Quinn Proposes Cuts, Tax in Budget Address

Chicago - The next step in the state's cash crisis came Wednesday at noon, when Governor Quinn laid out his solution during his budget address to the General Assembly.

Quinn was expected to propose a $4.7 billion loan to help bridge the massive $13 billion budget gap, and he was expected to call for budget cuts .

The largest was expected to be a $1.3 billion cut in education, which would mean 13,000 public school teachers and staff members would lose their jobs. However, Quinn in his budget address proposed an increase of 1 percentage point in the state income tax, which he said would be enough to avoid the $1.3 billion in education cuts.

Prescription drug benefits for the elderly would be cut in half.

Local governments would lose their share of the state income tax, which is $300 million a year, which Mayor Daley called a political double-cross .

An aide to the governor says an increase in the state income tax will not be part of Quinn's budget plan.

The governor favors a tax increase but a decision will probably wait until after the fall election.

“It's just kicking the can down the road. We've got to face up to the fact that we're spending more money than we have,” said State Sen. Matt Murphy (R-Palatine).

“There's a great tension now between delivering core government services and funding government employee pensions,” said John Tillman, of the Illinois Policy Institute.

Watch the entire speech, Part 1:

Watch the entire speech, Part 2: