Gov. Pat Quinn recommended $6.78 billion be spent from the general revenue fund for education. Between Quinn's recommendation and what the House is working with is a $290 million drop.

Union officials say they have grown weary of Quinn's efforts to rally business leaders behind his ideas and his use of agency directors and state government resources to argue that basic state government functions will suffer unless something is done about pensions.

The Illinois State Senate approved legislation that would require retired state workers to pick up more of the costs of their health insurance.

Mayor Rahm Emanuel took his case for pension reform directly to rank-and-file members whose contributions he wants to raise and whose retirement benefits he's proposing to cut.

Complicating a complicated situation, the Illinois constitution forbids revoking pension benefits, but health care isn't included, supposedly, so the governor hopes to skirt the constitution by offering retirees a Hobson's choice - accept the new plan with the cuts or keep the old system but lose your health care.

A new wrinkle in Illinois' budget crisis unfolded Wednesday when Gov. Pat Quinn's administration said it has begun to delay payments to more than 40,000 child-care providers.

An Illinois Senate committee rejected a measure that would force local government to pick up the tab when it gives an ex-lawmaker a big paycheck to fatten his pension.

Teacher and public-employee pensions are in the news nationwide, and Michigan's are not unique. Across the country, pension funds are suffering from the same confluence of factors, including rising health-care costs, falling returns on investment, lax oversight and more.

Gov. Pat Quinn challenged lawmakers to approve a $1-a-pack increase in the cigarette tax and accept major cuts in Medicaid, but many Democrats and Republicans view the plan as more a work in progress than a final deal.

Gov. Pat Quinn today unveiled his plan to cut public pension costs, calling on government workers to pay more, the retirement age to be raised and cost-of-living adjustments tightened.

Union officials say they have grown weary of Quinn's efforts to rally business leaders behind his ideas and his use of agency directors and state government resources to argue that basic state government functions will suffer unless something is done about pensions.

The Illinois State Senate approved legislation that would require retired state workers to pick up more of the costs of their health insurance.

Mayor Rahm Emanuel took his case for pension reform directly to rank-and-file members whose contributions he wants to raise and whose retirement benefits he's proposing to cut.

Complicating a complicated situation, the Illinois constitution forbids revoking pension benefits, but health care isn't included, supposedly, so the governor hopes to skirt the constitution by offering retirees a Hobson's choice - accept the new plan with the cuts or keep the old system but lose your health care.

An Illinois Senate committee rejected a measure that would force local government to pick up the tab when it gives an ex-lawmaker a big paycheck to fatten his pension.

Teacher and public-employee pensions are in the news nationwide, and Michigan's are not unique. Across the country, pension funds are suffering from the same confluence of factors, including rising health-care costs, falling returns on investment, lax oversight and more.

Gov. Pat Quinn today unveiled his plan to cut public pension costs, calling on government workers to pay more, the retirement age to be raised and cost-of-living adjustments tightened.

Mayor Rahm Emanuel said the state and city have reached "a moment of truth" on the issue of vastly underfunded public employee pensions. "The workers and taxpayers have done everything asked of them," the mayor said. "The people in a responsible position have not."

A conservative think tank has proposed an alternative state budget that would cut wages for state employees by 10 percent; require retired workers to pay for their own health care premiums; and force local school districts to fund teacher pensions, instead of the state.

If Illinois enacted pension reform, the state could limit the expansion of required pension contributions and find some money to spend on actual government services, or even roll back a part of the massive income tax increase that the state enacted in 2011.

Proposals to tax Internet retail sales are all the rage as states continue to look for more ways to balance their budgets in the face of revenue shortfalls.

To reestablish Illinois as an economic powerhouse, the Institute has proposed "Budget Solutions 2012," an alternative that does not rely on the state's recent tax hikes as a revenue source, does not include borrowing and has positive cash flow for fiscal year 2012 - all while funding core services the poor and disadvantaged rely upon.

Paper suggesting a variety of ways to fixing state budgets in crisis, including freezing or slowing public employee salary growth, privatizing infrastructure and state operations, eliminating prevailing wage and placing constitutional limits on taxing and spending.

A detailed, comprehensive alternative budgeting plan addressing Illinois' immediate financial problems focused on three key elements: spending reallignment, right-sizing government labor costs and pension fund reform.

Union officials say they have grown weary of Quinn's efforts to rally business leaders behind his ideas and his use of agency directors and state government resources to argue that basic state government functions will suffer unless something is done about pensions.

The Illinois State Senate approved legislation that would require retired state workers to pick up more of the costs of their health insurance.

Mayor Rahm Emanuel took his case for pension reform directly to rank-and-file members whose contributions he wants to raise and whose retirement benefits he's proposing to cut.

Complicating a complicated situation, the Illinois constitution forbids revoking pension benefits, but health care isn't included, supposedly, so the governor hopes to skirt the constitution by offering retirees a Hobson's choice - accept the new plan with the cuts or keep the old system but lose your health care.

An Illinois Senate committee rejected a measure that would force local government to pick up the tab when it gives an ex-lawmaker a big paycheck to fatten his pension.

Teacher and public-employee pensions are in the news nationwide, and Michigan's are not unique. Across the country, pension funds are suffering from the same confluence of factors, including rising health-care costs, falling returns on investment, lax oversight and more.

Gov. Pat Quinn today unveiled his plan to cut public pension costs, calling on government workers to pay more, the retirement age to be raised and cost-of-living adjustments tightened.

Mayor Rahm Emanuel said the state and city have reached "a moment of truth" on the issue of vastly underfunded public employee pensions. "The workers and taxpayers have done everything asked of them," the mayor said. "The people in a responsible position have not."

A string of recent high profile public official corruption cases have brought the topic of pension forfeiture to the debate roundtable.

A conservative think tank has proposed an alternative state budget that would cut wages for state employees by 10 percent; require retired workers to pay for their own health care premiums; and force local school districts to fund teacher pensions, instead of the state.

This all boils down to who gets to pick taxpayers' pockets first, public pensioners or municipal bond investors? More people are waking up to the hard reality that when it comes to state and local government, somebody has to lose money over the next few decades. The National Association of Bond Lawyers is worried enough about it to issue "Considerations" for advising clients who think they're getting safe investments.

Despite an organized campaign to stop public pension reform, reality is beginning to break through.  One recent report outlines a possible path to long-term solutions and another details the necessity of states and municipalities finding their own way because federal bailout is impossible.  And Chicago Mayor Rahm Emanuel released a plan that could have been based on both reports.

Hey, young public employees, what are you going to do when your pension checks bounce after you paid in for decades? That is what will happen in many - maybe all - states and municipalities sooner or later if they do not reform right now. If you want to see the future, just look at Illinois. One citizen there did, and came up with a real reform plan that might work.

Public employees should take their pension money now and run to avoid risk of getting reduced benefits - or nothing - in the future. It's the best deal for them and for taxpayers. A growing chorus of credible voices including the Government Accountability Office, a Federal Reserve bank and now the Harvard Kennedy School Mossavar-Rahmani Center for Business and Government confirm state and local government finances are "spiraling out of control" and even draconian reforms only make it "more likely" that future benefits will paid in full.

Hey, young public employees, what are you going to do when your pension checks bounce after you paid in for decades? That is what will happen in many - maybe all - states and municipalities sooner or later if they do not reform right now. If you want to see the future, just look at Illinois. One citizen there did, and came up with a real reform plan that might work.

This is what it sounds like when the Federal Reserve Bank screams: "Much has been written about the various headwinds restraining economic activity over the near term. However, our economy also has other headwinds to confront over the medium- to-longer-term. ... the finances of some state and local governments are also under stress and in need of serious adjustments."  - Federal Reserve Bank of Cleveland President Sandra Pianalto

Chicago Mayor Rahm Emanuel attempts to reform pensions for public employee unions while financially supporting the recall elections against Wisconsin Governor Scott Walker for enacting similar reforms.

A string of recent high profile public official corruption cases have brought the topic of pension forfeiture to the debate roundtable.

As state lawmakers struggle to close budget gaps and reduce deficits, many are scrambling to find new sources of revenue, often in the form of new taxes. To bolster revenue, states like Texas and Illinois are honing in on a new type of tax, a "skin" tax, aimed at strip clubs in the state.

On February 14^th, we celebrate love, family, and our partners. When it comes to celebrating partners, state governments have a number of Valentines. Because state governments continue to award the sweetest deals to their sweethearts, big business, they are never alone in love on Valentine's Day.

Despite the sunny rhetoric the Illinois budget office spouts, the outlook is hardly so rosy. The budget issues are apparent: the state is drowning in debt and now has unpaid bills running into the billions. But the problem appears larger than just overspending. The problem, it seems, is that principled business and budgeting practices simply do not exist in Illinois.

Michigan directly tackled its pension problem in 1997 by replacing the traditional "defined-benefit" pension plan with a 401(k)-style "defined-contribution" retirement plan for new state employees. The Michigan reforms have been immensely successful. Unfortunately, the story in Illinois is not nearly as encouraging.

Not only will agricultural subsidies legislation disproportionately affect the budgets of Heartland states, it also may play a more influential role in the upcoming Presidential election than a cursory count of electoral votes and voting trends indicate. 

It will come as little surprise that Illinois finds itself in a harsh fiscal crisis, with a state debt of $120,743,173,392. What might be more shocking is that the Land of Lincoln is home to both staggering debt and a constitutional balanced budget requirement. 

Illinois, unable to marshal the political will to set aside money for workers' pensions, keeps doing nothing, apparently hoping the pension mess will fix itself. But that never happens, of course. Instead, it just gets worse.

The third part of a three part series exploring the budget process in Illinois, which is set up to be transparent from the beginning.

An overview of the governor's role in Illinois' budget process.

An overview of the legislative process in Illinois and the importance of transparency in that process.

After Republican leaders made it clear they would not support his plan to borrow $8.75 billion, Gov. Pat Quinn  stated that he is focused on emergency borrowing of "about $2 billion" to pay off health care debts.

It's not entirely clear whether $33.2 billion or $35 billion will end up being the final price tag on running the state.

Illinois Democratic Governor Pat Quinn presented his budget address last week, but it is unclear whether it will be enough to solve the state's budget woes.

Now, when nearly every state is tottering on the edge of a fiscal cliff as they try to balance their budgets, public sector workers are being forced to shoulder a share of the financial burden.

Someone should tell the unions (in Wisconsin, at least) that there is a new sheriff in town.  And he's not afraid to call in the National Guard to quell unrest among state employees.

Lame duck Chicago Mayor Richard Daley prefers a less steep, and less complete, solution to the pension problem than that in proposed legislation.  He wants 50 years to get the police and fire pension funds to a point where they have assets to cover 80 percent of their outstanding liabilities.

Is it possible that Illinois needs an income tax increase?

Fiscal stress and strain continues in the fifty states this week as more legislators look for ways out of the black holes in which they find themselves. Solutions sought by states include delayed retirement, increased pension contributions, and furloughs.