Illinois Facing Potential $800 Million Budget Hole

A staggering economy is eating away at state budget revenue, creating what could be a budget hole of $800 million or more, the Blagojevich administration warned Monday.

The state's top revenue sources - taxes on personal income, corporate income, and retail sales - are coming in at lower levels than anticipated. The Revenue Department says tax revenue from riverboat casinos could fall $100 million below projections too.

The shaky fiscal picture is the reason Gov. Rod Blagojevich has not acted on legislation to restore $230 million in budget cuts he was forced to make last summer.

Lawmakers, responding to public pressure, voted in September to come up with the money to spare cuts of more than 300 jobs, substance-abuse treatment and closing two dozen state parks and historic sites. But Blagojevich has said he won't sign it unless he sees an improved revenue outlook.

Combined, income and sales taxes are down $247 million, or 4.3 percent, from what the administration predicted last spring, Revenue spokesman Mike Klemens said. At that pace, the income from those sources could be down $821 million for the year or more if the economy worsens, he said.

The Legislature's bipartisan budget office reports overall revenue is down $406 million from a year ago, including a $239 million drop in federal funding in October.

The bipartisan Commission on Government Forecasting and Accountability reports growth of $143 million, or 2.3 percent, in the top three revenue sources, compared to a year ago. But when money set aside to pay tax refunds is subtracted, its numbers mimic the administration's.

Comments

[mamacat]

I'll trade you your $800 million deficit for California's $7 billion deficit. Do we have a deal?