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Thursday 29 March 2012

Illinois House approves austere spending limits

(AP) ? Virtually every part of state government would be forced to cut spending under a budget outline approved Thursday by the Illinois House, where even supporters called it a "painful, painful" decision. The spending plan calls for slashing billions of dollars from the Medicaid health program. Officials acknowledge they don't know how they'll reach that target, but it's likely to involve eliminating services such as dental care or prescription drug coverage for adults. The situation has grown desperate because revenues have been stagnant for years, but state expenses for health care and government pensions are climbing dramatically. Thanks to years of skimping on pension contributions, Illinois now has to quickly make up ground to keep the retirement systems healthy. Once obligations like pensions, overdue bills and Medicaid are addressed, the spending outline leaves $16.3 billion to operate the rest of government.

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