Highlights of Governor Blagojevich's State of the State and Budget Address 2008

The Governor's message to the citizens of the State of Illinois was unusually brief and relatively civil this year, although it was found by most audiences to be lacking in detail. Some of the highlights include:

Follow up the federal economic stimulus plan with an Illinois plan that would provide a one time $300 tax credit for children. Offer a one time corporate income tax rebate of 20%. This stimulus plan would cost about $1.2 billion and the revenue sources to pay for this benevolence are nebulous.

Develop a $25 billion capital plan for infrastructure, school construction and economic development. This cost would be about $11 billion and would be funded by the sale/license of the Illinois State Lottery. Some funding would also come from the school construction fund and matching local district dollars.

Plug the current revenue gap of $750 million by fund transfers and the closing of business tax loopholes which will be hard to do at this time of the year.

For 2009, the Governor's plan envisions $500 million in new revenue growth and $1.4 billion in new spending but no firm revenue sources have been identified. An additional $300 million in funds for public education.

Cut current state spending across the board in all areas except, education, healthcare, and public safety by imposing a 3% cut on what amounts to about 15% of the state budget.

Impose a payroll tax on employers with more than 10 employees that do not provide medial insurance for their employees to pay for additional healthcare expansion in Illinois.

Issue $16 billion worth of pension obligation bonds that would allow the current increase in pension fund payments to be reduced significantly.

As you can, see there is not a great deal of concern about what Governor Blagojevich wishes to spend state money on since education, healthcare and infrastructure are very popular items. The concern, as it usually is with this Governor, is how he proposes to generate funds to support his budget. This could be another hard year as the General Assembly and Governor work to develop a budget for FY09.