State of the State

The state of the State

By DIANE ROSS

Bottom lines
in the
state budget

FORGET what you've heard about Gov. James R. Thompson's $14.2 billion budget for fiscal 1983 setting low spending records for the State of Illinois. Thompson's budget may well set low records for appropriations, as he boasted, but it does no such thing for spending, as the media apparently believed. Spending in the general revenue funds, the state's checkbook account, is up $454 million according to Thompson's budget.

How does the governor propose to spend an additional $454 million in general funds next year? Here's the breakdown his Bureau of the Budget (BOB) provided:

• $126 million more to elementary education; however, that's only the last of the fiscal 1982 payments of state aid to schools (see "The state of the State," February 1982).

• $103 million more to public aid to offset a projected 5 percent, $125 million, increase in costs in fiscal 1983 due to inflation.

• $80 million more in transfers to other accounts: local government's share of the state income tax (to the Local Government Distribution Fund) and the state sales tax (to the Road Fund). The budget presumes that a slight improvement in the economy will produce a slight increase in the tax revenue.

• $26 million more in state income tax refunds.

• The remaining $119 million is split among hikes to mental health, corrections, children and family services, and other agencies which reflect Thompson's budget priorities in this election year.

So where does that leave the state's three biggest spenders — education, public aid and transportation? Thompson's budget proposes to:

• Cut elementary and secondary education by $69.2 million, or 2.6 percent, bringing it down to $2,565 billion (that includes a $36 million cut in general funds).

• Hike higher education by $17 million, or 1.4 percent, bringing it up to $1,215 billion (but that includes an $18 million cut in general funds).

• Hike public aid by $94.7 million, or 3.2 percent, bringing it up to $3,036 billion (includes an additional $103 million in general funds).

• Cut transportation by $171.7 million, or 7 percent, bringing it down to $2,294 billion (includes a $4.8 million cut in general funds).

In March, the governor appeared to dismiss the crescendo of voices suggesting a change in the income tax to bring in more state revenue. Thompson shrewdly suggested the General Assembly raise the state liquor tax — if the legislature wants to restore the cuts he made in elementary education. That was an all-too-obvious election-year strategy that infuriated the Democrats: the hike would yield roughly what Thompson cut. Likewise the governor suggested the legislature expand the base on the state tax on insurance companies — if they want to bring the mental health budget up to the level he believes is necessary. (Thompson "suggested" taxing Illinois-based firms at 2 percent of their gross premiums receipts; out-of-state firms already pay such a tax.) The insurance tax apparently won't solve the mental health problem, though. The governor's budget closes three state facilities (Dixon, Adler and Bowen) during fiscal 1983, but Thompson did not so much as hint that new insurance tax could keep them open.

14/May 1982/Illinois Issues