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Illinois leaders project budget cuts, layoffs without federal aid

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SPRINGFIELD, Ill. - Governors across the country are calling on Congress to pass another federal relief package to help state and local governments. Earlier this spring, state lawmakers passed the FY 2021 budget with a plan to borrow $5 billion from the federal reserve to help cover up a lack of revenue during the COVID-19 pandemic. Now, Illinois desperately needs more aid from Congress to pay the debt.

This financial dilemma has been on the radar for many since lawmakers passed the state's emergency budget in May. But what happens if the federal government doesn't provide relief? Discussions are at a standstill in the nation's capital. As Democrats want to move forward with a relief plan, Republicans aren't coming to the table. That's leaving governors with tough decisions to change their budget picture drastically.

"If the Republicans continue to take the stand that they've taken, including the Republicans in the Illinois delegation, against support for local governments and state governments, then we're going to have to make drastic cuts," Gov. JB Pritzker explained Wednesday. "I mean, I've said that many times."

Control over the budget

Pritzker often speaks with other members of the National Governors Association, Democrat and Republican, who are in the same position. But the governor isn't the only Illinois leader concerned about the stalemate in Washington.

"If the federal government can't come together and find some sort of agreement to help the states in the next few weeks, then I think the governor has to exercise some control over the budget to make sure it ends up balanced," Treasurer Michael Frerichs said Wednesday.

Comptroller Susana Mendoza agrees. She touched upon the problem in the latest issue of her Fiscal Focus Magazine. "The federal government must realize states cannot simply tax or cut their way out of systemic fiscal problems resulting from the COVID-19 coronavirus pandemic," Mendoza wrote.

Without that federal aid, Pritzker says layoffs are inevitable, and the impact would go beyond state employees.

"It would be so many people who do ancillary work in private industry that is beneficial to state government," Pritzker emphasized. "There would be layoffs really across the board."

For now, all eyes are on Washington to make the next move.

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Mike Miletich

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