Capitol Fax.com - Your Illinois News Radar » *** UPDATED x1 *** Quinn to push borrowing for old bills again
SUBSCRIBE to Capitol Fax      Advertise Here      Mobile Version     Exclusive Subscriber Content     Updated Posts    Contact
CapitolFax.com
To subscribe to Capitol Fax, click here.
*** UPDATED x1 *** Quinn to push borrowing for old bills again

Thursday, Nov 15, 2012

* From Monique Garcia’s Twitter feed

Quinn budget head Jerry Stermer said governor will soon present another”refinancing” plan to pay down $8 billion bill backlog.

That’s not a surprise, considering that both chambers now have Democratic super-majorities. The Republicans in both chambers have been dead-set against a borrowing proposal and it requires a three-fifths vote to borrow money, so nothing has been done.

The Senate came one vote shy of passing a borrowing bill when it had 37 members, so it’s probably a good bet that the chamber will be able to pass it if it comes up again. The House may be a different story. Lots of conservative Dems oppose borrowing, so even with 71 votes they’ll probably need at least a small handful of Republicans.

By the way, a bill has already been introduced by Rep. Esther Golar to borrow $4 billion for old bills.

*** UPDATE *** From the governor’s office…

We are focused on comprehensive pension reform to rescue the system, ensure public employees have access to benefits and prevent out of control pension costs from eating up core services like education and healthcare.

While the governor has always been interested in refinancing as an option to help pay down old bills, there is no new plan on this issue right now. The budget director today reiterated our interest in working with the General Assembly on this issue, which is not new.

- Posted by Rich Miller        

25 Comments
  1. - gg - Thursday, Nov 15, 12 @ 1:03 pm:

    This is a no brainer.

    I am all in.


  2. - Anonymouse - Thursday, Nov 15, 12 @ 1:20 pm:

    Irony alert: Saviano would’ve voted for it; Willis won’t.


  3. - jake - Thursday, Nov 15, 12 @ 1:23 pm:

    Since the state pays interest on late payments, and since the interest rate the state pays on late payments is higher than it would pay on the bonds issued to pay down the debt, this is a no brainer. It is especially so since the people to whom the state owes the money would rather have the money now rather than the interest later, while the people who would buy the bonds are happy to put out the cost of the bonds in order to get the interest now. The choice needs to be framed as borrowing from a willing lender (the bond market) or borrowing from unwilling lenders (vendors and service providers). They are both borrowing, but one is more accurately termed “stalling creditors”.


  4. - Small Town Liberal - Thursday, Nov 15, 12 @ 1:31 pm:

    Saving the state money in the long run and putting money into the hands of providers in the short term, seems like a win win to me.


  5. - Ahoy! - Thursday, Nov 15, 12 @ 1:32 pm:

    This is not new borrowing, it’s just changing who the lender is. The money is already being borrowed by small businesses, human service providers, hospitals and units of local government.


  6. - Fan of the Game - Thursday, Nov 15, 12 @ 1:44 pm:

    If the interest on the bonds is less than the interest on the payments, then you do it. It sucks to run a government that way, but you do it.


  7. - Rudy - Thursday, Nov 15, 12 @ 1:55 pm:

    Remind me–did the GOP articulate a reason (besides the 2012 election) for opposing this previously?


  8. - wordslinger - Thursday, Nov 15, 12 @ 2:20 pm:

    The only folks who don’t want this are those who are getting more juice — on a regular, monthly basis — in late payments.

    It will save the state a lot of money and pump a B-12 shot of capital into the economy in a hurry.

    The fact that we haven’t done it already in these times of historically low interest rates makes you want to scream in frustration.


  9. - S.Dolopoulos - Thursday, Nov 15, 12 @ 2:32 pm:

    If “conservative Dems” won’t support it, why would they expect any of the remaining Republican to do so?

    That is not a commentary on the nature of this bill, but an observation on the practicality of the politics behind it.

    Even if those Republicans are from fairly moderate districts, breaking ranks to vote in favor of a borrowing bill won’t likely secure their re-election in two years.

    If anything, doing so practically begs a primary challenge from the right. Good luck explaining how borrowing this money actually lowers costs, etc. in the long run while someone is hammering you with oversimplified ads about you “borrowing” even more money.

    And is you survive the primary, it’s not as though the Democrats will give you and your depleted resorces a free pass in the general (see: Pankau, Saviano, Mathias, Cole, Mortland, et al.)

    I hope we are entering a period of reconciliation, but it’s beginning to feel more like a period of self-preservation. That includes some of those “conservative Dems” and even a few of the new Dems from previously GOP-leaning districts.

    Be interesting to see what happens.


  10. - Rich Miller - Thursday, Nov 15, 12 @ 2:33 pm:

    ===why would they expect any of the remaining Republican to do so? ===

    Governance?


  11. - jake - Thursday, Nov 15, 12 @ 2:34 pm:

    The reason people have opposed it has to do with language rather than substance; that is, “borrow” is a dirty word politically, as in, “My opponent advocates more borrowing. Borrowing is what got us in this mess in the first place.” We have to get beyond this sloganeering and attack these issues on the substance. Wordslinger is right. In addition to what I wrote earlier, this move would also provide an economic stimulus–temporary to be sure, but at a time when we really need it.


  12. - S.Dolopoulos - Thursday, Nov 15, 12 @ 2:37 pm:

    @wordslinger nails it as usual. And for every one who wants the extra juice, there is another one who needs that check to keep going and providing services. Meanwhile, nothing changes. Very frustrating.


  13. - S.Dolopoulos - Thursday, Nov 15, 12 @ 2:39 pm:

    Rich, I’d like to think so. I’d even go as afar as adding “good”, as in “good governance”.

    One can hope.


  14. - jake - Thursday, Nov 15, 12 @ 2:39 pm:

    PS to last–Don’t expect anything coherent to come out of the Governor’s office on this. It will be all up to the legislators. The Governor will be sort of a demented Greek chorus on the sidelines, commenting (but mostly beside the point) as the process moves forward, and moving in to take credit if anything is accomplished. I would like to be proved wrong about this, but that seems to be his modus operandi.


  15. - soccermom - Thursday, Nov 15, 12 @ 3:14 pm:

    Sorry to get all mathy here, but if we borrow $4 billion from our vendors for one year at 12% interest, versus borrowing $4 billion from bondholders for 30 years at 6%, I think that, over the long run, borrowing from bondholders costs lots more.

    It’s kind of like paying off your credit card debt by taking out a second mortgage on your house. It helps reduce your monthly costs, but it’s going to cost you much more over the life of the loan.

    Now, if the plan is to continue indefinitely (like, for 30 years) with the extended payment cycle, then a bond issuance makes sense. Otherwise, this plan benefits vendors — who absolutely deserve to be paid! - at increased expense to taxpayers as a whole.

    So, not really a no-brainer.


  16. - soccermom - Thursday, Nov 15, 12 @ 3:16 pm:

    Although Word makes a good point: The systemwide economic impact of a $4-8 billion cash injection would be pretty major, and would offset part of the increased longterm borrowing costs.


  17. - Bourbonrich - Thursday, Nov 15, 12 @ 3:20 pm:

    @soccermom. We are going to borrow $4 billion every year at 12%. It is not a one off.


  18. - Rich Miller - Thursday, Nov 15, 12 @ 3:21 pm:

    soccermom, I think they’re looking at ten years with an interest cost of about a billion dollars. So, yeah, it would be more. But you’d fix the damage that late payments are doing to the economy. And that’s very real.


  19. - soccermom - Thursday, Nov 15, 12 @ 3:22 pm:

    And to be fair — seems like the rate for Illinois bond issuances would likely be closer to 3 or 4%. Could someone please do the math and figure out what the relative costs of the current “system” and a bond issue might be, just for grins?

    And here’s the $8 billion question: If we do this, can we stay on a 60-day payment cycle going forward?


  20. - soccermom - Thursday, Nov 15, 12 @ 3:23 pm:

    Bourbonrich - That assumes that revenues will never catch up to current spending. Is that our assumption?


  21. - Bourbonrich - Thursday, Nov 15, 12 @ 3:25 pm:

    @soccermon - Yes. I think the odds are better that revenues are more likely to decline than to increase.


  22. - soccermom - Thursday, Nov 15, 12 @ 3:27 pm:

    Rich - I’m not saying it’s necessarily the wrong thing to do. I’m just saying — aw heck, let’s run the numbers and figure out the true costs and the benefits.

    Is $4 billion today worth paying $1 billion over ten years? It’s a real question, and one that deserves a thoughtful answer beyond “it’s a no-brainer.”


  23. - Anonymice - Thursday, Nov 15, 12 @ 3:47 pm:

    ==but if we borrow $4 billion from our vendors for one year at 12% interest, versus borrowing $4 billion from bondholders for 30 years at 6%==

    Actually, if we don’t do the borrowing or have a big influx of revenue, the $4 billion we owe to the vendors will keep rolling over and we’ll keep paying the 12%. The people currently waiting to get paid will be replaced by others waiting to get paid. If we issue bonds and then get a big influx of revenue, we can pay off the bonds or some other debts. So the time period the debts will be outstanding should presumably be the same.


  24. - Ahoy! - Thursday, Nov 15, 12 @ 3:47 pm:

    Went through the bill and they did not specify a payback time, but believe a 7 year bond would be more favorable due to the total interest over the term of the bond. They would still be able to manage the annual debt service, would be around $675 million and would be a fiscally prudent, which might help sway some moderates.


  25. - LilLebowskiUrbanAchiever - Thursday, Nov 15, 12 @ 4:46 pm:

    @bourbonrich- You are wrong. Revenues have been increasing. COGFA monthly reports are a useful read.


Sorry, comments for this post are now closed.


* Illinois Policy Institute news service scores exclusive Rauner interview
* Dispute erupts over how many people can attend a meeting
* ILGOP unleashes robocalls in wake of Senate tax hike vote
* It's just a bill
* Question of the day
* It's not 4.95 percent, it's 5.81 percent for the rest of this year
* Far more heat than light
* Caption contest!
* *** UPDATED x1 *** "Eyes are back on to the Senate"?
* *** UPDATED x2 *** Mendoza warns of "breaking point"
* Can an oligarch be a progressive?
* *** UPDATED x2 - Kennedy responds - Pawar responds *** Pritzker, Biss respond to Senate budget votes
* In her dreams
* Support High-Performing Charter Schools
* "I’m a big believer in win-win"
* Unkind headlines
* Modernize the Vital Records Act - Support HB 1785
* *** LIVE *** Session coverage
* SUBSCRIBERS ONLY - Today's edition of Capitol Fax (use all CAPS in password)
* Yesterday's stories

Support CapitolFax.com
Visit our advertisers...

...............

...............

...............

...............

...............

...............

...............

...............
<


Loading


* Day after Senate budget vote, GOP tries to push.....
* Day after Senate budget vote, GOP tries to push.....
* Day after Senate budget vote, GOP tries to push.....
* Day after Senate budget vote, GOP tries to push.....
* Feeling bold? Then Illinois bonds may be for you..
* State memo: Tax bill may not survive constituti.....


* Fastest growing US cities are in South; 4 of top 5 in Texas
* Chicago train service to install new camera system
* Chicago schools to borrow about $900 million
* Senate bills seek tougher Great Lakes pipeline standards
* Legislative hearing takes up Illinois child welfare agency
* Former pizzeria operator guilty of drug charges
* Grand jury indicts man in fatal shooting of judge
* Special prosecutor to review Porter County deputy's case
* Grand jury indicts man in fatal shooting of judge
* Teen dies after younger brother accidently shoots him

* Trump budget draws different Illinois reviews
* Bernard Schoenburg: Senate Democrats take action; situation still tense
* Illinois House begins review of Senate Democrats' budget plan
* Senate OKs bill allowing AT&T to shift resources from older technology
* Lawmakers hear about high caseloads, pressure at DCFS
* House Democrats propose college grant program
* Senate Dems approve $5.4B tax increase; budget fight continues
* Budget showdown: Senate Dems approve $5.4B tax increase
* Budget showdown: Senate Dems approve $5B tax increase
* Red-light cameras rake in millions for Chicago suburbs

* Massive Union Station project gets a developer
* United CEO: Dragging incident needs 'to be constant reminder'
* A new South Loop high school? CPS will look at it.
* Feeling bold? Then Illinois bonds may be for you
* Illinois budget spotlight shifts to Madigan


* 1 dead, 7 wounded in Chicago shootings Wednesday
* Chicago commuter train service to install new camera system
* Man wounded in Little Village shooting
* Man shot after argument in Lawndale
* 14-year-old boy shot in Austin
* Police: 16-year-old found boy shot to death in South Shore
* Kyle Hendricks sharp again, beats Giants as Cub rotation shapes up
* Georgia Nicols horoscopes for May 25, 2017
* Dear Abby: Friend talks about religion, nothing else
* Foreign meetings omitted from Sessions’ security clearance


* All aboard: Joliet Rocket steamin' into town
* Cheap out: Five fun things to do for free
* Quigley says Russia probe is 'in its infancy'
* Chicago in epicenter of charter school teacher contract disputes
* Teen shot dead, another teen wounded in Wednesday shootings
* Montana GOP candidate cited for assault after reporter says he was slammed to the ground
* Anthony Rizzo's two homers pave way for balanced Cubs attack
* Chicago only major U.S. city to lose population from 2015 to 2016
* Cubs, Giants feel short-changed by calls
* Navy Pier sues Teamsters over protest tactics


» Illinois Issues: Should 10-Year-Old Kids Be Kept In Juvenile Detention?
» Chicago Public Schools Look To Borrow $900 Million
» United CEO To Investors: We'll Be More Focused On Customers
» Red-Light Cameras Rake In Millions For Chicago Suburbs
» Judge Delays Decision On How Quickly State Should Pay Medicaid
» How Would Trump’s Budget Affect Illinois?
» Illinois Democrats Pass Budget Proposal in Senate
» Illinois Senate Approves Tax Hike, $37B Budget Plan
» Chicago Teachers Give Schools Chief No Confidence Vote
» Palatine Transgender Student To Graduate, But Locker Room Debate Continues


* Sounding the Alarm: Unacceptable
* Trump budget draws different Illinois reviews
* Bernard Schoenburg: Senate Democrats take action; situation still tense
* Our View: Cohesion needs to be central part of YWCA block decisions
* Illinois House begins review of Senate Democrats' budget plan
* Our View: Cohesion needs to be central part of Y block decisions
* Senate OKs bill allowing AT&T to shift resources from older technology
* Lawmakers hear about high caseloads, pressure at DCFS
* Sounding the Alarm: Unacceptable
* Sounding the Alarm: Time to take action


* Proposed cuts to Medicaid spending could short special education millions in funding
* Vera Fowler
* Joe Marlo
* Ora Essex
* Georgianna Richey
* Marsha Green
* Yolanda Esquer
* William Hertter
* Irene Marshall
* Christopher Coniglio


* GOP health bill: 23M more uninsured; sick risk higher costs
* Older jobless Americans: Trump's budget means 'hardship'
* Trust Colangelo: 76ers president holds reigns on Process
* Curses! Andretti weary of talking Indy 500 disappointment
* Jerusalem still suffers from divisions, 50 years after war

* Protesters continue die-in at US Rep. Rand...
* Jim Walz Will Challenge Randy Hultgren for...
* PHOTOS: Protesters stage die-in at Randy H...
* US Rep. Randy Hultgren's office the scene ...
* Second Democrat announces bid to unseat Hu...
* Sweet: Hultgren, Roskam, Kinzinger avoid b...
* Local Republicans, Democrats praise appoin...
* Batavia resident announces candidacy for 1...
* Comey's firing, health care fuel voters' a...
* Teacher raised in Yorkville running agains...

* Dick Durbin statement on CBO's analysis of......
* Congressional Budget Office: House bill to......
* Local legislators blast Trump plan - Quad-......

* Congressional Budget Office: House bill to......
* Local legislators blast Trump plan - Quad-......

* “The Driver’s Side” – News From The Motorist’s Perspective
* Is government too political?
* Queer and proud in a cool protester outfit
* Jon Mueller and Mike Weis meditate with drums at the Zen Buddhist Temple-Chicago
* Hitting Left with the Klonsky Brothers #16. Globalization.
* Losers!
* A zombie rides Pegasus into the sun on the gig poster of the week
* Black Cinema House honors the art of the shoeshine
* State Capitol Report: Senate’s unanimous vote for PACE bond bill and more
* Three more local ROTYs to recognize at June 6 ROTY banquet


* Illinois Awarded Funds to Offer Advanced Training on Detecting Impaired Driving
* Illinois EPA Announces Upcoming Household Hazardous Waste Collection Events
* IEMA Highlights Emergency Preparedness for People with Access and Functional Needs in May - Ready Illinois website offers preparedness tips for people, caregivers
* First Lady Launches Illinois Family Connects
* Governor and Lt. Governor Unveil 2016 Journal of Local Government Shared Service Best Practices

  
* Samsung Pay in Hong Kong transitions into full service
* Samsung Gear 360 goes on sale on Thursday, May 25th
* Addressing touch latency on the OnePlus 5, company also says it has Snapdragon 835
* T-Mobile bumps up deprioritization limit to 32GB
* OnePlus confirms Snapdragon 835 for OnePlus 5
* Verizon SmartHub is a cellular smart home router
* Twitter for Apple TV Gains Support for Live 360 Degree Video and Periscope Global Map

* Kopech, Giolito starting on Thursday
* Abreu, Leury homers not enough in finale
* Quintana: Location culprit for big-inning woes
* Abreu, Leury homers not enough in finale
* Sox welcome Detroit for doubleheader
* Abreu, Leury homers not enough in finale
* Shields pleased with arm after 'pen session


Main Menu
Home
Illinois
YouTube
Pundit rankings
Obama
Subscriber Content
Durbin
Burris
Blagojevich Trial
Advertising
Updated Posts
Polls

Archives
May 2017
April 2017
March 2017
February 2017
January 2017
December 2016
November 2016
October 2016
September 2016
August 2016
July 2016
June 2016
May 2016
April 2016
March 2016
February 2016
January 2016
December 2015
November 2015
October 2015
September 2015
August 2015
July 2015
June 2015
May 2015
April 2015
March 2015
February 2015
January 2015
December 2014
November 2014
October 2014
September 2014
August 2014
July 2014
June 2014
May 2014
April 2014
March 2014
February 2014
January 2014
December 2013
November 2013
October 2013
September 2013
August 2013
July 2013
June 2013
May 2013
April 2013
March 2013
February 2013
January 2013
December 2012
November 2012
October 2012
September 2012
August 2012
July 2012
June 2012
May 2012
April 2012
March 2012
February 2012
January 2012
December 2011
November 2011
October 2011
September 2011
August 2011
July 2011
June 2011
May 2011
April 2011
March 2011
February 2011
January 2011
December 2010
November 2010
October 2010
September 2010
August 2010
July 2010
June 2010
May 2010
April 2010
March 2010
February 2010
January 2010
December 2009
November 2009
October 2009
September 2009
August 2009
July 2009
June 2009
May 2009
April 2009
March 2009
February 2009
January 2009
December 2008
November 2008
October 2008
September 2008
August 2008
July 2008
June 2008
May 2008
April 2008
March 2008
February 2008
January 2008
December 2007
November 2007
October 2007
September 2007
August 2007
July 2007
June 2007
May 2007
April 2007
March 2007
February 2007
January 2007
December 2006
November 2006
October 2006
September 2006
August 2006
July 2006
June 2006
May 2006
April 2006
March 2006
February 2006
January 2006
December 2005
April 2005
March 2005
February 2005
January 2005
December 2004
November 2004
October 2004

Blog*Spot Archives
November 2005
October 2005
September 2005
August 2005
July 2005
June 2005
May 2005

Syndication

RSS Feed 2.0
Comments RSS 2.0
WordPress




Hosted by MCS SUBSCRIBE to Capitol Fax Advertise Here Mobile Version Contact Rich Miller