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The Federal Economic Recovery Plan and the State Fiscal Crisis

In early February, the Illinois Office of the Comptroller issued a sobering assessment of the state’s fiscal condition. The cumulative General Funds budget deficit for FY 2009 and FY 2010 is expected to reach nearly $9 billion.1 At the federal level, the American Recovery and Reinvestment Act, signed into law by President Obama in mid-February, includes several provisions that will provide significant fiscal relief for Illinois. Even with federal assistance, however, the state’s two-year budget deficit will exceed $5 billion. In order to avoid massive budget cuts that could decimate a wide range of critical programs for children, families, and communities, policymakers must take advantage of the available federal aid, but they must also recognize the need to generate new state revenue and improve tax fairness. Download and read report

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