ROD R. BLAGOJEVICH

August 5, 2004

Mr. Tom Frederick

President/CEO

Elm City Center

1314 West Walnut

Jacksonville, Illinois 62650

Dear Mr. Frederick,

Thank you for your letter dated June 18, 2004 to Governor Blagojevich, regarding your

concern over the reductions to the Department of Human Services (DHS). The Governor's

office has asked that we respond directly to your inquiry.

Heading into fiscal year 2005 (FY 2005), we were faced with many tough choices.

Although the Governor's FY 2004 budget helped get the state back on track fiscally, we're

not out of the woods yet. In order to close the remaining $2.3 billion deficit in FY 2005

and fund our commitments to K-12 education, expanding FamilyCare and KidCare,

increasing prescription drugs for Seniors and keeping Medicaid benefits intact, we had to

reduce spending in various program lines throughout the budget.

We reviewed programs across all state agencies. In some cases, programs were reduced

anywhere from 2.25-4 percent, while others were exempted from any across the board

cuts-many of which are located in DHS. We took great pains to exempt or reduce the

amount of cuts to programs impacting vulnerable populations. In many cases, the

reductions were applied to administrative expenses and non-essential services within those

programs.

In the case of DHS, the department has received an increase of $83.7 million over the

fiscal year 2004 budget. The majority of the increased funding is going towards programs

for child care, programs for persons with mental illness or developmental disabilities and

programs that enable disabled individuals to remain in their own home.

The Governor has been working hard to manage the budget and ensure that we do not

repeat the poor fiscal decisions of the past. Illinois has faced its worse fiscal crisis in state

history, and we're on our way to getting the states fiscal house in order, but there's more

work and sacrifice left to do.

Again thank you for the time and consideration it took in contacting us.

Sincerely,

John Filan

Director, Governor's Office of Management and Budget