Illinois’ projected budget shortfall is expected to increase over the next three years as the income tax increase expires and pension contributions increase. The governor must release three-year projections of revenue and expenses annually under new rules designed to improve the budgeting process. It shows state pension contributions increasing to $5.9 billion annually by Fiscal Year 2015, up from this year’s $4.1 billion.
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Kelly Kraft, spokeswoman for the governor’s budget office, says small operational cuts have been made, but more serious cuts must happen. “These are real savings that we are talking about here, but then when you take a look at the pension costs, as well as the increasing Medicaid costs, those costs are billions of dollars that we’re talking about,” she says. Kraft says the projection doesn’t include debt restructuring, but does set extra revenue aside to pay old unpaid bills. She says the governor will continue to push a borrowing plan to pay off bills at a lower interest rate.