Illinois balancing FY 2012 budget deficit with tax increases, spending cuts, and debt management

Deltek Principal Analyst Jason Sajko reports.

Challenged by an anticipated budget shortfall of more than $13 billion, IL Governor Quinn and the state legislature passed tax increases in January, 2011 that are projected to create more than $6 billion in increased revenue per year. Then, in February, Quinn unveiled his FY 2012 recommended budget. The budget was framed as a continuation of his “Five Pillars of Recovery” plan. This five pillars plan is aimed at the state’s fiscal crisis identifies job creation, cost cutting, strategic borrowing, federal assistance, and increased state revenues as the strategies towards right siding the state.

The governor’s budget details $52.7 billion all-funds operating appropriations in FY 2012, a 1.5 percent decrease from $53.5 billion in FY 2011. The Illinois legislature-approved FY 2012 budget currently on Quinn’s desk is touted to make more cuts to state spending than Quinn’s budget. Quinn and legislators are working through concerns in an attempt to agree on budget differences as quickly as possible to avoid further special legislative sessions.

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