Chicago Tribune - April 11, 2003
John Chase and Christi Parsons, Tribune staff reporters. Tribune staff reporters Diane Rado and Ray Long contributed to this report

Duncan, who introduced Blagojevich at a school in Little Village to launch the governor's campaign to sell his new budget to the public, had initially declared city schools a financial winner.

Later, however, school officials discovered the governor had eliminated at least $65 million in expected state payments to the Chicago Teacher Retirement System, a development that led the State Board of Education to estimated a net loss of about $19 million for city schools under the governor's plan.

Contradictions such as that were discovered as school officials and social service advocates began reviewing the details of the $52.4 billion budget plan Blagojevich had unveiled a day earlier.

Officials from the AIDS Federation of Chicago praised Blagojevich for making a "sound and compassionate investment in Illinois' future" by restoring $2 million in funding for HIV-prevention initiatives.

But The Children's Place Association, a Chicago non-profit group that received $780,000 in grants from the state this year to care for children who are HIV-infected or whose parents have the illness, found its funding eliminated.

"The only thing I can think of, and it's purely speculative, is that he didn't know what we did and he wanted to save money," said Cathy Krieger, the group's executive director.

Indeed, Blagojevich's budget slashes grants to several private agencies that care for the developmentally and mentally disabled or needy children. However, some agencies that provide such services retained their funding.

Many of those organizations whose grants were eliminated had been backed by current and former Republican leaders. The Children's Place, meanwhile, was allied with state Rep. Cynthia Soto (D-Chicago), a longtime political foe of Chicago Ald. Jesse Granato (1st), who is a sometimes fishing pal of Blagojevich's father-in-law, Ald. Richard Mell (33rd).

Grants to Elim Christian School in Palos Heights, which received $722,000 from the state in each of the two most recent budget years, were eliminated, as was $328,000 in annual funding to the Ray Graham Association in DuPage County. The two organizations, which help the developmentally disabled, were championed by former House Republican leader Lee Daniels of Elmhurst. Daniels has a developmentally disabled daughter who formerly attended Elim.

Aides to Blagojevich denied that political considerations were made in trying to deal with what the administration contends is a $5 billion budget gap through the middle of next year.

"The governor was not playing petty politics with the budget," said Blagojevich spokesman Tom Schafer. "He felt he was doing what was best for the state."

Though he did not mention it in an often detail-oriented address to lawmakers Wednesday, Blagojevich's spending plan would cut $10 million in grants for community service agencies that help developmentally disabled adults and mentally disabled children, social service advocates said.

"The governor's speech was great. But what he didn't say about community service funding was terrible," said Stuart Ferst, executive director of the Anixter Center, a North Side group that serves thousands of developmentally disabled adults with job training, substance-abuse treatment and literacy clinics.

Ferst said program funding for the developmentally disabled hasn't increased in three years. He said his own agency would lose $200,000 under the budget and would be forced to reduce services.

Janet Stover, executive director of the Illinois Association of Rehabilitation Facilities, said the grants had been eligible for federal matching funds. "We're losing potential federal money with these cuts," she said.

As for the Chicago schools, Duncan said he was "generally encouraged" by the governor's budget.

"We got an increase and we're pleased and thankful for that," Duncan said. "This is going the right way."

But an analysis by the state board released later showed that although city schools would get $79.4 million in new state dollars through increases in per-pupil spending and some grant programs, it also would lose $98.3 million because of the pension-funding cut and dollars trimmed from other grant programs.

Duncan, however, said he believed the state board analysis did not include revenue that would ultimately produce a net gain in total state funding for city schools.

And a Blagojevich spokesman said the pension reduction should come as no surprise to Duncan, because he signed off on it before the budget was released in order to get extra money for technology and other programs.

Duncan indicated that Blagojevich's budget merely represented a starting point for negotiations with Springfield.

"The devil is in the details," said Duncan, who earlier this week was seeking $250 million in additional state funds. "We're expecting more help."

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