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BLAGOJEVICH BUDGET: Election-year budget has programs aplenty

SPRINGFIELD - In a speech that often sounded more political than financial, Gov. Rod Blagojevich asked lawmakers Wednesday to increase state spending by nearly $1 billion as he seeks to launch a wide array of election-year education, health and public safety programs. Blagojevich proposed a major expansion of preschool programs, a new tax credit to help families pay for college and a five-year plan to support stem-cell research. He also called for ending $198 million worth of tax breaks for business, taking $144 million out of special-purpose funds and increasing cigar taxes by $10 million. The Democratic governor told lawmakers his budget offers a clear choice: Support his efforts to help children and families or side with big business and special interests. &#8220We are all in the business of choosing,” he said in a 37-minute address. &#8220What you say ‘yes' and ‘no' to defines who you are, what you stand for, what values you believe in and whose side you're on. So I'm asking you, say ‘yes' to our kids.” Republicans at times reacted to his proposals with jeers and laughter - particularly when he declared the state's pension systems in stronger shape than ever. This year's budget and Blagojevich's proposal for the next one depend on sharply reducing contributions to the troubled pensions. &#8220I think it was Enron math,” Senate Minority Leader Frank Watson, R-Greenville, said afterward. &#8220How can he say that? How can he be so outrageous?” Blagojevich has not formally launched his bid for a second term, so this speech and his State of the State address offered the first look at the likely themes of his campaign. Blagojevich reminded his audience that he inherited a financial mess when he took office. He said he avoided the temptation to raise taxes or slash vital services, instead choosing to cut the number of state employees and slow the growth in many government programs. At the same time, he said, the state put new money into key areas. &#8220We dug ourselves out of the worst fiscal crisis in our state's history. We did it while investing more in education. We did it while giving more people health care. And we did it without raising the income tax or the sales tax,” he said. Blagojevich would not answer questions after the speech. His latest budget proposal, for the year beginning July 1, includes some major new programs. -offering preschool to all 3- and 4-year-olds in the state, a plan that he expects will help 32,000 children in its first year and cost $45 million. -providing $90 million worth of tax breaks to families sending freshmen and sophomores to college. -spending $100 million over the next five years to support embryonic stem cell research. But some of the ideas he trumpeted involve little money or don't really take effect until future years. The first new proposal in the speech, for instance, was an initiative to streamline government administrative services. But that would be put in place over five years and have no impact on staffing levels in the upcoming budget. Blagojevich also discussed $10 million in grants to help schools reduce class-size but didn't point out that it is just a one-year program. Nor did he point out that his plan fails to give education half of all new revenues, something he promised to do when running for governor. &#8220Is it enough on the education front? It's not,” said Sen. Miguel del Valle, a Chicago Democrat and one of the Legislature's leading voices on education. Blagojevich's budget calls for state government to spend $55.3 billion in fiscal 2007, an increase of $950 million, or 1.7 percent. Cigar smokers would pay a higher tax, however, and businesses would lose several tax breaks, giving Republicans ammunition to renew their accusations that Blagojevich is driving jobs out of state. Some of those tax measures have come up before and been rejected, raising questions about their viability. The governor hasn't come up with any revenue source at all for another piece of the budget, a proposal to borrow money to build new schools. Blagojevich maintains his administration has helped Illinois businesses thrive and record their highest profits in a decade. That, in turn, has produced more tax revenues and spared the state another year of massive deficits, he says. Republicans mockingly cheered the claim that the deficit has been eliminated. They say Blagojevich is not counting Medicaid bills that are not being paid on time or contributions to the pension systems that are being skipped. Reacting to criticism over his handling of pensions, Blagojevich said he has come up with several ideas to provide more money. One is to give the pensions any proceeds from the eventual sale of an unused casino license. Another is to come up with more ideas to provide money. Elementary and secondary education would get an increase of more than $400 million, or 7.3 percent. Chicago's troubled schools would get $100 million of that. After years of reducing the number of state employees, Blagojevich proposes to hire about 1,100, bringing the total to 58,490. Some of those would be prison guards, including staff to open part of a prison in Thomson that has stood empty for years. Blagojevich also would hire 100 new state police. Much of his proposal is likely to pass easily. Blagojevich and Democratic legislative leaders came up with a two-year budget plan last spring, meaning many of this session's hard decisions already have been made. They have scheduled an early adjournment and seem intent on avoiding controversy. Blagojevich added a new twist to his fourth budget address. A screen behind him displayed charts and photos - of everything from doughnuts to cute children - as he spoke. &#8220It's the best campaign speech I've heard in a long time,” said Rep. Bill Black, R-Danville. &#8220His delivery was phenomenal. The PowerPoint added to the impact.”

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