Understanding Government

Pat Quinn

In a major breakthrough yesterday, the Senate overcame a filibuster on a bill to provide $26.1 billion in Medicaid and education assistance to state governments.  The House is now expected to return from its August recess to pass the legislation, and President Obama should sign the bill before the 2010-11 school year begins — averting some teacher layoffs. The money will help Illinois, which has an estimated $12 billion budget deficit – the worst budget situation in the nation. But how exactly does the state benefit?

Gov. Pat Quinn is just starting to announce state budget cuts. Doug Finke of the State-Journal Register reports on $895 million in reduced spending outlined by the governor. This includes reduced funding for school transportation and less money for psychiatric hospitals. Now Quinn could use the federal money to reverse course on these cuts. Indeed, most states will apply federal assistance to prevent such program reductions. Illinois, though, is a special case – the state is so far in debt that its wisest course of action might be to start repaying state lenders.