* Almost always, outsiders can never quite comprehend Illinois. But Amy Merrick at the Wall Street Journal did a bang-up job today with the budget mess…
Illinois lawmakers were in disarray Thursday as they groped for stopgap measures to address a $13 billion deficit equaling nearly half of the state’s general-fund revenue.
The state faces one of the nation’s worst budget crises, spilled over in part from the broader national economic crunch, and its current bond ratings lag only California’s. But the confusion in the legislature indicates that serious steps to fix state finances won’t be taken until after the November elections—if then.
Illinois lawmakers have little appetite for drastic spending cuts. An income-tax increase proposed by Democratic Gov. Pat Quinn is going nowhere. Even temporary steps, such as borrowing to make pension payments, have stalled. Illinois is months late on many of its bills and has no plan for catching up.
The legislature may push the problem to the governor’s office by granting Mr. Quinn emergency budget powers and adjourning Friday, about three weeks earlier than usual. A bill under consideration in the state House would give Mr. Quinn greater leeway to shift money among state funds and to require agencies to set aside part of their budgets now in case of future cuts.
…Adding… Ms. Merrick just sent me a note saying she’s an “Illinois lifer” who has covered the state and region for 10 years. I shoulda known her quality piece could never have been written by an outsider.
* This is just a perfectly awful mess…
The two parties are so divided that they couldn’t even agree on whether the measure would raise or lower state spending. Trotter said it would reduce spending by about $2 billion but provided no details to support that claim.
And, of course, there’s this…
House Democrats are poised to drop an ugly inaugural gift into the lap of the next governor by considering a plan to delay making a $3.7 billion payment to the state pension until next January.
The ugly but undeniable truth is that borrowing to make the pension payments is actually less expensive and far more responsible than this “suspension” of the pension payments until January…
Pension officials object. They note that delaying the payment means giving up months worth of interest that could be collected if the $3.7 billion were invested.
To keep checks going out to retirees, the pension systems probably will have to spend between $100 million and $200 million of their assets, said William Atwood, executive director of the Illinois State Board of Investment. That would put the systems, already underfunded by about $80 billion, even further behind.
Atwood said he also worries January will arrive and officials still won’t be able to find the pension money. The retirement systems could end up with no money at all, he said.
I’ve actually heard a lower number than this, but the Tribune says the cost of the delay is “up to $37 billion in lost investment earnings over the next 35 years.” Borrowing the $4 billion or so and paying it back over 8 years would cost a tiny fraction of that.
* Last night’s most worthless moment…
As part of the political posturing, Senate Democrats pushed a plan that called for eliminating Senate GOP projects funded under last year’s massive public works bill. It was an attempt by Democrats, tired of Republican complaints of overspending, to make GOP senators vote to restore their pet projects.
“You like pork when you’re eating it,” Sen. Rickey Hendon, D-Chicago, told Republicans.
Senate Republicans accused Democrats of violating a deal made to authorize the projects last year when some of them voted to legalize video poker in bars and restaurants as part of a public works program.
Republicans also were stung that the move came while Senate GOP leader Christine Radogno of Lemont was absent, attending her daughter’s college graduation in Colorado. That set up an odd situation later when Cullerton asked his Democratic members to vote to restore the $100 million in GOP projects to the budget, while Republicans voted to eliminate them.
All that griping, fighting and gnashing of teeth for nothing.
* Budget director David Vaught gets our quote of the day award…
“Let’s get real here,” Vaught said. “We’re out of money.”
Yeah, no kidding.
Republican gubernatorial nominee Sen. Bill Brady is the runner up…
Asked later why he chose not to participate in the [Senate budget] debate, Brady said, “I didn’t find anything worth speaking to.”
When pressed on the question, Brady walked away from reporters outside the Senate chamber, saying only, “Thanks.”
And Sen. Trotter is second runner-up…
“We thought we had met the depths of how low we can go last year,” said state Sen. Donne Trotter of Chicago, a chief budget negotiator for the Democrats. “That has certainly played out that we can get even lower.”