Analysis of the Governor's Fiscal Year 2010 Illinois General Fund Budget Proposal

The state's unemployment rate, which hit 8.6 percent this month, is at a 15 year high and expected to climb.  The housing market has weakened, with permits for new construction down 50 percent from last year, and major job losses are expected to continue in manufacturing, construction and retail. 

When unemployment is high and businesses are struggling, even well designed state fiscal systems generate less tax revenue, especially from those revenue streams most tied to the economy, like income and sales taxes.  The problem for Illinois state government is that it has a poorly designed fiscal system that struggles to generate adequate revenue—even during normal economic growth cycles.  Due to the recession and the state's ongoing structural deficit, Governor Quinn faced budgetary challenges unlike ever before when preparing his Fiscal Year (FY) 2010 budget proposal. Governor Quinn introduced his proposed budget on March 18, 2009.