CHICAGO - Gov. Jim Edgar yesterday signed into law a $1.4 billion Medicaid assessment plan, the first component he is slated to review of Illinois's $28.4 billion all funds budget plan for fiscal 1993.

The governor will take action on the budget plan's other components today, according to his press office.

The Medicaid legislation is considered crucial to the budget measure but kept the General Assembly from approving the plan until Thursday night, almost two days into the fiscal year. It involves levying $735 million of taxes on hospitals and fees on nursing homes to gain a 50% match in federal funds.

House Republicans sent budget deliberations into overtime after they initially refused to support a fee charged to private nursing homes, claiming it would be unfair to elderly patients. They compromised by agreeing of grants to private nursing homes of up to $2,000 per year.

George Hovanec, the state's deputy budget director, said his office is sifting through the budget bills to determine of the $28.4 billion all funds and $13.2 billion general revenue fund budgets are balanced.

The Edgar Administration has said the state faces a $1.4 billion budget shortfall in fiscal 1993.

The budget plan passed by the legislature is designed to plug a hole caused when legislators turned down a number of the governor's revenue proposals. it taps a number of one-time revenue measures and increases revenue assumptions $90 million over Gov. Edgar's budget revenue estimates.

The legislature rejected Gov. Edgar's plans to increase taxes on liquor and tobacco and to renege on last year's legislative agreement giving $237 million from a 10% temporary income tax to local governments. The governor had hoped instead to direct that money to state coffers.

Now, the budget gives local governments their full 75% share of the income tax money, but phases in the payment of part of that money over an 18-month period instead of 12 months, giving the state $40 million of the money for the current fiscal year.

The legislature's budget also calls for refunding $289 million of general obligation bonds for an upfront savings of $12 million takes $25 million of excess revenues from the Build Illinois sales tax revenue bonds fund, uses $20 million of unclaimed state lottery prizes, and incorporates $22.6 million of other, smaller one-time measures.

Legislators additionally agreed to eliminate general assistance for employable adults, for a savings of $76.4 million, replacing it with an essentially unfunded program to pay people to learn job skills.

The budget also makes $130 million more in program cuts than the approximately $700 million called for in the governor's budget, but increases funding to primary and secondary education by $30 million.

In a press statement released last week, the governor called the budget "generally acceptable," but warned that the deeper cuts in state programs made by the legislature could cause "stress fractures in the delivery of essential state services."

Still, Mr. Hovanec said, the budget office expects the state to end the fiscal year with a $200 million balance that is $69 million more than the yearend balance for fiscal 1992. He added that the budget should begin to decrease the amount of bill payments deferred into the next fiscal year from the record $900 million to $1 billion estimated for the current year.

Under a practice called lapse period spending, the state may use revenues from the first three months of the upcoming fiscal year to pay expenses incurred in the current fiscal year.

"This budget, while it makes some progress on lapse period spending and the fund balance, is not going to make the world wonderful by next June," Mr. Hovanec said.

The state's practice in recent years of spending more money than it was taking in, added to the lack of a sizable financial cushion, led ratings downgrades last year to AA from AA-plus by Standard & Poor's Corp., and to Aa1 from Aaa by Moody's Investors Service.

In February, Standard & Poor's assigned a negative outlook to Illinois's GO rating because the state could not solve its financial imbalance.

Officials at the rating agencies said this week they would be reviewing the budget as soon as they receive the necessary information from the state. The reaction by the rating agencies to the state's fiscal plan may come as soon as next month, when the agencies will rate an Illinois GO bond issue of up to $250 million that the rate state plans to sell competitively.

As for bonding, the budget approved by the legislature increases the state's GO bond authorization by $630 million. That includes $289 million of refunding bonds and $130 million for a five-year capital spending plan for airports, according to Mike Colsch, division chief of economic analysis and debt management in the state's budget bureau.

The Illinois Development Finance Authority was given a $1 billion boost for environmental projects. Ron Bean, the authority's executive director, said the new bonding authority would be used of finance the solid waste components of sulphur dioxide scrubbers at power plants that must comply with the federal Clean Air Act Amendments of 1990.

The Illinois Housing Development Authority's bonding authority was increased by $400 million, according to Mr. Colsch. Officials from the authority did not return phone calls to comment.

The state also plans to do a short-term borrowing of approximately $500 million during the fiscal year to pay bills owed to Medicaid providers, according to Mr. Hovanec. He added that the debt issue would be similar to the $500 million of short-term GO certificates, backed by the state Medicaid assessment revenues and federal matching funds, which the state sold last February.

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