Governor Quinn: Medicaid and pension reforms a must for Illinois - Chicago News and Weather | FOX 32 News

The state of Illinois has raised the income tax, and yet the pile of unpaid bills seems to be growing. FOX Chicago's Mike Flannery sat down with Governor Quinn to ask him why that was.

"It's not getting higher. I inherited a $10 billion deficit when I became governor." Quinn said.

Quinn conceded, though, that big lenders are losing patience with Illinois. Wall St. Bond agencies are threatening to downgrade the state's credit rating by two notches, a move making it far more expensive to borrow.

Gov. Quinn: If we get down rated by one or two notches, that will cause great harm to our ability.

Flannery: Almost in junk bond status?
Gov. Quinn: It'll hurt -- It won't be there. But it'll be very difficult for our state to continue to fix the roads, build rail systems and water systems and new schools that we must have to have a strong economy.

That's why Quinn called on the General Assembly to enact his proposed reforms of Medicaid and public employee retirements. They now consume 39 percent of every tax dollar, squeezing out money that used to go for other priorities.

Gov. Quinn: Our state budget today for operations is lower, in the coming fiscal year that we're proposing is lower than it was in 2008. You know, 2013 is going to be lower than 2008. We're making billions and billions of dollars of cuts.

Quinn called on Topinka and other officers to match his nine percent cut in the governor's office budget.

Quinn has also proposed raising the tax on cigarettes across Illinois, to generate more than $3 million per year for Medicaid.

There would be an additional $1 per pack tax increase on cigarettes, bringing the tax on cigarettes alone to $1.98 per pack.

Critics say that could drive businesses out of the state, and to border states where the cost of cigarettes is lower.

Good Day Chicago asked viewers to make the call: Do you like a tax on cigarettes to help fund the Medicaid program? If you smoke, would you rather quit, than pay the tax?