Illinois' financial woes await new governor

January 30, 2009 Now Governor Pat Quinn must get Illinois government working again.

At the top of that list is what to do with the finances of America's fifth largest state. Despite constitutional requirements that Illinois balance it budget every year, the books are in the red. It's estimated two to 3.5 billion for this year alone. And through a series of accounting tricks -- or political math -- some say the debt of the Land of Lincoln is in the tens of billions of dollars. Like it is for you and me, those bills are going to have to be paid some day. And with a new administration, that day is likely sooner rather than later.

Pension obligations for a range of state workers. Billions in Medicare bills that a state loophole allows to be paid the year after their incursion. Free public transit rides for seniors. All state obligations not listed in the current budget -- a fiscal time bomb according to the institute for truth in accounting.

"We need to start taking personal responsibility and living within our budget, the state needs to start living within its budget the feds too instead of this la la land where we can have anything we want and not have the consequences against it," said Sheila Weinberg, Institute for Truth in Accounting.

The incoming Quinn administration is going to have to wrestle with a deficit that's $2 to 3.5 billion -- at least -- according to state treasurer Alexi Giannoulias. The caterpillar situation is just one that is blowing a hole in state corporate income tax revenue -- not to mention how job losses are skewering personal income tax and sales tax receipts. It's a crisis. And while the treasurer hates taxes, he's not ruling out new ones.

"The problems we are dealing with are from people not being responsible over the last ten 20 years, especially with pension obligation, legislature that didn't always take that responsibility seriously,"

Giannoulias, a close friend of President Obama's, says the new president's stimulus package has the potential to help -- if Illinois is organized.

"What kind of money is going to come in for Medicaid, what kind of money is going to come in for education, infrastructure -- for me it is going to be key to dealing with these problems," said Giannoulias.

But the Illinois comptroller feels one time fixes aren't going to heal what ails the state government's systemic problem with spending more money than it raises. For as bad as things are now, Dan Hynes thinks they are about to get worse.

"The gimmicks have been mostly exhausted, the last two governors mastered the art of smoke and mirrors and it is going be time to get serious get real about this budget deficit," said Hynes, Illinois comptroller.

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