Governor Bruce Rauner and the state Legislature have agreed to pay for the Medicaid expansion by cutting government contracts and hiring more people.
They are also taking on $3.5 billion in new taxes.
In addition, the state is adding $1.5 million to the General Fund budget to help cover the costs of expanding Medicaid.
That’s according to a state report released Thursday by the Illinois Department of Finance and Administration.
The report also showed that the state will lose nearly $2.6 billion in government revenue due to the expansion, including about $1 billion from Medicaid and $1 million from state property taxes.
But Rauners office said in a press release Thursday that the budget cuts will pay for it.
“The budget reductions will cover $2,631,634 in operating and capital expenses and $543,878 in capital expenditures for the fiscal year ending December 31, 2020,” said spokeswoman Jennifer Coyle.
“Those additional costs are the result of a number of initiatives taken by the Governor and Legislature to make Illinois more competitive and provide Illinoisans with the health care coverage they deserve.”
“This budget is focused on providing the State of Illinois the flexibility to ensure that it continues to be able to meet the needs of Illinoisans,” Coyle said.
In a statement, Raunos office also said that the spending cuts will allow the state to focus on providing high quality health care to its residents and reduce the state’s reliance on federal and state programs.
State agencies also will receive a $5 million increase to their budgets.
There are a number new taxes and fees that will go into effect next year, including:A 1 percent increase in the state sales tax, which will go from 1.6 to 2 percent for individuals and businesses.
The state’s General Fund appropriation for the next fiscal year is expected to be $11.7 billion.
It’s expected to cover about 10 percent of the budget.
The state has already approved the first $1,000 rebate.
The governor’s office said that all but the first of the new taxes will be implemented in January.
The rest will be phased in over a two-year period, with the first tax being applied to individuals on July 1, 2019.
Governor Raunies press release about the budget reduction: The governor and the Legislature have unanimously agreed to provide additional funding to help Illinois meet its commitment to expand Medicaid and meet the growing needs of our residents.
This budget is a direct response to the governor’s plan to provide more flexibility to our state in meeting the needs and wants of Illinois families.
The Illinois Department