Illinois’ budget woes are getting no help from the state’s economy.
Job losses in construction and finances were the primary factors behind a 7.3 percent unemployment rate in October compared to 5.3 percent a year ago, the Illinois Department of Employment Security reported Thursday. The three-month average of 7.1 percent was the highest in 15 years.
National unemployment last month was 6.5 percent, a 14-year high.
Illinois is “effectively in a recession,” said University of Illinois economist Anne Villamil, who added that she expects an official recession declaration from the federal government as early as January.
“This will only make the state’s budget problems worse. As the budget gap widens, cuts will be made. States usually cut education and health programs, and raise taxes where they can,” Villamil said in e-mailed responses.
She added that Illinois could well join the list of states and cities already seeking help from a federal bailout program if the budget crisis worsens. Gov. Rod Blagojevich this week asked legislators for extraordinary powers to cut a projected $2 billion budget shortfall, including authority to hold back up to 8 percent of funding for agencies under his control, schools, higher education and local governments.
Legislators have yet to act on the request.
Department of Employment Security Director Maureen O’Donnell also said Thursday that federal intervention is needed to help reverse state job losses totaling 19,000 in the past year, though a spokesman for O’Donnell said later she was not suggesting specific construction projects or federal financial assistance at this point.
“It was more of a generic comment on the situation,” said Greg Rivera.
Rivera said the agency does not comment on specific industries, but that “no one would argue” the connection between problems in the housing and banking industries and the heavy loss of construction and finance jobs.
Tim Landis can be reached at (217) 788-1536 or tim.landis@sj-r.com.

Employment gains and losses October 2007-October 2008
Gains
— Professional and business services: 8,000
— Education and health services: 5,900
— Trade, transportation, utilities (includes retail trade): 5,200

Losses
— Construction: 15,200
— Finance: 9,300
— Government: 5,000
— Other services: 2,700
— Manufacturing: 2,300
— Information: 2,200
— Leisure and hospitality: 1,400