* As subscribers already know, it’s going to get lots more complicated than these reports reveal, but they’ll do for now…
Quinn announced Monday he would be talking to legislative leaders about a date to come back because he says there’s an outstanding issue with the state’s capital construction program.
The Chicago Democrat says lawmakers adjourned last week without approving an appropriations bill so the state can spend money on its ongoing capital construction program.
Quinn says he wants the lawmakers back to the state Capitol promptly so work doesn’t have to stop on projects around the state, including road, bridge and other construction projects.
Quinn says if work stops on the projects it will throw 52,000 people out of work.
More…
[Sen. Matt Murphy, R-Palatine] said it’s an “open question” whether the projects could be funded through the summer since lawmakers gave Quinn an extra six months to pay off bills. But Quinn’s administration contends it can’t spend money on bills racked up after June 30.
“This has the potential to sort of be a manufactured crisis, there is the potential that these projects could go on throughout the end of the year without a problem. But again, we’ve got to look at the motivation. The Senate Democrats and the governor can’t help but spend more money and this is an opportunity to spend an extra half billion dollars and they are trying to maximize the leverage to get it in the budget,” Murphy said. […]
A spokeswoman for Senate President John Cullerton, D-Chicago, said he agrees with Quinn that lawmakers must return to the Capitol, but the president’s focus isn’t just on construction programs but other issues as well.
“We need to come back this summer because our work is not done,” said spokeswoman Rikeesha Phelon. “Without sufficient funding for education and human services, the budget is incomplete.”
* More…
The Illinois Road and Transportation Builders Assn. called Gov. Quinn’s announcement today to halt road construction projects a “grievous mistake,” that will have dangerous repercussions for countless families and businesses throughout the state.
“These road construction projects are exactly what will provide some stability to our economy,” said Michael J. Sturino, President and CEO of the IRTBA. “To ask our workers, our families, our citizens to pay for the inability of our elected officials to come to a budget agreement is, frankly, appalling.”
According to IRTBA, if the Illinois Department of Transportation is forced to shut its doors on all road construction projects in the state, due to the budget impasse, it will put about 31,000 people out of work and onto the unemployment rolls. The shutdown itself will cost approximately $30 million, and the daily cost to maintain the shutdown would be around $3 million. According to Mr. Sturino, the reverberations from a move like this would also negatively impact all Illinois motorists, too.
“State legislators need to understand that their bungling will be devastating to our businesses, thousands of workers and their families,” he said. “I don’t think it’s unreasonable to ask the legislature to halt their own pay if they can’t do their jobs and produce a budget.”
*** UPDATE 1 *** From a press release…
Illinois Comptroller Judy Baar Topinka on Monday released the following statement in response to Governor Pat Quinn’s intention to shut down state road and capital projects on June 17. Topinka has asked legal counsel to review the matter, and implored state leaders to work together to prevent a capital project shutdown:
“My message to fellow state leaders is simple: do not play games with capital projects and the jobs they bring to Illinois. These initiatives not only maintain our roads, bridges and transportation network, they also provide good jobs, and support tens of thousands of families across our state. It is one thing to limit state spending on construction, but quite another to stop payment on projects already underway.
“My office will continue to pay state contractors for as long as legally possible, but ultimately this question must be addressed by the General Assembly and Governor. If that means calling an immediate special session, so be it. One thing is certain: our families and businesses are already struggling and paying more than ever before to state government; they deserve better than to be subjected to a high-priced game of legislative chicken over the capital bill.”
*** UPDATE 2 *** Raw tape…
*** UPDATE 3 *** From Statehouse lobbyist David Starrett in comments…
SB2172, as amended, specifically permits the obligation of funds until August 31, 2011. This is in addition to the lapse period extension provision everyone has been focusing on.
The bill passed both chambers and is ready to be sent to the Governor. If Quinn would sign this, it would largely prevent any near-term crisis during the construction season. Ahh, but he doesn’t to prevent the crisis, does he? –And once he receives SB2172, he still has 60 days to create one.
From the amendment’s synopsis…
Provides that all outstanding liabilities as of June 30, 2011, payable from appropriations that would otherwise expire at the conclusion of the lapse period for fiscal year 2011, and interest penalties payable on those liabilities under the State Prompt Payment Act, may be paid out of the expiring appropriations until December 31, 2011, without regard to the fiscal year in which the payment is made, as long as vouchers for the liabilities are received by the Comptroller no later than August 31, 2011
That would seem to indicate that Quinn can keep making payments out of the capital projects program even though the projects haven’t yet been officially reappropriated.
*** UPDATE 4 *** From a commenter…
The analysis presented in Update #3 is wrong. All it says is that bills must still be in by the end of the lapse period, which is August 31. However, obligations must still be made by June 30. The normal procedure doesn’t change, just the time period the Comptroller has to pay the bills. You can check with the Comptroller’s office but that is the answer you will get.
I have, in fact, checked with the comptroller’s office and am awaiting a response.
*** UPDATE 5 *** From the governor’s office…
The state incurs costs for work that has been completed. The legislation does not gives us the legal authority to extend FY11 appropriations, it just allows us to pay for work done in FY11. The lapse period allows for a bill to be submitted by August 31 - but does not allow us to pay for work done after June 30.
We cannot pay for work done in FY12 without an FY12 appropriation. If we were able to continually pay for capital projects without an appropriation, we would not need to pass an annual authorization.
Short version:
(1) Work has to be done by 6/30 (you can only use FY11 approps to pay for FY11 work—they cannot be used for FY12 work; rather, there must be an FY12 reapprop for work to be done in FY12.)
(2) Invoice for work done in FY 11 has to be in by 8/31
(3) The State can make payment until 12/31 (after that, the vendor has to go to the Court of Claims)
*** UPDATE 6 *** House Speaker Madigan’s spokesman Steve Brown gave the standard line this afternoon of:”We are prepared to work cooperatively with the governor.”
Asked if that meant the Speaker was OK with a special session, Brown said it wasn’t necessarily the case, adding that the Speaker believes “the lapse period will take care of the construction season.”
So, apparently, in this case, “work cooperatively with the governor” can mean: “Tell the governor he doesn’t have a leg to stand on.”
*** UPDATE 7 *** Leader Radogno…
At issue is the effort by majority Democrats in the Senate to add nearly a half a billion dollars to the state budget by filing a hostile amendment to HB 2189, the annual construction and road appropriation. In the House, Speaker Michael Madigan refused to accept the Senate add-ons and sent the measure back to the Senate asking that body to “recede” or withdraw from the hostile amendment.
Although the Speaker’s request was received in the Senate before that chamber adjourned, no motion to remove the add-on spending was filed and instead, the Senate adjourned without taking up the proposal. That left the state’s annual road and capital construction program without needed legal authority to proceed.
The construction program is the least controversial portion of the state budget and Senate Republicans will work with their House colleagues from both parties to get the unrelated spending removed so that a “clean” construction program can be approved.
* Related…
* Illinois legislative session hailed as productive
* Expect Quinn to tap Chico to head Illinois State Board of Education: Quinn was impressed by Chico’s education plan during the mayoral campaign, particularly the focus on early childhood education and expanding the pre-K network. Quinn is pushing to restore $17 million in state budget cuts to early childhood education.
* Lawmakers continue to cut despite major income tax increase - College students, the elderly and the mentally ill could be among those hit
* Emanuel getting much of what he wants in spring session
* Editorial: Pressing the agenda
- CircularFiringSquad - Monday, Jun 6, 11 @ 12:09 pm:
Actually the Tribbies should report the House passed the capitol bill early in the session, but the Senate the bill for another initiative later on.
- Carl Nyberg - Monday, Jun 6, 11 @ 12:36 pm:
What does the Illinois State Board of Education do besides lose the paperwork of teachers trying to get specialty certifications?
- Cincinnatus - Monday, Jun 6, 11 @ 12:37 pm:
What are the odds that the special session will NOT spend an additional $431,000,000.00 that we don’t have.
Balanced budget indeed.
- Vasyl - Monday, Jun 6, 11 @ 12:39 pm:
With all the special sessions in the last eight years, isn’t it time to face reality and amend the state constitution to have a full time legislature? I mean, really, special sessions have been too long fork Ito al games,anship between the exec and legislative branches.
- Cincinnatus - Monday, Jun 6, 11 @ 12:54 pm:
Better yet, Vasyl, let’s cut the GA pay in half and have them meet only every two years.
- Vasyl - Monday, Jun 6, 11 @ 12:58 pm:
Cinciannatus, and that would reduce special sessions how? Look, I’m not arguing the merits of a full time legislature other than saying that if the Exec keeps using special sessions, let’s just be honest a out the status of the GA. If we want a part time legislature, let’s not call so many special sessions and let them be truly Special.
- Montrose - Monday, Jun 6, 11 @ 1:02 pm:
*What are the odds that the special session will NOT spend an additional $431,000,000.00 that we don’t have.*
Given that Madigan and all the Republicans are opposed to it, pretty darn good.
- Rich Miller - Monday, Jun 6, 11 @ 1:03 pm:
Cincinnatus, bite your tongue.
- N'ville - Monday, Jun 6, 11 @ 1:04 pm:
The only thing “special” about this is that now they’ll have to actually listen to the Republicans in the room. Why don’t they just wait until after the 2012 elections when the Democrats will have 9/10th majorities in both Houses?
- Demoralized - Monday, Jun 6, 11 @ 1:08 pm:
Either Sen. Murphy is playing dumb or he isn’t as knowledgeable about the budget as he proclaims to be. If he was he would know that bills have to be obligated by June 30 to be paid. Yes, the lapse period was extended but that just gives the Comptroller until December to pay the bills. It does not give agencies extra time to obligate spending. So, if capital projects are to continue, they do indeed need a capital bill that appropriates money.
- Brutal - Monday, Jun 6, 11 @ 1:12 pm:
DO YOUR JOB LEGISLATORS! Pass the appropriations bill. How many more stories like this will we hear about working people having to pay the price for the ineptitude in Springfield? Honestly.
- Michelle Flaherty - Monday, Jun 6, 11 @ 1:17 pm:
Cincy, even better, let’s pay each of them $250,000 so qualified people would actually seek the jobs and the public might actually pay attention to what lawmakers accomplish or fail to accomplish and hold them accountable.
- Cincinnatus - Monday, Jun 6, 11 @ 1:20 pm:
- Rich Miller - Monday, Jun 6, 11 @ 1:03 pm:
“Cincinnatus, bite your tongue.”
Bwahaha! Good point.
- Rich Miller - Monday, Jun 6, 11 @ 1:27 pm:
lol
Talk like that could get you banned for life. Just sayin…
- david starrett - Monday, Jun 6, 11 @ 1:46 pm:
Demoralized: SB2172, as amended, specifically permits the obligation of funds until August 31, 2011. This is in addition to the lapse period extension provision everyone has been focusing on.
The bill passed both chambers and is ready to be sent to the Governor. If Quinn would sign this, it would largely prevent any near-term crisis during the construction season. Ahh, but he doesn’t to prevent the crisis, does he? –And once he receives SB2172, he still has 60 days to create one.
- Springfield Skeptic - Monday, Jun 6, 11 @ 2:00 pm:
I thought of a really good reason for a full time legislature but I’m afraid Rich would ban me for life if I mention it:)
- Yellow Dog Democrat - Monday, Jun 6, 11 @ 2:01 pm:
@Starrett -
I’m a bit confused. The synopsis says that the liabilities have to be incurred prior to June 30th.
Are you suggesting that contractors front load their billing for expenses incurred after June 30th to get them paid for out of current approps?
That seems sketchy at best.
- CircularFiringSquad - Monday, Jun 6, 11 @ 2:29 pm:
Could someone ask PQ the difference between paying bills in the lapse period and the situation over the past five or six years in which the state has stiffed everyone for months?
Perhaps he sees the +400 million bucks and smells crisis!
- JayKing - Monday, Jun 6, 11 @ 2:37 pm:
Bd. of Ed does a lot, especially in making sure that the State gets Federal Education dollars and that local districts are finacially responsible. Nothing against Chico. I like him, but why the need for change. Jesse Ruiz is a thoughtful, hard working person who has gotten a great deal accomplished by working under the radar. He seems to be without any ulterior political ambition or ego, as evidenced by the number of non-connected people who have told me that he returned calls to him about education issues. The problems with education in this State have more to do with funding, which is the province of the legislature. In this case, if it ain’t broke, don’t fix it.
- david starrett - Monday, Jun 6, 11 @ 2:54 pm:
YDD: It probably is a little sketchy, but I think the gambit would be to execute contracts by the end of this month, and then continue to process vouchers throughout the summer.
- dave - Monday, Jun 6, 11 @ 2:55 pm:
YDD is correct. Nothing in 2172 allows the state to pay for work that takes place in FY12 out of FY11 approps.
All 2172 allows the state to do is pay for liabilities incurred during FY11 by 12/31/11, and they just need to be vouchered by 8/31/11/
- Rich Miller - Monday, Jun 6, 11 @ 3:01 pm:
dave, as Starrett pointed out, the administration could kick it into gear and sign a whole lot of contracts now.
- Demoralized - Monday, Jun 6, 11 @ 3:01 pm:
Rich:
The analysis presented in Update #3 is wrong. All it says is that bills must still be in by the end of the lapse period, which is August 31. However, obligations must still be made by June 30. The normal procedure doesn’t change, just the time period the Comptroller has to pay the bills. You can check with the Comptroller’s office but that is the answer you will get.
- Anonymous - Monday, Jun 6, 11 @ 3:01 pm:
It doesn’t matter what we think about SB 2172, it matters what IDOT and Quinn thinks. I would argue that SB 2172 does apply and dare someone to challenge me. Those of you familiar with IDOT’s legal staff know that they are unlikely to do that without considerable pressure from Quinn.
That aside, SB 2172 applicability is certainly questionable and that is why the Senate should return to address the problem Senate Dems created. I love blaming stuff on Quinn, but this is Cullerton’s fault not Quinn’s.
- Demoralized - Monday, Jun 6, 11 @ 3:03 pm:
Rich:
It doesn’t matter if the contracts are signed by June 30. You have to have a bill in for actual work completed to pay the bill.
- wordslinger - Monday, Jun 6, 11 @ 3:03 pm:
It sounds like a bluff, base on Starrett’s comments and the amendment synopsis.
The thing about bluffing is, if you do it all the time and continually fold, it will never work.
If you have the cards, it’s not a bluff. I don’t think Quinn has the cards here.
Quinn’s not going to wear the jacket for tossing 31,000 people out of work before 4th of July parades if they can legally be paid until Aug. 31. Everybody knows that.
It sounds like Quinn and Cullerton are just trying to rattle the House for additional spending. Cullerton, I imagine, knows better but is going through the motions for some members and maybe as an apologia to Quinn for the “irrelevant” remark.
Quinn should know better, but maybe he doesn’t.
Is this tax-exempt bond money, by the way? The federales don’t look too kindly on leaving those funds collecting interest somewhere when they were sold for public purposes.
- walkinfool - Monday, Jun 6, 11 @ 3:11 pm:
Rich is right. I don’t see the House, agreeing to the additional $431M in spending, but will just pass the capital appropriations if necessary. Both caucuses in the House have shown good discipline on this issue.
- Demoralized - Monday, Jun 6, 11 @ 3:12 pm:
Please read this Accounting Bulletin from the Comptroller’s Office for FY10. The exact same language applied then. You will see that it refers to the fact that obligations MUST BE INCURRED BY JUNE 30.
http://www.apps.ioc.state.il.us/ioc-pdf/bulletins/AB_163.pdf
- soccermom - Monday, Jun 6, 11 @ 3:27 pm:
Word — Generally, the bonds are not issued until they have a little pool of unpaid bills sitting around, just for the reason you mention. (This is something the GOP has a hard time understanding, as they have spent the last couple of years in hysterics every July because “the state hasn’t issued any bonds, they don’t know what they’re doing, we’re going to miss this construction season, life as we know it is coming to an end.” Sigh.
- steve schnorf - Monday, Jun 6, 11 @ 3:45 pm:
I THINK you could sign a contract by June 30th, and pay for it thru 12/31 under the language. But I THINK that contract would have to be an obligation of FY11 funds.
- Ahoy - Monday, Jun 6, 11 @ 3:56 pm:
Gov’s responce makes a lot of sense, what’s the point of having a budget if you can spend the money anyway?
- Anonny - Monday, Jun 6, 11 @ 4:01 pm:
Why does anyone do business with Illinois?–you just become a political pawn.
- david starrett - Monday, Jun 6, 11 @ 4:25 pm:
I agree with Steve. Remember, these are REappropriations. Spending authority for FY’11 already exists if the funds are obligated before June 30 and (under SB2172) vouchers are in before the end of August.
- Demoralized - Monday, Jun 6, 11 @ 4:36 pm:
@david starrett:
I don’t know how to say it any more clearly other than you and others with your position are just plain wrong. I work at an agency in finance and this situation is exactly the same as in FY10. If the money isn’t obligated by June 30 (i.e. the work has not been done) it can’t be paid. Period. End of story. Appropriation authority for the capital projects ends June 30. Without new authority their can’t be anymore spending. Nobody is disputing the fact that work done before June 30 can be paid but after that you are out of luck.
- Demoralized - Monday, Jun 6, 11 @ 4:37 pm:
Sorry . . . “their” should be “there”
- Not a Newcomer - Monday, Jun 6, 11 @ 4:44 pm:
I thought all these silly political games were going to end when Blago was impeached? Maybe he wasn’t the only problem.
Let’s see, Blago (gone), Emil Jones (gone), Mike Madigan…
- steve schnorf - Monday, Jun 6, 11 @ 4:46 pm:
Demoralized, unless the rules have changed, I think you may be wrong. Example: I order a computer on May 25, sign all appropriate POs, etc. Computer delivered 7/15. I process and submit, it gets paid out of prior years approp against the obligation I created when I executed the order. Correct?
- Demoralized - Monday, Jun 6, 11 @ 4:51 pm:
Steve,
You are correct. But in terms of a contract, just because it may be signed does not mean that it can be paid. The contractor would still have to submit a bill. So, for example, a road builder signs a contract on June 15, but he does work building a road on July 15. He would send in a bill for the work on July 15. If there is no FY12 appropriation, he cannot be paid for that July 15 work. That’s what I’m saying. I agree that bills can continue to be submitted and paid but only for actual work completed by June 30.
- Demoralized - Monday, Jun 6, 11 @ 4:54 pm:
Steve,
As further follow up, in your example you are purchasing something and have executed an order for that purchase. Contract work is a little different in that there are deliverables set out in the contract and the contractor needs to bill for the work after a deliverable is achieved.
- Demoralized - Monday, Jun 6, 11 @ 4:56 pm:
Steve,
Sorry. One more thing. I suppose you could stipulate in the contract that XX% is payable at the time of execution and in that case you could make a payment from the FY11 appropriation. That is generally frowned upon, however.
- david starrett - Monday, Jun 6, 11 @ 5:12 pm:
D: I take your point about the difference between static equipment purchases and work contracts requiring materials for their completion. However, I still think that the language of SB2172 permits payment for vouchers (bills) submitted before the end of August if the work has been completed (or even performed?) before then if the funding has been previously appropriated.
- steve schnorf - Monday, Jun 6, 11 @ 5:14 pm:
D, you could do that, which I agree would and should generally be frowned on, or you could contract for work that could be completed in, say, 45 days (”paint these 10 rooms”, “re-stripe this parking lot”, “replace those windows”, etc). The obligation is created before June 30, the contract is filed with the Comptroller’s
office, the work is completed and the voucher for payment submitted before the end of the lapse period, and the bill paid by 12/31, right?
- Demoralized - Monday, Jun 6, 11 @ 5:29 pm:
Steve,
Getting too legal for my puny brain. Based on my experience I would doubt the Comptroller would allow that scenario. Maybe you include as part of the contract two separate provisions, one for materials and one for labor, and you pay for the materials the day you sign the contract just like you would ordering a computer. So you are paying for concrete or asphalt when you sign.
- Demoralized - Monday, Jun 6, 11 @ 5:31 pm:
Good discussion. Hopefully the Comptroller’s Office will clear up this issue once and for all!!
- Been There - Monday, Jun 6, 11 @ 5:32 pm:
The amazing thing about all this is that even the people on this site who seem to have experience dealing with approps, budgets and spending etc can’t agree on how the process works. That means the rest of us and probably most or all of the legislators are even more clueless. I have always received conflicting answers when I have inquired how it works.
- Scottish - Monday, Jun 6, 11 @ 6:05 pm:
(30 ILCS 105/9.05) (from Ch. 127, par. 145f)
Sec. 9.05. In the event that a voucher is submitted for advance payment of goods or services, the certification prescribed by Section 9.04 shall be made. In addition, the voucher shall state on its face that the goods or services are being procured pursuant to a formal, written contract the terms of which require advance payment. If it is not possible to execute a written contract, the voucher shall so state. The voucher shall also state that the contract requires the goods or services to be delivered or received prior to the expiration of the lapse period of the fiscal year to which the expenditures are charged, provided however, that such a statement shall not be required on vouchers submitted for periodical subscriptions or organizational memberships.
(Source: P.A. 82‑790.)
- david starrett - Monday, Jun 6, 11 @ 6:29 pm:
Thanks Scottish. I think I’d be interested to hear what the Procurement Policy Board has to say about this too.
- park - Monday, Jun 6, 11 @ 8:36 pm:
why is it that things that seem like such obvious state obligations, like building and fixing roads, get so complicated in Illinois? Didn’t our Governor budget these things up front? Like it’s a surprise? And I love his job numbers…why not 520,000 Governor? can you even justify the 52,000??
- Palatine - Tuesday, Jun 7, 11 @ 7:21 am:
It’s nice to see Chico get his payoff for the mayors job.