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Illinois Faces $9 Billion Budget Deficit

SPRINGFIELD, Ill. (CN) - The news keeps getting worse for Illinois. Comptroller Dan Hynes told new Gov. Patrick Quinn that Illinois will face a $9 billion budget deficit by midyear if nothing changes. Hynes said that Illinois' troubles are partly due to the economic downturn and partly to Rod Blagojevich, who was booted from office last week.

Hynes told reporters that Blagojevich spent money that the state didn't have on pet initiatives, while failing to address rising pension obligations and other fiscal problems. Hynes said as much as $3 billion could be recouped through the pending federal stimulus package, but even then the state will be paying its bills late, if at all, without dramatically reduced spending or increased revenues.

"The bottom has dropped out," Hynes said.

Quinn hasn't ruled out the possibility of a 3 percent flat-rate income tax to address the situation. During his 6-year tenure, Blagojevich refused to raise taxes even as he increased state spending on health care and other projects.

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