Illinois Governor Proposes Own Economic Stimulus Plan, Yet Cuts Funding for TBED Programs

Gov. Rod Blagojevich unveiled a $25 billion capital plan supporting, in small part, several energy and technology projects, while at the same time eliminating funding in his fiscal year 2009 operating budget for several TBED-related programs within the Department of Commerce and Economic Opportunity (DCEO).

 

The bulk of the spending for the governor’s Illinois Works proposal would be spent on road and bridge construction ($14.4 billion), with $1.1 billion earmarked for both higher education and energy and technology projects. Gov. Blagojevich said during his Budget Address that the plan – which requires $11 billion in new state funds – would be funded primarily through a brief sale of the state lottery, which is expected to generate $10-12 billion. Of that amount, $7 billion would be used to fund the capital plan, and the state would issue bonds for another $3.8 billion, according to the governor’s office. The proposal invests in new and existing programs within DCEO, including:

• $77.5 million for development of coal gasification plants;
• $25 million for construction of conventional ethanol, cellulosic ethanol and biodesiel production facilities; and,
• $6 million for the addition of several hundred E-85 pumps at fueling stations statewide.

The capital plan also includes funding for two projects at the University of Illinois Champaign-Urbana that won grant funding from the National Science Foundation (NSF). Gov. Blagojevich recommends $60 million for planning and construction of a new major research supercomputing facility, augmenting a $208 million commitment over the next four years from NSF. Pending an $18.5 million NSF award, the governor recommends $2 million for the University’s Information Trust Institute to provide state assistance in the procurement and development of the Center for Pervasive Health Technology. Additional proposed funding includes:

• $17 million for the Illinois Accelerator Research Center to provide assistance to Fermi National Accelerator Laboratory for construction of a laboratory and office facility; and,
• $13 million in continued funding for Argonne National Laboratory to establish an Advanced Protein Crystallization Facility.

Lawmakers also will reconsider a proposal within the capital plan to create a $100 million Illinois Community Assets Fund, which they rejected last session. The venture fund would be used to issue small loans to businesses in distressed areas through financial institutions and community development organizations (see the March 12, 2007 issue of the Digest).

 

Gov. Blagojevich also announced a proposal to cut business taxes to encourage companies to sustain employment and hiring during the current economic downturn. Illinois businesses that pay the corporate income tax for 2007 and maintain their employment levels are eligible to receive a 20 percent tax cut under the plan. The proposal would be paid for by securitization of state revenues, such as tobacco settlement funds, according to the governor’s office.

 

The governor’s recommended funding level for DCEO in FY09 is $55.2 million in general funds, down from $79.5 million enacted in FY08. Gov. Blagojevich recommends the same funding level as last year for both the Entrepreneurship Centers ($5 million) and the Illinois Technology Enterprise Corporation Program ($435,800). However, no funding is included for several programs that the governor line-item vetoed last year, including the Illinois VENTURES initiative, the Innovation Challenge Grant Program and the Entrepreneur-in-Residence Program. Additionally, no funding is included for the Manufacturing Extension Centers, a decrease of $500,000 over last fiscal year.

 

Gov. Blagojevich’s FY 2009 budget recommendation and capital plan is available at: http://www.state.il.us/budget/