money will go to local school districts, where local leaders can decide how best to spend it to serve their students, rather than having state bureaucrats in Springfield make the decisions for them,” Gov. Ryan said.

Currently, to receive grant money, every school district has to submit grant applications to the State Board of Education for approval.

Other highlights of the Governor’s State of the State / Budget Address include:

Education and Workforce Training

  • “Illinois Preschool” The FY 2003 State Budget includes a $5.8 million allocation to begin “Illinois Preschool,” a first-of-its-kind program that gives all three-and-four-year-olds access to a quality preschool program, no matter where they live in Illinois. Educational studies of youngsters indicate that children who enroll in a quality preschool program do better in school and in life. Another study of preschool children in Chicago indicates that for every dollar spent on quality preschool programs, state government can save $7 in the cost of public safety, remedial education and health care for these children.

  • Teacher Development More than $15 million is proposed to start developing programs to aid the recruitment, mentoring and continued training of teachers at all levels--recommendations that emerged from the 2001 Governor’s Education Summit.

  • Accountability Standards With the enactment last month of President Bush’s “No Child Left behind” education reform act, every school district will have to meet tough state accountability standards and implement annual student testing for most elementary school grades, or be placed on an academic watch list. The State Board of Education will develop a plan this summer that puts new state accountability standards and new testing requirements into synch with those in federal law.

Human Services

  • “FamilyCare” The FY 2003 State Budget proposes a “FamilyCare” initiative to extend health benefits to the families of children enrolled in the Kidcare program. KidCare enrollments now top 178,000 – or roughly 75 percent of all the children in Illinois who are eligible for this program. The Department of Public Aid is negotiating with the U.S. Department of Health and Human Services for a waiver of federal rules that will allow Illinois to use unspent KidCare money to extend health coverage to more than 200,000 adults in Illinois.

  • “SeniorCare” Under this new program, as many as 400,000 seniors in Illinois with incomes below 200 percent of the federal government’s poverty level will be eligible beginning June 1, for assistance in purchasing prescription drugs for around a $3 co-pay. This program, an expansion of Illinois’ existing “circuit breaker” program for seniors, has been hailed by the Bush Administration as a national model.

  • TANF Grant Increase While the number of families in the Temporary Assistance for Needy Families program is expected to drop to 48,000 in the next year – a record low – more than 40,000 families still need direct cash assistance. This budget will be able to fund an average 10 percent increase in the TANF grant for families, which currently stands at $377 per month to a single parent and two children.

  • John W. Maitland, Jr. LIHEAP Grants The budget continues a record state commitment -- $140 million -- to help low-income families pay their winter heating bills through the Low-Income Home Energy Assistance Program, or LIHEAP. To recognize the importance of the LIHEAP program, the Governor proposed that the name be changed to honor the creator of the grants – retiring state Sen. John W. Maitland Jr., of Bloomington.

  • Illinois Workforce Advantage This budget also calls for an expansion of the innovative “Illinois Workforce Advantage” program, which helps disadvantaged communities find and implement the right mix of state services and programs to help advance economic development, health care and education. The IWA program will expand to three new areas of the state.

  • Aid to the Aged, Blind and Disabled The FY 2003 State Budget lives up to a three-year-old commitment to expand state support for health care services to more of our most needy citizens – the aged, blind and disabled. In this budget, coverage of people within the AABD program will expand to 100 percent of the federal poverty level, enabling 93,000 more people to get state help in meeting their needs.

  • Adoptions and Permanent Placements Funding for assisting in adoptions and permanent placements through the Department of Children and Family Services is increased by $20 million in this budget. In the last three years, DCFS has become a national model in the area of helping troubled families and at-risk children find safety, security and the path to a better life.

  • Home Care Services for Seniors and the Disabled The recommended budget for human services continues a three-year effort to boost the wages of home care workers for seniors and the disabled. With this new $1-an-hour wage increase, over four years the Ryan Administration will have provided a 21 percent increase in pay for the Department on Aging’s Community Care program and a 25 percent increase for personal assistants in the Home Services program run by DHS.

  • New Community Integrated Living Arrangements In this budget, the state will continue to move as many residents of state-run developmentally disabled centers as possible to community-based living arrangements. This budget includes funding for 310 new positions in CILAs.

Public Safety and Homeland Security

  • Illinois State Police The FY 2003 budget includes $383 million in funding for the Illinois State Police, an allocation that includes two new state trooper cadet classes totaling 100 new officers, and continued work on the STARCOM statewide voice communications system. The budget also includes funds to hire 80 additional forensic scientists, part of a three-year commitment to expand the state’s capabilities in quickly processing evidence in criminal cases.

  • Department of Corrections The budget for FY 2003 allows the state to open more than 3,900 new prison beds – 1,717 at the Lawrence Correctional Center in Southern Illinois, 1,800 at the new reception and classification center in Joliet, and 415 at the new youth centers in Kewanee and Rushville.

In order to balance his proposed Fiscal Year 2003 budget, the governor had to make several tough choices that will result in a total appropriation from the budget’s General Funds of $22.7 billion – an amount 5 percent less than the FY 2002 state appropriation level of $23.4 billion. The cost controls came in a 3 percent across-the-board cut to the 2003 budget base and last fall’s 2 percent cut to the FY 2002 budget.

The reductions were necessitated by the national economic recession worsened by the terrorist attacks of September 11th.

“I want to make it clear to everyone in Illinois that this government has not been spending wildly,” Ryan said. “We have kept our spending under control.”

With this budget, Ryan said the four-year average growth in state spending will be 3.5 percent, a small annual increase compared to the growth in the economy during the same time period.

Last fall, the National Association of State Budget Officers reported that the average growth among the 50 states in spending their own General Funds revenue was 2.8 percent, while the increase in Illinois was 1.5 percent.

In the previous fiscal year, when state spending increased by an average of 8.3 percent nationwide, Illinois’ spending growth was 6.1 percent.

Most of the country suffered from the economic downturn after September 11. Forty-two of the 50 states have reported an unanticipated drop in revenues. All of those states have had to adjust their budgets, either through a combination of spending cuts, drawing on reserve funds, or in a few cases, increasing taxes.

Among the spending controls included in the FY 2003 State Budget:

  • The FY 2003 budget is predicated on the lowest state employee headcount in more than a decade – 62,000 positions. The state government workforce will be downsized by 3,800 positions.

  • An early retirement program for qualified state employees was proposed to help in reducing the state workforce. While the exact details of an early retirement plan have yet to be worked out, it is estimated that the state can save as much as $50 million.

  • The Vienna Correctional Center and the Valley View Youth Center, some of the oldest infrastructure in the Corrections system, will be closed and the inmate populations moved to other facilities.

  • The opening of the new maximum-security prison in Thomson will be delayed for one year to avoid absorbing the costs of opening that prison.

  • The Zeller Mental Health Center in Peoria and the developmental disability unit at the Singer Mental Health and Developmental Center in Rockford will be closed.

“Every year that I have served the people as governor, I have asked all of you – Republican and Democrat -- to join me in building a ‘New Illinois.’ Each year, I have asked you to put partisanship aside and place the common good of the people and our state foremost in your actions,” Ryan said. “Sometimes, that has been a tremendous challenge. But we always have succeeded in finding a common ground that resolves our differences.

“Today, one more time, I renew my invitation and – again – extend my hand in friendship,” the Governor added. “Let’s all work together to do great things for Illinois.”


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