Weekly Review

Governor Blagojevich has signed Senate Bill 790 into law. The bill outlines transfers of $221,250,000 from special state funds to the General Revenue Fund (also known as fund sweeps).

However, the Governor has still not taken any action on the companion appropriations bill, SB1103. SB1103 outlines how the state should use the funds in SB 790. Spending in SB 1103 is intended to restore some of the $1.4 billion in cuts the Governor made to the fiscal year 2009 budget.

Which funds were swept? How much will be transferred from the fund? Read SB 790 here.

FUND SWEEPS
Special State Funds are various, smaller funds identified and held in the State Treasury as "special funds" under in Section 5 of the Illinois Finance Act restricted in use to the specific purpose for which they were created.

There are over 300 of these special state funds that support activities as diverse as medical assistance and environmental cleanup. They are, for the most part, designed as segregated accounts, restricted in use and funded from specifically earmarked revenue or fee sources. Examples include the Illinois Affordable Housing Trust Fund, the Youth Drug Abuse Prevention Fund and the Brownfields Redevelopment Fund.

Since FY 2003, the state has transferred almost $1 billion from these Special State Funds to the General Revenue Fund. However, this is not new revenue, it is simply a transfer of revenue from Special State Funds into the General Fund. This revenue swap would not be available next year without legislative approval.

Read more about how the state transfers revenue from special use state funds to the General Fund on page 25 of the CTBA report, Citizens Guide to the Illinois State Budget and Tax System. The report contains a wealth of information on all of these budget issues.

Background
Governor Blagojevich announced that 450 state workers will be laid off along with the closure of 12 historic sites and 11state parks as a result of the $1.4 billion in cuts he made to the fiscal year 2009 budget.

Four departments will be hit with the lay offs, including 300 positions at the Department of Children and Family Services, 75 at the Department of Human Services, and another 75 from the Department of Natural Resources and the Historic Preservation Agency.

According to the State Journal Register (SJ-R), the lay offs will be effective December 1st. The historic sites will close Oct. 1st and state parks Nov. 1st.

The union that represents the laid off workers, the American Federation of State, County and Municipal Employees (AFSCME) along with state lawmakers told SJ-R the layoffs and closings were unnecessarily heavy just a couple of months into the new budget year that began July 1.

"Every time I think he can't do something worse, he does," Sen. Larry Bomke, R-Springfield, said of the governor.

AFSCME warned that the cuts will put abused children and needy families at risk and further hurt parks and historic sites. It urged lawmakers to return to the Capitol soon to try to reverse them.

"These cuts are irresponsible, and they are deep," AFSCME executive director Henry Bayer said.

Department of Natural Resources spokesman Chris McCloud told the SJ-R, "This is a tough day for DNR and Illinois." Jonathan Goldman, executive director of the Illinois Environmental Council, said state parks had about 45 million visitors last year, and the resulting loss in economic activity probably will outweigh any savings.