Governor Quinn calls it a crisis in great proportions. He said stimulus money is coming to end and because of that, state funding for critical programs is in jeopardy.

Governor Quinn said the budget can be executed properly by adhering to five different startegies. Those are to cut spending; use strategic borrowing; maximize federal funds; create jobs; and improve state revenues.

But that won't be easy he said.

The budget tops $55 billion dollars. Half of the budget's money comes from federal sources and the state has no authority on how it's spent.

Before Quinn announced his cuts, he defended them by promising everyone that input from more than 13,000 citizens was used to make the budget.

To the cuts...

-$214 million reduction in state operations
-$300 million reduction in income tax revenues that go to local governments
-$300 million reduction by stabilizing pensions,
-$1.3 billion in cuts to education

He said the cuts to education were 'the most painful."

In addition to the cuts, Governor Quinn said to fix the deficit, the state has to borrow money at reasonable rates. State law requires them to pay an anual 12% interest on late payments. He also said more federal dollars are needed.

Jobs are what he called his top priority. To do that, he proposed a $2500 dollar tax credit to small businesses every time they hire someone. But the business must have only 50 employees or less. If this idea is successful, he said 20,000 jobs could be created.

All of these measures, according to the Governor, will improve state revenues.

Education cuts are not ideal according to Quinn. So that's why he's proposing an income tax increase from 3% to 4%. All the money will be used to restore the $1.3 billion dollars cut from education and pay back some of the debt the state owes to local school districts. He said it's urgent lawmakers approve the tax increase because federal money supporting education right now runs out July 1.

He left lawmakers with a decision, either approve the tax increase or defend the cuts.