WE ARE ILLINOIS
Can Illinois pay its bills?
By Doug Finke
Posted Feb 07, 2011 @ 08:27 AM
Springfield, Ill. —
Illinois lawmakers return to Springfield Tuesday for the first time in a month facing a key piece of business left over from January - borrowing $8.75 billion to immediately pay off the state's backlogged bills.
It's uncertain, though, if the General Assembly will take quick action, in part because the arithmetic of the Illinois Senate changed with the November elections. No longer do Democrats hold a super, or three-fifths, majority in the chamber, meaning Republican votes are now needed to pass a borrowing plan. Borrowing requires super-majorities in both the House and Senate to pass.
Senate President John Cullerton, D-Chicago, has introduced Senate Bill 3, which authorizes the state to borrow the money.
"President Cullerton intends to move forward with the bill when he has some commitment of support from Republicans," said Cullerton spokeswoman Rikeesha Phelon.
However, she said, Cullerton does not have that commitment yet. It may not come quickly.
"I don't foresee a great deal of Republican support for continuing to borrow while failing to address the structural problems with the deficit," said Patty Schuh, spokeswoman for Senate Minority Leader Christine Radogno, R-Lemont. "We don't see an appetite for taking the pressure off of true reform and for continuing to borrow rather than address the problem."
Lobbying under way
It won't be from lack of trying by Gov. Pat Quinn's office. The administration Friday began contacting 36,000 vendors owed money by the state, urging them to call on their lawmakers to support the borrowing bill. Employees in the administration and state agencies are calling each of the vendors, said Quinn spokeswoman Brie Callahan.
About 100 people were making the calls, including people on Quinn's staff, legislative liaisons, government interns and regional staffers with the Department of Commerce and Economic Opportunity.
"This is a legislative issue," Callahan said. "This is something the governor has said from the beginning we need to do. Our goal is to help educate vendors."
Calls and e-mails also are going out to human-service providers asking them similarly to have their clients contact lawmakers, she said. The state also is getting in touch with umbrella organizations, such as the Illinois State Chamber of Commerce.
The chamber's vice president of governmental affairs, Todd Maisch, said Friday the organization hadn't taken a position on the borrowing bill.
"Getting our (members) paid is important, and there is also $800 million in corporate refunds that would be addressed in that. There are definitely some positive things about it," Maisch said.
The obvious downside, he said, is that "it will pile on several billion in debt" to be repaid through an income tax hike that was opposed by the chamber.
No 'meaningful' cuts
Republicans in both the House and Senate say the state hasn't done nearly enough to cut spending as a component of bringing its financial problems under control.
"Giving (Democrats) the authority to borrow another $9 billion means we won't see spending cuts anytime soon," said Sen. Matt Murphy of Palatine, a lead Republican budget negotiator. "We could pay down bills if they were willing to make spending reductions there's been no appetite to make. We just raised taxes by $7 billion. Why not use that money to pay down bills?"
The idea behind borrowing the money was to quickly pay off the backlog of bills. As of Friday, about $6.6 billion in bills were waiting to be paid, according to Comptroller Judy Baar Topinka's office.
That does not include money owed for corporate income tax refunds or state employee health insurance. Rep. Frank Mautino, D-Spring Valley, put corporate refunds at $700 million and employee health insurance at $890 million. Mautino is the House Democrats' top budget negotiator.
"Had we done this (borrowing in January), we could have had the cash in hand by March 8," Mautino said. "In the first weeks of March, we would have had those bills taken care of. The more we delay, it forces human-service providers, hospitals and schools to keep cutting back and laying off staff. Paying our debts should not be used as leverage."
$8 billion too much?
Republican votes have always been needed in the House to pass the bill.
"We are certainly not interested in the $8.7 billion plan that was out there before," said Sara Wojcicki, spokeswoman for House Minority Leader Tom Cross, R-Oswego. "We understand the necessity to pay bills, and we're willing to have discussions about the best way to approach that for vendors and the taxpayers."
Wojcicki said Cross still wants spending cuts, but is not linking that to borrowing.
"We must look at these cuts and reforms regardless of anything else we do this session," she said.
Rep. Rich Brauer, R-Petersburg, said he's ready to support borrowing to quickly pay bills, but not $8 billion worth.
"There's a lot of vendors out there that are in tough shape. The sooner we get it done, the better," Brauer said. "But I think $8 billion is an excessive amount. We should make it a more reasonable amount."
Brauer hasn't decided what that amount should be.
Rep. Raymond Poe, R-Springfield, said he hasn't made up his mind about borrowing, but he, too, thinks $8 billion at once is too much.
"I don't see why we don't do it incrementally, $2 billion at a time," he said.
Doing that would allow lawmakers to make sure the money is being used to pay bills and not expand programs, he said.
Sen. Larry Bomke, R-Springfield, said his biggest objection to borrowing - how it would be repaid - was removed when the income tax hike passed.
"It's certainly more palatable to vote for it now, but I'd still like to see significant workers' compensation reform," Bomke said. "Whether that is possible or not, I don't know."
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