Pa581 Budget Analysis

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Case Analysis 2 – State of Illinois Budget
Prepared for Course PA581
Professor Richard Adamich
February 21, 2012

State of Illinois Budget Analysis
Illinois is one of the many states in the United States that is facing a financial crisis. Now is the time to pay close attention to the state budget. If taxpayers wish to know how their dollars are being spent, what issues the state faces, and where to expect program expansions and reductions, the budget can provide this information. In order to hold the Governor and other elected state officials accountable for repairing the state’s economy, one must be aware of what is going on. The State of Illinois operating budget is prepared based on a fiscal year, which begins on July 1 and ends on June 30 of the following year. Upon review of the fiscal year 2012 budget, this paper will analyze the state’s proposed initiative to address current issues the state is facing, identify major reductions and increases, and closely review the Illinois Department of Corrections. Governor's Address

The Governor’s address outlines the progress that has been made in Illinois and the goals set to face them. Last year the state was on the brink of economic depression, as a result of the United States’ financial crisis and after three decade of fiscal mismanagement. (Governor's Office of Management and Budgeting, 2012) In 2010, Illinois fourth in the nation in job growth and the unemployment rate fell in every county. Governor Quinn signed legislation last year to encourage more broadband and wireless investment; Illinois is starting to reap the benefits of these investments. (Governor's Office of Management and Budgeting, 2012) Lastly, Illinois is a major global player, and the state’s exports went up by almost 20% in 2010.

Although the state has made some steps in the right direction, there are still many issues to face going forward. The Governor expresses that budget stability is imperative for the success z2of businesses and families in Illinois, as well as an important factor in creating jobs and attracting business investment. (Governor's Office of Management and Budgeting, 2012) The outlnine of the steps to achieve a stablized budget are as follows: •Restraint

oReview all areas to find ways to reduce unnecessary state spending oPlace historic caps on state spending
oOnly use tax dollars for necesary state services
Reform
oMedicaid reform that will save money and improve health outcomes oContinued support for cost-effective programs that work, which s referred to as "budgeting or results" •Innovation
oSupport an entrepreneurial culture that captalizes on Illinois' strengths oImplement the newly formed Illinois Innovation Council
§Ths council will dentfy tartegies the state should pursue to foster innovation and eonomic growth; the group is mad p of the best business minds, aademia, and researh and development, and wll be led by the o-founder of Groupon, Brad Keywell. •Foreign Investment

oDouble exports over the next five years
oReorganize foreign trade offices
Engagng Business
oCreate a good business environment
oHost Business Roundtables to bild a system that understands the eeds of business, while protectng the rightand afety of workers •Education
oContinue to improve the education infrastructure
oIncrease unding t provide financial assistance for needy students oAbolish the legilative scholarshp program
Tax Relief and Reform
oAddress the unfair tax system of Illinois that is a regressive system oAppoint an Illinois Revenue Reform Commission that will reommend a plan to write a 21st Century tax code. (Governor's Office of Management and Budgeting, 2012)

The Governor has addressed the need to reduce spending, resulting in several suggested cuts. One suggestion is to reduce Medicaid reimbursement rates for hospitals, saving $550 million. It is also proposed that school districts be...
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