Washington
By ROBERT MACKAY

The budget proposals: direct and indirect cuts for Illinois

THE WAVE of fiscal responsibility sweeping Washington is bound to cost the state of Illinois at least tens of millions of dollars or, at the worst, hundreds of millions of dollars in federal money that it now uses for education, transportation and human services.

In its attempt to balance the federal budget, Congress also is considering cutting other programs that would have an indirect impact on the state, yet still cost Illinois additional millions of dollars. The indirect impact would be felt through reduced federal money for water projects, energy conservation and construction grants.

Overall, the Illinois Bureau of the Budget estimates the state could lose nearly $1 billion over the next 27 months in federal aid and assistance. That estimate is probably high, but there is no doubt the state is going to lose millions of dollars and will have to readjust its own budget after Congress definitely decides what it is going to cut and by how much. The appropriations committees will try to accomplish that by the July 4 recess.

President Carter's budget proposal, along with those put forward by the Senate and House budget committees, called for the elimination of the states' share of General Revenue Sharing (GRS) funds. Attempts to restore those funds — which state governments can use for any purpose they deem fit — failed in the House, but the Senate managed to pass an amendment restoring about one-third of those funds by taking money away from categorical grants, which is money given to state governments for specific purposes.

That is bad news for Illinois, because the state uses all of its GRS funds — some $113 million a year — for local education. With the elimination of those funds, not only will all the school districts in Illinois be hurt, but Chicago would be hard-pressed to keep its financially crippled school system operating in a responsible fashion.

The budget proposals also call for cutting transportation money to the states, and Illinois could lose up to $45 million a year in direct aid there. But that is not all. The state usually manages to get a few discretionary federal transportation grants, and those may be cut off as well.

"Illinois does very well at getting as much from the federal transportation pot as it possibly can," said Alie Randlett, deputy director of the State of Illinois Office in Washington. "We do about as well as any state I know of. Therefore, if they put a ceiling on discretionaries, we will take a greater than proportional share of the loss."

The budget proposals would also reduce the amount of money given to states through the Law Enforcement Assistance Administration (LEAA), which could mean a loss of up to $22 million a year for the Illinois Law Enforcement Commission. That means the state may be dealing with a smaller ILEC program or no program at all.

Illinois will also lose millions of dollars if Congress and the president stick with their plans to cut funding for the Comprehensive Employment Training Act (CETA) program.

All of that puts the state of Illinois, as other states, in a very difficult position: how to transfer funds from other programs to make up for the loss in federal monies, without severe cutbacks in any one program. "What we're going to do I don't know," Randlett said. "I suspect we're going to try to spread it [around]."

One of the indirect effects of the federal budget cuts on the state is the reduced federal money to local governments for CETA's Title VI program, which puts disadvantaged people to work as public service employees. Chicago, for example, is the prime sponsor of public service employees in Chicago, and the PSE people who work for the state government there are actually paid with federal money given to the prime sponsor, in this case Chicago. "So, there won't be any direct loss to the state budget when they [Chicago] lose Title VI money, but they won't have any Title VI employees for state government," Randlett said, "and those jobs are not makeshift. We may have to hire other people; we have to get the work done."

There are several programs administered similarly which, if cut, would indirectly cost the state $1 million here or $2 million there.

To complicate matters further, the decisions being made this summer in Washington for the federal 1981 fiscal year, will affect two of the state's budgets — both fiscal 1981 and 1982 — because the state and federal fiscal years overlap. Illinois' fiscal year runs from July 1 to June 30; the federal fiscal year runs from October 1 to September 30. The budget planners in Springfield really have their work cut out for them.

Meanwhile, in Washington, the Illinois congressional delegation is trying to put some of the money back into the federal budget, but has not met with much luck, according to Randlett. "On the whole, I would say the Illinois congressional delegation is very supportive of the state, more so than other states," said Mrs. Randlett, who worked for the state of Wisconsin for four years. "They are much more defensive of Illinois than other delegations are of their states."

All of the proposals for the federal budget will leave the states with less federal money than they had before. Asked to choose between the three, Randlett quipped, "You're asking me if I want my right arm cut off, my left arm cut off, or my left leg."

July 1980/Illinois Issues/33