Friday, March 01, 2013

Sequester would make Illinois' bad budget situation worse

By Jamey Dunn

Days before Gov. Pat Quinn is scheduled to present his budget plan for the next fiscal year, the reality is setting in that federal spending will be cut across the board.

A plan, referred to as the sequester, to cut $85 billion from the federal budget is expected to kick in. The cuts were meant to force a compromise on deficit reduction measures that would have averted the draconian and widely unpopular reductions, but Congress and President Barack Obama’s administration were unable to work out a deal before today’s deadline. Obama today called the cuts “arbitrary” and “dumb.” The president told reporters in Washington D.C.: “Now, what’s important to understand is that not everyone will feel the pain of these cuts right away. The pain, though, will be real. Beginning this week, many middle-class families will have their lives disrupted in significant ways.”

U.S. House Speaker John Boehner said at a Washington, D.C,. news conference today that “there are smarter ways to cut spending.” However, he said that his chamber had done its part to avert the cuts. “The House has laid out a plan to avoid the sequester. I would hope that the Senate would act.” He added that “discussion about revenue .. .is over.”

Boehner said he would move next week to ensure that the government does not shut down when current spending authority is scheduled to end on March 27. “I did lay out that the House is going to move a continuing resolution next week to fund the government past March 27,” Boehner said today after a meeting with the Obama administration produced no solution to stop the sequester. “And I’m hopeful that we won’t have to deal with the threat of a government shutdown while we’re dealing with the sequester at the same time. The House will act next week, and I hope the Senate will follow suit.” Many hoping for a sequester deal had looked to the March 27 deadline as a potential opportunity for a compromise to avert the cuts.

If a deal is reached soon, much of the brunt of the cuts could still be avoided. However, if the sequester remains in place, Illinois would lose:

  • $33.4 million for primary and secondary education.
  • $24.7 million for educating children with disabilities.
  • $6.4 million in funds for environmental protection.
  • $3.5 million for substance abuse treatment.
  • $1.4 million for job placement programs.
  • $764,000 in food assistance for seniors.
  • $587,000 in law enforcement and public safety grants.
  • $357,000 for children’s vaccinations.
  •  $273,000 programs that serve victims of domestic violence.

According to the Obama administration, cuts to the Head Start program would mean that more than 2,700 children in Illinois could lose access to preschool. Education cuts would put more than 700 educator’s jobs at risk. The state will also be subject to national reductions in military spending. If federal layoffs kick in as scheduled in April, travelers at airports, such as Chicago’s O’Hare, could see long wait times. (For more information on Illinois and a comparison of all the states, see this handy breakdown from The Washington Post.)

 But Illinois will not be hit as hard as some states. According to an analysis from the Pew Center on the States, the cuts would be equal to of 2.5 percent of Illinois’ Gross Domestic Product. That compares with states such as Virginia, where the cuts would equal almost 20 percent of GDP. States such as Virginia, with high levels of defense spending, will be especially hurt by the $43 billion in defense cuts called for under the sequester. (For more information, see this analysis from Pew.)

While the federal cuts in Illinois may not be as dire as in some other states, Illinois is heading into an especially difficult budgeting year. Growing pension costs are putting pressure on other areas of spending. The pensions contribution for Fiscal Year 2014 would be more than $6 billion, and the state is projected to have more than $8 billion in unpaid bills by at the end of the current fiscal year. Quinn’s budget office did not return a request for comment on the sequester. Quinn is scheduled to give his budget address on Wednesday.

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