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Governor Rod R. Blagojevich FY07 Budget Address

FY07 Budget AddressFebruary 15, 2006

Governor Rod R. Blagojevich




The Budget Puzzle

The Mess We Inherited

FY03





Uncontrolled Spending

TotalSta

teB

udget ,in

millions Illinois’ budget was

growing by 5.4% fromFY93 to FY03, more

than double the rateof inflation.





Large Payroll

S

tateE

mploye

es

From FY72 to FY03, headcount ranged from62,000 to 71,000, and it averaged over 69,000state employees during Gov. Ryan’s term.





Underfunded Education

GeneralStat e

Aid

Appro

p.Incr e

ase,

inmill io

ns

General Student Aid went upby more than $150 million inonly two years between FY93

and FY03. It actually wentdown in FY03.





Limited Health Care

E

ligibilityas %

ofFedera

lPove

rtyLevel

Kids

Parents

Health Care eligibility for kids didn’t grow at all fromFY99 to FY03. And eligibility for working parentsshrank each year until it grew slightly in FY03.


http://slidepdf.com/reader/full/gbp-resent-at-ion 7/60Governor Rod R. Blagojevich FY07 Budget Address


Growing Unemployment

2001 2002

In January 2003,Illinois’ unemploymentrate had risen to 6.7%.




Massive Pension Shortfalls

Pension

Sho

rtfall,

in

millions From FY93 to FY03,

pension payments wereunderfunded annually by

at least $810 million.




• The $5 billion deficit we inherited in FY04

represented more than 20% of our total

general revenue budget.

Inherited Deficit

$5.0B



Making Progress

Reduced Headcount

StateE

mplo

yees

We have 13,000 fewer employees today than

in FY01, saving

taxpayers more than$800 million this year.



Making Progress

Consolidated Agencies

To cut costs, we consolidatedor eliminated 19 agencies.

agencies

agencies



Making Progress

Controlled GRF Spending

GRF

Spending,in

millions We’ve cut the spending

growth rate by 40%, evenwith more money for schools and health care.

5.4% growth 3.3% growth



Making Progress

Managed Our Debt

Bonds

Issue

d,inm

illions

We’ve issued less inbonds than Gov. Ryanand are returning to

historical levels.



Making Progress

Special Purpose Funds for Schools

SpecialFund

sBal a

nce,

inmill io

ns

Even after transferring $1.1 billion for schools and healthcare, Special Purpose Funds maintained their balance.

Transfers: $165 $508 $449



Making Progress

NoDeficit

D

eficit,inbil

lio

ns

Eliminated the Deficit

By eliminating the deficit, we were able todedicate more money to programs thathelp people.




Making Progress

Increased Education Funding

NewEduca

tionFu

nding,inmil

lions

$400

$789

$1,119Since FY04, we haveinvested $2.3 billionin new funding for

our schools.

+ + =$2.3

Billion




Making Progress

Increased Preschool Funding

StateEarlyC

hildho

odSpendin

g,

inmill io

ns

We have increased pre-Kfunding by 50% over the lastthree years.




Making Progress

Helped Parents Get Health Care

TotalEnro

llm

ent,i n

thousands

Parents Enrolled in State Health Care Programs

The Kaiser Foundation now ranksIllinois number one in insuring

parents who need health coverage.




Making Progress

Helped Kids Get Health Care

TotalE

nro

llment,i n

thou

sands

Kids Enrolled in State Health Care Programs

Illinois is now the only stateto guarantee access to

comprehensive health carefor all uninsured kids.




Making Progress

Helped Kids Get Health Care

Kid

CareElig

ibility

Income

forF

amilyof

Fou

r By getting rid of income limits alltogether with All Kids, Middle Classchildren can now have access toaffordable health care.




Making Progress

98,000 Free screenings through our breast and cervical

cancer program.

167,000 Women offered free care through our Healthy WomenProgram.

77 Women’s Health grants awarded to fund local

education programs.

Helped Women Get Health Care




Making Progress

Helped Seniors Keep Health Care

$250 - $2,250 $5,100+THE DONUT HOLE $2,250 - $5,100

Illinois’ Medicare Wrap Fills the Donut Hole

Federal Coverage Federal Coverage

The New Federal Medicare Part D Program




Making Progress

Increased Public Safety

State Violent Crimes State Property Crimes

Down 9% Down 6%




Making Progress

Increased Public Safety

Highest Levels of Homeland Security

Illinois is one of only three

states that has achieved thehighest level of bioterrorismpreparedness and emergencymanagement according tofederal agencies.




Making Progress

64,000 New Jobs

State Unemployment Rate (2001 - Present)

2001 2002 2003 2004 2005

Unemployment has fallenback to pre-9/11 levels.




Making Progress

Corporate Profits Are Up

Corpo r

ateProfits, in

mill io

ns CorporateIllinois’ corporate profits in 2004 were

higher than they’ve been since 1997.




Making Progress

Increased Job Creation

Programs

Belvidere1,000 jobs

DeKalb500 jobs

Macomb480 jobs

Naperville1,500 jobs

Edwardsville230 jobs

Marion800 jobs

Champaign150 jobs

Lanark250 jobs

HEADQUARTERS




We have kept Illinois’

income tax at thelowest average of allneighboring states.

1.5%-6.0%

0.4%-9.0%

4.6%-6.8%

3.9%

3.4%

2.0%-6.0%

5.4%-7.9%

0.7%-7.5%3.0%

Making Progress

No Increase to Income or Sales

Tax

3.0%




Making Progress

Invested in Our Pensions

Edgar I Edgar II Ryan Blagojevich

Inve

st m

ent,inbilli

ons

We will have investedmore in pensions thanany administration inhistory.




Making Progress

Invested in Our Pensions

Pensi

onFun

dingL

evel

Our pensions are better funded todaythan they were in 2003 -- a 25% increase.




Proposed FY07 Budget

New Investments in Education and Health Care

New Investments in Public Safety and Job Creation

Strengthening Our Pension System

Streamlining Government and Cutting Costs




Proposed FY07 Budget: Cutting Costs

Remaking Government

Payroll Human Resources Accounting

9SYSTEMS9

SYSTEMS 38SYSTEMS

38SYSTEMS 104SYSTEMS104SYSTEMS




Proposed FY07 Budget: Cutting Costs

• Combines state agency back-office functions to

make them more efficient.

• Functions that every agency has like accountingand payroll will be put in one place to cut down on

repetitive costs.

• This is expected to save taxpayers over $115 million

a year.

Remaking Government




Proposed FY07 Budget: Health Care

EnrollingAll Kids

LaunchingVeterans

Care

Closing theNursingShortage

FundingStem CellResearch

Who We Can Help With This Budget





• Illinois will face a shortage of over 21,000

nurses by the year 2020.

• Our proposal will increase nursing faculty,

decrease education costs, and attract more

nursing candidates.

• Cost would be $50 million over 15 years.

Closing the Nursing Shortage





• Stem cell research will help treat and cure

major illnesses.

• Illinois was the first state in the Midwest to

publicly fund stem cell research.

• Would provide $100 million of funding over five

years from tobacco settlement.

Funding Stem Cell Research




Proposed FY07 Budget: Job Creation

RiverfrontRedevelopment

FilmTax Credit

JobsBill

LicensingReform

How This Budget Will Create More Jobs in Illinois





• Projects filmed in Illinois created 15,000

new jobs last year. A new film credit will

help us stay competitive with other states.

Film Tax Credit





Jobs Plan

RoadConstruction

$2.3 Billion

140,000 jobs

Mass TransitConstruction

$425 Million

85,000 jobs

SchoolConstruction

$500 Million

7,000 jobs

$3.2 Billion in Capital Will Create 230,000 Jobs




Proposed FY07 Budget: Streamlining

• New systems would reduce processing time for

most state licenses from 4-19 weeks to 1-4

weeks.

• Impacts 1 million professionals in Illinois.

• Total cost to implement new processing systems

is $1.6 million.

Licensing Reform to Help Businesses




Proposed FY07 Budget: Public Safety

Provide Fundingfor New

Police Officers

How We Can Improve Public Safety With This Budget

CreateMeth Prison

Unit

Launch thePrairie StateDNA Institute





• We have invested $62 million in DNA testing and

reduced the backlog from 10 months to under 3.

• But as long as we outsource cases, the backlog is notfully in our control.

• The DNA institute gives us more control to reduce the

backlog even more.

Prairie State DNA Institute





• The DNA Institute would improve training and retention of forensic

scientists.

• The program would expand State DNA laboratories and offer

scholarships to train students at Illinois universities.

• This institute would help create a cottage industry of forensic scientists

in Illinois.

Prairie State DNA Institute




Proposed FY07 Budget: Pensions

Guaranteeing Pensions




Proposed FY07 Budget: Pensions

• Use 10th license to strengthen pensions.

• Create incentives to work longer .

• Contribute sale of surplus property to pensions.

• Identify new sources of revenue for pensions.

Guaranteeing Pensions




Proposed FY07 Budget: Education

Increase

K-12 andHigher EdFunding

Reduce

ClassroomSizes

Make

CollegeMore

Affordable

Improve

EarlyChildhoodEducation

How We Can Improve Education With This Budget





$400 Million Increase in K-12 Funding

NewE

ducationFu

ndin

g,

inbillions

Since FY04, we willhave invested anadditional $3.8 billion

in our schools.

$400

$789

$1,119

$1,519

+ + + = $3.8Billion





Increase in Higher Education Funding

• Funding for higher ed would increase by almost

$40 million in our proposed budget.

• Universities would receive over $18 million to

attract and retain the best faculty.

• Community college grants would increase by

almost $7 million.





Universal Preschool





How We Can Improve Education

Attend

schools withsmaller

class sizes

Save $1,000per year on

college

START

Children inIllinois Can:

Benefit from$3.8 billion in

new state fundsfor our schools

Enter preschoolat 3 years old

Take more math,science, writing,

and reading.




Moving Forward




Moving Forward: Fiscal Picture

Massive Deficit

Balanced the Budget

FY03

FY04 -FY06

FY07 Remaking Government




Moving Forward: Economy

Recession and Job LossFY03

FY04 -FY06

FY07

Created 64,000 Jobs in 2005

Pass the Jobs Bill,

New Tax Credits,

Faster Licensing




Moving Forward: Education

Underfunded EducationFY03

FY04 -FY06

FY07

$2.3 Billion Increase in K-12 Funding

Universal Preschool,

$3.8 billion in New funding,College Tuition Tax Credit




Moving Forward: Health Care

Underfunded Health CareFY03

FY04 -FY06

FY07

400,000 More People Enrolled,

Health Care for All Kids,

Rx Help for Seniors

Veterans Care,More Nurses,

Stem Cell Research



Moving Forward

FY03

FY07

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