Ryan cuts $109 million from budget

SPRINGFIELD, Ill. -- Gov. George Ryan cut $109 million more from the state budget Thursday as he accused timid legislators of making the cuts more painful for Illinois residents.

"They all want to stand around when we're presenting checks and handing out money for programs, but when it comes time to do the responsible thing they take a walk for fear of their re-election chances," Ryan said.

"Now is the time to step up with some leadership and be a part of the program."

This third round of cuts brings the total savings to $485 million, Ryan said. Half the latest cuts -- $54.3 million -- come from the Department of Public Aid and include more strictly enforcing eligibility rules.

The Corrections Department is losing $22.2 million. Half the money comes from freezing hiring at two facilities and eliminating higher education programs for inmates.

Ryan said no state employees are being laid off. He also asked universities to work with him on cutting their insurance costs, although he cannot make them cooperate.

The Republican governor has the authority to cut only part of the state's $53.4 billion budget as he tries to fill a shortfall of at least $500 million.

More cuts sought

He wants lawmakers to let him cut other parts of the budget, too. He argues that would spread the pain around, rather than focusing it on just a few programs.

Hospitals that serve lots of poor patients have been one of the biggest targets of Ryan's cuts so far, losing about $135 million. Ryan said broader authority would let him reduce those cuts by trimming payments to nursing homes, pharmacies and other businesses that serve Medicaid patients.

But House Speaker Michael Madigan, D-Chicago, has refused to cooperate with Ryan. He argues that Medicaid services will be targeted no matter what, so Democrats do not want to take part in cutting the budget.

Senate Republicans also rejected a Ryan proposal Thursday, said Ryan spokesman Dennis Culloton. They refused to support letting the governor reduce state support for employee health insurance at universities, he said.

State expenses are climbing, especially the cost of health care. At the same time, revenues have fallen below expectations -- something Ryan blames entirely on the Sept. 11 terrorist attacks.

"It's through no fault of our own. It's through an international incident," he said.

The repercussions of that incident threaten to make the state's budget crisis worse.

Congress is considering an economic-stimulus package that includes tax breaks for business. Since Illinois taxes are based on federal taxes, the change would reduce state revenues.

The damage could be up to $400 million, said Culloton. He said Ryan is concerned and has discussed the problem with U.S. House Speaker Dennis Hastert and Sen. Dick Durbin, both from Illinois.

The Illinois House approved a resolution Thursday urging Congress not to pass a stimulus plan that would harm the state.

One budget problem appeared near solution. The Senate sent to Ryan a bill that would fill a $30 million gap in the Teachers Retirement Insurance Program, which covers 44,000 former instructors.

The plan increases retiree premiums and contributions from active teachers. For the first time, it asks school districts to kick in, but borrows $60 million from the teachers pension system for two years to help districts slowly adjust their budgets.

Ryan's first two rounds of cuts, totaling $381 million, minimized the effect on needy people, said Leonard Lieberman, lobbyist for the Jewish Federation of Chicago. Ryan focused on cutting government operations rather than grants that directly pay for services, he said.