NCPA - National Center for Policy Analysis


March 8, 2007

Illinois Gov. Rod Blagojevich on Wednesday proposed a record $60.1 billion budget reliant on the largest tax increase and biggest borrowing spree in state history.  The funding plan contains no property tax relief and relies on a controversial major tax increase on businesses, say observers.

Highlights of Gov. Blagojevich's budget proposal for fiscal year 2008, which starts July 1:

  • Bottom Line: $49.1 billion in operating expenses, an increase of 7.4 percent, plus $11 billion in construction and maintenance costs.
  • Where It Goes: 38.7 percent to education; 29.2 percent welfare; 20.1 percent human services; 5.4 percent public safety; 3.6 percent government services; 1 percent economic development; 0.3 percent business and environmental regulation.
  • New Money: $3.6 billion, including $900 million in natural tax-revenue growth.
  • Education: $1.5 billion in new funding, a 23 percent increase; another $1.5 billion in construction funds would help districts build new schools and repair old ones.
  • Pensions: More than $27 billion would be placed in government retirement systems, bringing them to 83 percent of full funding; most of the money would come from a $10 billion plan to privatize the lottery and $16 billion in bond sales.


  • The governor's tax-and-spending plan also contains a large-scale health care expansion designed to eventually let most of the state's 1.4 million uninsured adults obtain coverage.
  • The $60 billion budget -- a new state record for spending if enacted -- also calls for selling the Illinois Lottery and borrowing $16 billion to shore up the shaky state worker pension system, a new payroll tax on companies that don't offer health care to employees and revamping riverboat casino taxes.
  • But the Regional Transportation Authority would not receive a requested bailout, and it'll be up to lawmakers to propose a way to pay for a transportation-centered capital spending plan.

Source: Dave McKinney Whitney Woodward, "Largest tax hike in state's history; Cool reception for gov's $60 bil. plan that boosts schools, health care," Chicago Sun-Times, March 8, 2007; based upon: Christopher Wills, "Blago pushes $7 billion tax hike," Associated Press/Elgin Courier News, March 8, 2007.


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