With fewer people working, there are fewer payroll taxes collected. And with less money, there is less spending and fewer sales taxes paid. As dollars drain away from local governments, the leaders are beginning to make the difficult choices.
At Chicago's Thompson Center, virtually every state employee will be affected by the budget cuts by either lower compensation or increased workload.
In the Illinois Treasurer's Office, a salary freeze is in effect, all non-union employees must take two days off without pay, and about six workers have been laid off.
"To have to lay off people and put freezes on their salaries is something that is very challenging," Giannoulias said.
Workers at city hall Friday anxiously awaited word on how many would lose their jobs as the Daley administration decides how to close an estimated $420 million budget hole.
The only safe public employees are those who work for Cook County. Last spring's sales tax increase has kicked in, and Board President Todd Stroger has enough money to meet the payroll and then some.
"This year, the majority of our people who were hired are doctors and nurses," Stroger said.
As it is throughout the county, the increased sales tax is being charged in the city. At least one alderman suspects the extra penny has slowed business in Chicago, which is not collecting sales tax revenue at the rate it expected.
"The numbers are not coming up to pay our bills, and we are in a terrible situation," said 2nd Ward Ald. Bob Fioretti.
In the state budget cuts, directed by Governor Blagojevich, offices led by the treasurer, Lt. Governor Pat Quinn and Attorney General Lisa Madigan took the biggest hits. Both Giannoulias and Madigan are potential 2010 Democratic primary challengers to the governor, and the treasurer suspects politics are in play.
"What I have trouble with is this being done based on a personal vendetta against me or my office," Giannoulias said.Attorney General Madigan's office, which took a 25-percent reduction in its budget, is suggesting early retirement for eligible employees to go along with a salary and hiring freeze.
The rumblings continue at city hall where reports are that more than 1,000 city workers could be laid off. The city is considering asking police officers and firefighters to take furlough days to help save money, but officials say there are no plans to lay any of them off.