Money woes mount
Friday, Nov 14, 2008 - Posted by Rich Miller
* This talk does exist, but keep in mind that Gov. Blagojevich has threaten to veto all tax hikes…
Democrats who control the Illinois Senate hinted Thursday that some kind of tax hike may be on the horizon.
With the state’s backlog of unpaid bills projected to hit the $5 billion mark by March, Senate leaders said the state must find new ways to pay for existing services.
‘’Maybe we need to look at alternative ways to raise revenue,'’ said state Sen. James Clayborne, a Belleville Democrat vying to become the next Senate president.
State Sen. Donne Trotter, D-Chicago, a top budget expert in the Senate, said lawmakers will likely have to find new sources of cash to pay bills
‘’We would hope so,'’ Trotter said.
* More on yesterday’s Hynes announcement…
Already, Hynes said, his office has had to expedite payments to two vendors who threatened to cut off services to the state unless they were paid. One provides food service to a state prison, and the other supplies gasoline to state police cars.
“These are not hypotheticals,” Hynes said. “We were able to avert those crises, but it is getting untenable. If the backlog grows by $1 billion, we will lose flexibility. Next time, we may not be able to do it.”
About $1.5 billion of the backlog is from health-care bills for the poor. The remaining $2.5 billion covers “the entire spectrum of state service providers, vendors and institutional payees” Hynes wrote in his letter.
If the situation isn’t corrected, the impact will spread, Hynes warned. Although state aid payments to schools have been made on time so far, other payments — like reimbursements to schools for transportation and special education costs — could be delayed in the future, he said.
Further payment delays could force some businesses to close their doors or cause more health-care providers to refuse service to patients dependent on state assistance, he said.
* The governor’s office agrees that more short-term borrowing is probably needed…
“We agree that short-term borrowing could be helpful to pay bills quickly during this time of year and manage the state’s uneven cash flow,” said Blagojevich spokeswoman Katherine Ridgway.
* But I’m not sure I fully understand Sen. Radogno’s point…
But Sen. Christine Radogno of Lemont, the lead budget negotiator for Senate Republicans, criticized the idea. Short-term borrowing would just make the state’s problem worse, she said.
By law, the short-term loans have to be paid back by the end of the fiscal year. If there is a cash-flow problem, then the loans won’t make the situation much worse. If we can’t pay when the loan comes up, then that’s essentially the same problem we have now.
* And we’re down to the nubbins…
The Senate Democrats’ top budget negotiator, Sen. Donne Trotter of Chicago, said borrowing money right now might not be a good idea because of interest costs. He said the state should tap into its “rainy day” fund first.
Hynes said money in the rainy day fund was used in July.
Oops.
* From the governor’s spokesman…
“The national economy is in turmoil, and we have to make sure that everyone works together . . . to make sure we can get through these financially troubling times.”
“Working together” and “Blagojevich” are not two things you would expect to happen. Words are fine. Actions are what is needed right now.
* Related…
* Gambling with health care
* Lawmakers raise vehicle registration fee $1 to buy new cop cars
* Illinois may raise cost of registering vehicles
* Daley budget includes rosier view of economy
* Drop $1,200 a month county board perk
* As economy worsens, more skip buying $75 city vehicle stickers
* CTA board approves fare raises
* CTA Riders Respond to Fare Hike
* Find an extra quarter for CTA next year
* U.S. transportation wish lists put forth
* Gaming board to pick three finalists today for 10th casino
* Illinois Gaming Board Will Pick Three Finalists For 10th Casino License
- Vote Quimby! - Friday, Nov 14, 08 @ 11:41 am:
Still laughing that someone actually thought Illinois had a ‘rainy day’ fund. Wait a minute…someone in the legislature thought we did? Wait another minute…the majority party’s top budget person thought we had one? I just went from laughing to crying…
- Anonymous - Friday, Nov 14, 08 @ 11:41 am:
It is amazing that local Illinois Dems are talking about a tax hike which will almost certainly fall primarily on the middle class when we don’t yet know how much Illinois will get from a likely federal bailout early next year. Greedy, greedy, greedy.
In light of this likely infusion of federal funds, which is being touted by many national Democratic leaders, short term borrowing to get us through the next few months seems eminently sensible.
- wordslinger - Friday, Nov 14, 08 @ 12:28 pm:
I’m glad the federal government has all this money to pass around to Wall Street, AIG, possibly the auto industry and now the states.
I’m no whiz kid, but where’s it coming from? T-Bond sales? Or are we just cranking the old printing press?
- Oberon - Friday, Nov 14, 08 @ 12:58 pm:
Even if some federal money does show up, that is no cause for celebration. That will be a one-time infusion, and our problems are systemic. They will keep recurring unless addressed. Tax hikes or service cuts, more likely both, have to be part of our future, or we’ll just keep spending until the day there just isn’t anything to pay bills with and everything will stop.
State and local governments run to nearly 20% of the workforce in some rural counties. Don’t think that won’t hurt when the money well runs dry.
Right after an election is the ONLY time the GA will even consider a tax hike. Anyone discussing one at this point is at least demonstrating a little leadership. For the rest of them….phooey.
- Crystal Clear - Friday, Nov 14, 08 @ 1:00 pm:
I can see it now, a federal bail out to the State of Illinois, then Hizzoner and Todd come calling, “Where’s mine”. Illinois politics at its finest.
- Cal Skinner - Friday, Nov 14, 08 @ 1:15 pm:
A $5 billion deficit.
Don’t I remember that figure from 2003?
- Boscobud - Friday, Nov 14, 08 @ 1:47 pm:
Democrates and tax hikes. The two are like peanut butter and jelly.
- Capitol View - Friday, Nov 14, 08 @ 2:01 pm:
Boscobud - the difference between Democrats and Republicans is that Democrats tax and spend, and Republicans simply spend and ignore their deficits.
Remember Presidents Reagan and the current George Bush?
- LEFTY - Friday, Nov 14, 08 @ 2:02 pm:
I’m sure Rod doesn’t appreciate Hynes broadcasting the big problems in paying the State’s bills. Thinking just for the moment as he does, maybe Rod will appoint Hynes to the Senate seat as a way of shutting him up about the budget problems. I know, sounds like a goofy theory, but plausible?????
- Captain America - Friday, Nov 14, 08 @ 2:25 pm:
Pinnochio, the Godfather, and Machiavelli fiddled while Illinois went down the tubes financially. They put their egos and personal agendas ahead of the public interest for the last two years.
Soon we will have to pay the piper for their failed leadership.
Obama giveth the middle class a tax cut and the three stooges taketh away.Illinois Democratic political leadership in Springfield is morally, ethically and fiscally bankrupt.
Now we know what their idea of a balanced budget is - spend the money - just don’t pay the bills when the money runs out.
- Crystal Clear - Friday, Nov 14, 08 @ 2:31 pm:
The difference between the feds spending and ignoring the deficit is that the feds can print more money or borrow, altough it isn’t good because it causes inflation and/or higher interest rates. The state simply spends until it runs out and then has to wait until it gets more to pay its bills. Both situations are bad, but there is a difference. Maybe we should start printing our own script.
- Truth - Friday, Nov 14, 08 @ 2:33 pm:
Capitol View,
Are you paying attention to this thread? The Democrats have almost $5 billion in bills they cannot pay, and they want to borrow. Doesn’t sound like they are covering their spending.
- Boscobud - Friday, Nov 14, 08 @ 2:35 pm:
Capitol View,
Democrats bailout big corporations that really should have knowen better, and then they tax the american people who are working hard. Republicans give money back to the American people, who then give the money back to the economy. Republicans start costly wars to protect the home land. All I can say is it is going to be a interesting 4 years. I take that back, a interesting 4 months to see what Obama is going to do. How can I forget the best President Reagan, and the fighter President Bush.
- VanillaMan - Friday, Nov 14, 08 @ 2:47 pm:
I don’t really know what to do. I had hoped there would have been some type of rational understanding over the past seven years that the Democrats couldn’t keep wasting the money we give them in bottomless-pit social programs.
So now the inevitable has happened.
Not one dime more! You people don’t know how to make decisions, set priorities, plan, administer or even show up to work. Illinois taxpayers would have to be crazy to keep paying for this broken zoo of a government!
We do not have more to give you. Our neighbors are losing their homes and jobs. Layoffs are on the horizon for many of us. Chicago’s taxes are the highest in the US! Obama is salivating looking for ways to “spread” my wealth. I don’t make enough for all these Democrats to be satisfied!
No more. Take the billions we give you and fix the mess your stupidity has gotten us into.
- wordslinger - Friday, Nov 14, 08 @ 2:48 pm:
That’s right, Bosco, keep it simple. Don’t let any facts get in your way.
But just for kicks, read some of the stuff from those wild Bolsheviks, Sen. Coburn or Sen. McCain, regarding the fiscal responsibility of the GOP Congress of 2000-2006 (earmarks, Road Bill, domestic spending). And you might want to check the budget deficits under Clinton as compared to those under Reagan, Bush I and Bush II.
Or better yet… Look, a kitty!
- Boscobud - Friday, Nov 14, 08 @ 2:49 pm:
Vanilla Man,
Well said. I stand up and applaud. Thank You.
- Boscobud - Friday, Nov 14, 08 @ 2:52 pm:
Wordslinger,
Remember 9/11? I think that might have cost us a little bit of money. Oh Look a Kitty.
- Sweet Polly Purebred - Friday, Nov 14, 08 @ 2:57 pm:
As an employee of the state at an agency that deals with social service and medical providers, I can honestly say that my phone is ringing off the wall with calls from providers who are losing their businesses because they extended us credit in GOOD FAITH and are now left in the lurch - some have had to take out PRIVATE loans to keep their businesses going on the empty promises from the state that they will get their money “SOON”. Everyday I try to expedite what payments can be made with what little monies are left and everyday it gets harder. It is heart breaking to talk with a small business person who has worked their whole life building their business, only to lose it and possibly end up on the dole themselves, because of the little 2 bit dictator that is running our state into the ground. My list of providers for mental health care, child care, reduced or free health and dental care, etc etc etc is shrinking daily and because of the state of the economy the need continues to grow daily. Mr. Hynes is SOOOO… correct. There is a huge disaster awaiting the state of Illinois and its people and it is waiting for us just around the corner and yet idiots like Daley continue to waste MILLIONS on crap like the OBAMASSIAH’s coronation, the OLYMPIC bid, etc etc etc and then turn to the state with their cries of poverty. Best thing that could happen to this state would be that we pay a lump sum to Gary, IN to take CROOK county off our hands.
- wordslinger - Friday, Nov 14, 08 @ 2:59 pm:
Yo Bosco, earmarks, Road Bill, domestic spending. You can throw in the prescription drug entitlement for Medicare. What do they have to do with 9/11?
Face facts, friend. Don’t rationalize spend and borrow for domestic earmarks by hiding behind national security. Because if you do, the terrorists win.
Read Coburn and McCain. Or Jim Leach, the former Congressman from Iowa. They’re Republicans.
- Boscobud - Friday, Nov 14, 08 @ 3:05 pm:
Wordslinger,
Yo, I agree the earmarks, Road Bill, and domestic spending is a little out of control, but remember who is in control of Congress. What party is pushing for bailouts that America can’t afford. Terrorist don’t win when we spend on national security. Have we been attacked since 9/11?
- Sweet Polly Purebred - Friday, Nov 14, 08 @ 3:12 pm:
At this point, political parties make no difference. You have a bunch of people who were elected to do MY will, OUR will and yet as soon as they get elected they go deaf to our wishes and needs. Whether it be bailouts or insane social programs, whether it be the Dems or GOP, these “REPRESENTATIVES OF THE PEOPLE” and I use that phrase VERY loosely clearly represent NO ONE other than themselves, their political agendas and the agendas of the MACHINES that got them elected. The only solution I can see is to return the legislative representation back to its original focus - regular people who hold regular jobs who when needed report to Springfield or Washington to cast their votes based on the wishes of their constituants and are paid ONLY for the time spent travelling to vote and the actual time spent voting - no FULL TIME salary, only a per diem. Look at this last presidential election, we were paying the salaries of at least FOUR senators for jobs they COULD NOT perform because they were to busy running for ANOTHER JOB. WHY??? Why should they be receiving a salary? They should be forced to resign or take an unpaid leave of absence. Instead we are forced to not only pay their salaries for little or no work, but also the cost of SECRET SERVICE personnel, etc. CAREER POLITICIANS will be the death of democracy yet.
- wordslinger - Friday, Nov 14, 08 @ 3:16 pm:
Bosco, I was referring to the time, 2003-2006, actually, when the GOP had the White House, Senate and House of Reps — Bush, McConnell and Hastert.
The main point I’m trying to make is that it’s not so simple, a Dem/GOP thing. Don’t follow leaders, watch the parking meters. In other words, match the rhetoric with the reality.
As far as bailouts, I think the Wall Street, Fannie/Freddie and AIG bailouts originated in the Bush Administration. Right? And believe me, I personally am opposed to throwing money at the Big Three automakers.
See, not so simple.
- Capitol View - Friday, Nov 14, 08 @ 3:32 pm:
thank you, wordslinger.
The other political labeling confusion here as we address this fiscal crisis is that our current governor is no longer a Democrat. He lost that identification when he asked voters not to send any more House Democrats to Springfield, because he did not want the Speaker to have a veto proof majority. He is a Blagojevich, nothing more, and he loves to spend money on new initiatives rather than pay overdue bills or prop up the pension funds. Don’t blame his shortcomings on Democrats generally. He is a truly unique individual, impossible to work with on rational fiscal policy.
- Been There - Friday, Nov 14, 08 @ 3:46 pm:
Maybe some more gaming money coming in 6-7 months. The Gaming Board just announced the three finalist for the 10th license.
Des Plaines
Rosemont
Waukegan
Take your pick
- Arthur Andersen - Friday, Nov 14, 08 @ 3:54 pm:
Folks, Filan leaving the bridge should be a clue for those of you still in denial that the S.S. Blagojevich is about to join the Exxon Valdez and Titanic as one of the great shipwrecks of its time.
What comes first?
Indictment? Bankruptcy? Impeachment? Default?
You can hear the sound of steel hitting ice a bit more clearly every second.
- Rich Miller - Friday, Nov 14, 08 @ 3:55 pm:
===Folks, Filan leaving the bridge should be a clue for those of you still in denial that the S.S. Blagojevich is about to join the Exxon Valdez and Titanic as one of the great shipwrecks of its time.===
They’ve been trying to dump Filan for two years. I wouldn’t read too much into that.
- Cassandra - Friday, Nov 14, 08 @ 3:59 pm:
Gaming money from the new license plus a hefty federal bailout already pretty much promised after the swearing-in.
Sounds like we have a solution already….one that doesn’t involve cutting anything (much as a lot of stuff should be cut) and doesn’t raise taxes. Of course, for the middle class, a tax cut would be nice. But we’ll settle for no tax increase plus universal health care. We should settle for no less…and say hush to the the greedy pols and porkers standing in the wings with their mouths open.
- Rich Miller - Friday, Nov 14, 08 @ 4:02 pm:
Cassandra, read the post. The budget is based on over $500 mil from the boat license auction.
- anon - Friday, Nov 14, 08 @ 4:17 pm:
dcfs just submitted vouchers to the comptroller for foster care and adoptive parent payments. the comptroller informed dcfs that these would not be paid. i believe this is a first in a very looong time. they always find the money for these vouchers.
- Boscobud - Friday, Nov 14, 08 @ 6:07 pm:
Wordslinger,
The Bush administration bright the first phase of the bailout, than Congress decided they like what they saw so they revised the bailout. Yeah, the Bush administration brought it up first but Congress put the icing on the mess. In 2003-2006 the republicans had control and yeah they screwed up. Like you said it isn’t easy to solve this mess. And I also agree that we need to eliminate all this “its the Democrats fault or its the Republicans fault”. We need to work together and stop all this foolish spending that is going on. I am sure Illinois has a ton of foolish spending sprees. And we the taxpayers of Illinois need to express our concerns, and take all of the politicians in Illinois that work for themselves and not for the People and replace them. Unfortanly many Illinois don’t follow politics and have no idea of what is going on, and politicians know that and take advantage of that.
- wordslinger - Friday, Nov 14, 08 @ 7:27 pm:
This federal bailout fever is catching. It ain’t Monopoly money, folks (or maybe it is). But if the Chinese, Russian oligarchs and the oil sheiks want to buy more T-bonds, I’m sure we’ll float more debt.
On the state front, what are the choices?
1. Cutting human services, education, corrections, roads, public safety, (not to mention parks and historic sites).
2.Raising taxes.
3. Stiffing our vendors.
Number Three is unacceptable to me morally. I’m on board for raising the gasoline tax.
Who has cuts? Where and how much?
- Sweet Polly Purebred - Friday, Nov 14, 08 @ 8:53 pm:
anon - Not good news at all. What is even scarier is that people forget that we have children housed in other states that we pay them to maintain. What happens to these kids when Illinois does not pay for their keep? What about the disabled that we pay others to house and provide care for? The human cost goes on and on and on while our own LITTLE NERO continues to fiddle and burn money on his whims.
- Cranky Old Man - Saturday, Nov 15, 08 @ 7:24 am:
I know I’m late, but didn’t Katrina cost a “little”? I’m not a fan of bailing out the Wall St crowd, but at least they’re paying taxes and spending $$$ which contribute to jobs and more taxpayers unlike many of the Katrina victims who sat around waiting for the govt to come get them instead of leaving when told to get out. Didn’t have that problem in Iowa when the flooding hit. Just sayin’.
- Ted - Saturday, Nov 15, 08 @ 10:50 am:
Polly and anon, you should be must reading for everyone in Illinois. I deal with doctors, pharmacists and social service providers. Illinois is about to get its “shock and awe” moment when we see small pharmacists go out of business, social service providers tank and doctors leave to avoid financial ruin. The years of slow pay has had a cumulative effect of stretching the resources and borrowing power of these providers to the breaking point. Slower pay in this economy will push many beyond their breaking point. Look too for Catholic Social Services, that provides a great deal of services to DCFS, especially in foster care, emergency housing and services for exploited, neglected or abused children, and counseling, to take a very hard hit. It is all very tragic.