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*** UPDATED x1 *** A huge and immediate spending/revenue problem remains
Monday, Jul 3, 2017 - Posted by Rich Miller * From Comptroller Mendoza’s statement last night…
It’s actually worse than that. Except for K-12, last year’s stopgap budget only contained appropriations for half the year. Universities, social service groups, business vendors, etc., etc., etc. never got an appropriation for the second half of Fiscal Year 2017, which ended Friday. The second half of FY 16 ended the same way and the state’s leaders just sent that down the memory hole. So, they not only need to deal with most of that backlog (they don’t have to deal with all of it at once, just as long as they can get it down to a 30-day payment cycle), they also have to figure out what to do about the billions they never got around to appropriating in the first place. * Aside from passing a temporary tax and then not preparing for its partial rollback, the other giant failure of the Democrats in 2011 was not dealing with the overdue bills. That debt was like a massive ball and chain being dragged around by the government’s neck, and it didn’t get resolved for four years, helping to convince folks that the tax hike “didn’t work” and that Pat Quinn was a failed governor. Borrowing to pay off that debt would’ve done wonders for Quinn, and so I’m curious whether the Democrats will “help” Rauner out this time. I really don’t want to go through this again. *** UPDATE *** Reuters…
Sigh. $3 billion is almost a point on the income tax. There’s also some dispute over the language in the BIMP about when the bonds are supposed to be paid back.
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- RNUG - Monday, Jul 3, 17 @ 10:26 am:
Don’t you know? Rauner is just going to cite the non-appropriation out in the contract boilerplate and try to negate all that debt! /s
- In Urbana - Monday, Jul 3, 17 @ 10:26 am:
Wasn’t that part of the reason for the larger cut to higher ed that Harris put in the budget plan voted on last night? https://twitter.com/BrianMackey/status/881634321060311040
- Anonymous - Monday, Jul 3, 17 @ 10:29 am:
Plus however much Rauner is hiding at the agencies.
- Rich Miller - Monday, Jul 3, 17 @ 10:32 am:
IU, that’s a rather small amount. Token even. This is gonna require a whole lot of money.
- Grand Avenue - Monday, Jul 3, 17 @ 10:36 am:
Yeah, that’s like people who talk about eliminating the Lt Gov office & merging Comptroller & Treasurer when asked about the budget crisis. Drops in the bucket.
Not necessarily bad ideas, but the savings would be rounding errors.
- Anonamouse - Monday, Jul 3, 17 @ 10:37 am:
At least a couple billion to the state universities.
- Will Caskey - Monday, Jul 3, 17 @ 10:41 am:
I mean, the impression wasn’t wrong. The tax hike was inadequate and exposed its legislators to attacks without the benefit of any long term stability. It was a political and governmental failure however one measures it, just not how Rauner claimed.
- wordslinger - Monday, Jul 3, 17 @ 10:41 am:
You’re either borrowing from willing lenders in the market or you’re borrowing from unwilling lenders among contracted state vendors.
Either way, it’s borrowing.
The fiscally responsible and good faith path is in the markets. Stiffing vendors is bad for Illinois businesses and the economy and carries a much higher rate of interest under the late payments act.
The math is indisputable. That won’t stop the math-challenged phony “fiscal conservatives” from throwing the usual irrational tantrums on the subject.
I’m certain RNUG is right about Rauner walking away from as much of the debt as he can. He made a fortune on such bad faith chicanery in the private sector.
- Ahem! - Monday, Jul 3, 17 @ 10:44 am:
Parsing Mendoza’s statement is it correct to say that Illinois had stacks of unpaid bills before Rauner succeeded Quinn?
Who “owns” that? Didn’t the Democrats control all three branches of state government prior to 2015?
- Demoralized - Monday, Jul 3, 17 @ 10:47 am:
Ahem:
The stack of unpaid bills is 3 times larger now than it was.
- Rich Miller - Monday, Jul 3, 17 @ 10:48 am:
===is it correct to say that Illinois had stacks of unpaid bills before Rauner succeeded Quinn?===
Instead of “parsing,” try using the Google. The state’s payment cycle was about 30 days before Rauner took office and just after they passed a bipartisan “fix” of the broken FY 15 budget. Not since.
- Rich Miller - Monday, Jul 3, 17 @ 10:50 am:
===The tax hike was inadequate===
By statute, a portion of the tax hike was set aside for borrowing to pay off the backlog. It had its own dedicated revenue stream. Ratings agencies love that. But the Democrats couldn’t pass the bill.
- Generic Drone - Monday, Jul 3, 17 @ 10:52 am:
@ahem… Who cares when the debt occured. It still has to be paid regardless who is to blame. We need real solutions.
- Sanity - Monday, Jul 3, 17 @ 10:58 am:
@Generic Drone… Amen
- VanillaMan - Monday, Jul 3, 17 @ 11:06 am:
Being talked off a ledge does not mean that the cause leading to the ledge is resolved.
ILGOP decided to take current events and spin it suicidally against itself. Instead of spinning positive and extracting face saving talking points, ILGOP is moving to Jonestown with Jim Jones.
ILGOP has to do more than purge itself of its moderate officials, it has to demonstrate a commitment higher than ideology. ILGOP must reestablish its government credibility to Illinoisans who want successful functioning governments.
Right now, ILGOP is only showing that it believes citizens can be supporters by promising cheap, broken government. Bad.
- Pelonski - Monday, Jul 3, 17 @ 11:13 am:
With the current situation, we are paying greater than 10% interest on our outstanding debt. We would pay much less than that if we bonded the debt. It should be a no brainer.
- Dandy Edward - Monday, Jul 3, 17 @ 11:42 am:
You can blame John, Mike and all the Governors going back to Thompson for this problem. There are two more tax increases to come one to pay down the back log of bills and one to solve the pension crisis.
- Chicago Cynic - Monday, Jul 3, 17 @ 11:56 am:
So glad the gov and GOP are proud of the politics around the veto threat. Of course people hate taxes because people like Rauner have been lying to them about the numbers for more than three years.
When Illinois is declared junk with Governor Junk presiding, we’ll see how it all shakes out politically. Either way, what Rauner and much of the GOP are doing is astonishingly irresponsible.
- anon2 - Monday, Jul 3, 17 @ 11:57 am:
=== the other giant failure of the Democrats in 2011 was not dealing with the overdue bills. ===
Quinn proposed selling bonds to pay down the debt, but it requires a 60 percent vote, and no Republicans were willing to vote for it. Consequently, they deserve a share in the responsibility.
- georgeatt - Monday, Jul 3, 17 @ 12:07 pm:
Revenue….marijuana legalization….elephant in the room…hello