* The new “Budgeting for Results” law was supposed to provide us with more accurate budget projections from the governor’s office. One way of doing that was to require that the governor not use new revenue sources in his projections. But maybe the law also needs to be changed to force him to project expenditures using existing laws as well because his projection yesterday is basically a fantasy…

The long-term forecast for the Illinois budget looks gloomy, with less state money available and government services facing cuts, Gov. Pat Quinn’s office said Tuesday.

Quinn’s three-year projection shows state revenues climbing for two years and then dropping sharply when the state income tax increase expires. More federal money could make up the difference, but Illinois government would wind up with roughly the same amount to spend in 2015 that it has now: a little over $33 billion.

Meanwhile, expenses will keep climbing unless officials take action.

The state’s contribution to government pension systems is projected to grow 43 percent, to about $5.9 billion. Quinn’s forecast shows health care costs holding steady, but that assumes something happens in the next few years to control expenses. Without that, Medicaid costs could rise by hundreds of millions of dollars a year.

Most everybody reported that the governor’s forecast was “gloomy,” and it is gloomy, but it deliberately obscures some real spending pressures, so it’s the rosiest gloomy report I’ve seen in a while. Medicaid and state employee/retiree health insurance has been rising exponentially for years. How he plans to hold that spending to zero growth for the next three years is a question that went unanswered yesterday. Here are budget director David Vaught’s thoughts…

“If we can get the rate of growth down, it will be a great victory.”

Yeah, OK, I agree. But totally flat growth for three years? The state will have to inflict serious pain to do that and it will require an enormous amount of political will.

* Vaught, however, also fired a warning shot at AFSCME…

“We’re in a squeeze,” said David Vaught, Quinn’s budget director. “The pension costs and the Medicaid costs are going up more than the rate of inflation and more than the revenue growth. That squeezes everything else out.”

Consequently, Vaught said, other areas of government have to look at 9 percent reductions to compensate.

“Most likely (employee headcount) will go down,” Vaught said. “I don’t see a lot of prospect in the collective bargaining that’s going to be under way for a lot of good news for the employees.”

Vaught said programs also are likely to be cut. The administration is required to file a three-year budget projection as part of the report. It shows a $350 million reduction next year in human service programs, listed on the report as “protecting the most vulnerable among us.”

“These will be painful cuts,” Vaught said. “You don’t cut 9 percent out of budgets that have already been cut just by finding a little extra here and there. It’s going to be real cuts that affect real people.”

* More Vaught…

The governor’s budget director, David Vaught, suggested it’s not so grim despite the “squeeze” but acknowledged, “we’re scrambling.”

“In cash terms, sure, we’re behind, and we need to catch up,” Vaught said.

But Vaught held out a silver lining: At this point, slightly more money is coming in than is going out. The problem, Vaught said, is a “hangover” of costs from the last budget that are slated to be paid before June 30. The state also has an older stack of bills worth more than $6 billion.

Quinn plans to renew his push to pay down that stack by borrowing the money, a move he has long argued would bolster the economy. But Republicans, whose votes are needed to pass the proposal, have opposed more borrowing.

* And I simply cannot understand why nobody reported the most important part of the governor’s forecast: Even with these cuts, Illinois will have an $818 million deficit in Fiscal Year 2015, when most of the tax hike expires. It’s right there in the report. Go look at it yourself.