While taxpayers will still be on the hook for billions in red-ink spending, the Governor’s Office said the deficit is not as bad as previously thought.

In preparing financial-disclosure documents for a planned bond sale next month, the Governor’s Office of Management and Budget (GOMB) found unexpected revenues from inter-fund transfers and federal Medicaid reimbursements. Administration spokeswoman Catherine Kelly wrote in an email: “While we are facing a much smaller hole ... it further underscores the need to pass reforms and a truly balanced budget this fall.”

The Commission on Government Forecasting and Accountability had said the budget hole for fiscal 2017, which started in July, would be $7.8 billion. The Governor’s Office this week put the deficit at approximately $5.4 billion. 
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State Rep. David McSweeney, R-Barrington Hills, said regardless of the deficit’s size, the state needs to cut spending. 
McSweeney said he hasn’t seen the details from the Governor’s Office yet, but said both numbers are unacceptable. 

“It’s not good news,” McSweeney said. “If it’s $5.4 billion or $7.8 billion, it’s an enormous exposure to the taxpayers.”

McSweeney said lawmakers should be meeting to solve the problem, starting with spending cuts, but not ending there.

“We need to reform pensions and Medicaid, and I strongly, strongly oppose a tax increase,” McSweeney said.

The state plans to sell two sets of bonds next month: approximately $1.3 billion in general obligation bonds for debt-service savings and $450 million in capital bonds for transportation projects.