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*** UPDATE *** As subscribers already know in more detail, the Senate Republicans are turning thumbs down on Gov. Pat Quinn’s borrowing plan…
The Republican caucus declared Tuesday that they are unanimous in opposing the idea. […]
But Republican leader Christine Radogno says Illinois should instead pay the backlog gradually by cutting spending. She said everything should be on the table for cuts, including education.
Radogno says many government programs don’t do much to improve life for state residents. She offered child-care services as an example of what could be reduced.
She might ask single moms working fulltime jobs if childcare services improve their lives.
* The AP has apparently seen an advance copy of the governor’s budget proposal…
A review of the document suggests a gap of more than $3 billion between income and expenses in the coming year. On top of that, the state owes about $8.7 billion to groups that provide services on government’s behalf, to corporations waiting for tax refunds and to the program that provides medical care for government employees.
In other words, expect cuts.
* That being said, one would expect the Chicago Tribune editorial board to be deliberately clueless on why the state should borrow to pay off past-due bills. They’re just that way…
What’s truly infuriating is that much of the money Quinn wants to borrow would go not to paying old bills, but to propping up other state spending. The synopsis of the borrowing bill, introduced by Senate President John Cullerton, says the proceeds of the bond sales “shall be used to pay vouchers that are at least 60 days past due, medical expenses incurred by the State under its health plans, corporate income tax refunds, and other operating expenses of the State.”
Bills are often drafted broadly, but the main purpose of this borrowing legislation is to retire past-due bills. Medical expenses and the refunds are part of that unfortunate milieu. The whole idea is to use a portion of the income tax hike to make the bond payments. That’s actually written into the tax hike bill.
* And Senate Republican Leader Christine Radogno is doing some expected posturing before the negotiations begin…
Elaine P. Maimon, president of Governors State University, asked Radogno how she believes the state can catch up on its overdue payments like appropriations to public universities without borrowing.
“We wait and wait and they don’t come,” Maimon said of state payments. “So I just wonder what alternative plan there might be, for universities in particular, to get their appropriated funds without borrowing?”
Radogno said those payments should begin to be made with new revenues from the 67 percent income tax increase approved last month.
“Even if we can’t pay you every penny because it’s not all coming in at once, we can certainly start,” she said.
Every dollar from the income tax hike which is used to pay off old bills is another dollar of new deficit creation. The tax hike was designed with the borrowing bill in tandem. The tax hike pays down the structural deficit and to make the payments on the borrowing, which is then used to pay off the old bills. If you use the tax hike money for old bills, you’re creating new past-due debt unless you come up with corresponding budget cuts. The Republicans are promising to do that, but they haven’t done so yet.
* What really bothered me today, however, was reading the Southtown-Star’s editorial page. Just about every word in today’s editorial is wrong. For instance…
If you thought, perhaps, the estimated $7 billion in new revenue generated each year by the income tax hike for the four years it is to be in effect would stave off any additional borrowing, you’re sorely mistaken.
Who the heck thought that? The borrowing idea is not a brand new plan just floated today. The media has been writing about it since December. The tax hike and the borrowing plan have been inextricably connected since at least then. As mentioned above, the bond payment schedule is actually written into the tax hike law. If this caught the Southtown-Star by surprise, then they’re simply not paying attention.
More…
This $7 billion in new revenue should go to the estimated 36,000 vendors awaiting payment for services already doled out in past years, including school districts, child care providers and a host of others. Borrowing to make those payments is simply irresponsible.
Once again, you use that new tax revenue to pay off $7 billion in old bills you will then create $7 billion in new, unpaid bills unless you make corresponding cuts. There’s about $10 billion or so in state spending that can be cut. If the Southtown Star wants to get rid of 70 percent of that, then I’d be more than happy to publish their complete list. Their examples today barely reach the millions (except Medicaid reform, which the paper doesn’t seem to realize has been and continues to be tackled).
More…
Although Quinn likes to say he’s cut $3 billion from the budget, we’re hard pressed to find concrete examples.
As I explained to subscribers yesterday, a huge chunk of Quinn’s list he released last week was phony. But well over a billion dollars in real cuts were listed. It ain’t enough, but it’s there.
For crying out loud, start paying attention, people.
* Related…
* Illinois Union Ally Turns Critic: Mr. Madigan’s challenge to current workers’ pensions has drawn fire from the state-employee unions that supported him for much of his career.
* Editorial: Time for clear state budget proposals from both parties
posted by Rich Miller
Tuesday, Feb 15, 11 @ 9:33 am
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Close the prisons, close the State police dept and crime labs and use the money to pay down the debt….
Comment by Ghost Tuesday, Feb 15, 11 @ 9:40 am
Did all the edit boards miss the House and Senate debates on the January tax increase? Did they miss the House vote on the borrowing provision.
Sheesh. Talk about clueless and aggressively uninformed.
Comment by piling on Tuesday, Feb 15, 11 @ 9:42 am
Piling on. What debates the tax increase was pushed through in the middle of the night at the last possible moment with Quinn hiding from the public for weeks beforehand. As usual no debate everything done in secret in caucus.
Comment by Fed up Tuesday, Feb 15, 11 @ 9:54 am
We’re now where the rubber meets the road. We have a tax increase. We’re past the election. Now someone has to steer the ship of state, against the wind, tide, and currents, in a way that we don’t end up right back where we started. It isn’t going to be easy.
Anyone who has followed this issue, or anyone who read the CTBA report Funding Our Future, knew this was what the landscape was going to look like; no surprises. Let’s watch carefully, and I hope, sanely and in a non-partisan way. There’s a whole bunch at stake and I don’t see much value in “gotchas”. (BTW, I couldn’t think of any more metaphors to mix; have at it)
Comment by steve schnorf Tuesday, Feb 15, 11 @ 9:54 am
Fed up, the average citizen could be excused, but an editorial board is supposed to try and figure out the facts before writing stuff. There’s no excuse for this.
Comment by Rich Miller Tuesday, Feb 15, 11 @ 9:58 am
Steve are we one the ship of fools or the titanic
Comment by Fed up Tuesday, Feb 15, 11 @ 10:00 am
There a real opportunity here for the GOP in the GA to get in the ballgame. The nasty tax vote is done; now’s the time to do some painful heavy-lifting in cutting and restructuring the budget.
Get it down on paper, barnstorm the state and media and give folks a real alternative to one-party rule. If you don’t do it now, well, what’s the point of showing up for work?
Comment by wordslinger Tuesday, Feb 15, 11 @ 10:02 am
Rich I agree the borrowing is needed just because of the cost savings from the interest being paid. But to claim their was debate before the tax vote is comical. Selling papers is still the goal of the editors so it’s easier for them to be against more borrowing in general terms than explain the reason for this borrowin.
Comment by Fed up Tuesday, Feb 15, 11 @ 10:05 am
ws, a disincentive to offering alternatives is that there are no pretty ones. Don’t borrow, either or both cut approps or don’t pay old bills. I think we may finally be getting to the point where people are going to be forced to engage; I don’t expect ti to be pretty.
Comment by steve schnorf Tuesday, Feb 15, 11 @ 10:13 am
Borrowing to pay off past debt is inevitable. The recent tax increase will not bring in enough cash quick enough to pay off the backlog of bills. Its way past time for both parties to “man up” and address the problems, not continue the kabuki theater of blame and counter blame. Every program and department, no matter how popular, should be evaluated and inefficiencies eliminated. The state’s tax system need a complete overhaul to eliminate tax breaks that the state no longer can afford, such as taxing a portion of retirement benefits, eliminating the income tax credit for real estate taxes paid, eliminating the 1.75% credit for sales tax collection by retailers, and eliminating the tax exemption for dividends from certain Illinois based companies. The changes will be draconian and the pain needs to be spread to every aspect of the state budget. There is only one year to get this done as 2012 begins the next election cycle with officials being less concerned with doing whats good for the state as opposed to doing what is good for their reelection. Without drastic steps being taken the state is doing nothing more than rearranging deck chairs on the Titanic.
Comment by WRMNpolitics Tuesday, Feb 15, 11 @ 10:14 am
“what’s the point of showing up for work?”
To get the salary, benefits and pensions, of course.
Comment by Anonymouse Tuesday, Feb 15, 11 @ 10:14 am
So we are at the point where we are asking the GA to reinvent themselves and become something they haven’t been in a long, long, while; responsible, truthful, non-partisan, unselfish, profound forward thinking, leaders.
Can a leopard change it’s spots? I guess we will see.
Steve, Found a metaphor you missed. LOL
Comment by Irish Tuesday, Feb 15, 11 @ 10:26 am
Why is the IDOC spending wasting millions of taxpayers dollars to receive accreditation when they don’t have room for inmates? The system was accredited thru the 80’s and 90’s when the gangs ran the prisons. Who is the “Einstein” coming up with these ideas!
Comment by Tamms Prison worker Tuesday, Feb 15, 11 @ 10:44 am
The biggest problem the State faces in this fiscal mess is communication. The GA and the Governor never fully tell the whole honest truth.
ie; The tax increase was pushed as the solution to the budget problem. Yes, there was borrowing mentioned in conjunction with the tax increase. But you did not see the members of the GA, even the Dems, and the Governor making a statement TOGETHER pointing out that one could not work without the other. You also did not see them trying to hammer home that both were needed. They were all trying to work out the spin and minimizing the fallout on themselves and preserving their individual agendas.
Then you have the main stream media. Each entity putting further spin on the story to lambast their opponents and protect their cohorts, and preserve their agendas.
As a result the public was lead to believe the tax increase would begin to fix things. And now they are wondering why borrowing is needed.
The truly sad thing about all of this is that the members of the GA and the mainstream media then go out and poll the public on what their feelings are.
Then they start quoting the polls and basing their decisions on polling results arrived at by false perceptions created by the spin the very people who are now using the poll data formulated. And apparently they aren’t smart enough to realize that.
Comment by Irish Tuesday, Feb 15, 11 @ 10:55 am
– As a result the public was lead to believe the tax increase would begin to fix things. And now they are wondering why borrowing is needed.–
And the full truth is, even after a tax increase and borrowing, you still need big cuts to get a balanced budget.
I’ll agree with you on the MSM. It’s always been tough to get “numbers” stories in print, much less on TV or radio.
There certainly are reporters who can and want to do long, detailed budget stories, but you can’t get them past editors. It doesn’t fit the media consultants profile. It seems worse now, and it was bad 20 years ago.
Comment by wordslinger Tuesday, Feb 15, 11 @ 11:01 am
I still say these problems would work themselves out with much less difficulty if even just one of the GA chambers was selected through sortition rather than elections. It would cut the political games and posturing in half at the very least and serve as a non-partisan and uninfluenced check and balance on the remaining chamber. I say no taxation without statistical representation! Just need 400K signatures to get an amendment on the ballot to do just that.
Comment by thechampaignlife Tuesday, Feb 15, 11 @ 11:16 am
I feel we should pay our vendors, when your slow, or no pay the cost always goes up.Who wants to do business with a deadbeat? In many cases we owe our selves most schools truly need the money. The Tribune editorial board has never had to meet a payroll that came out of thier own pocket. Our State has been a deadbeat for a long, long time. It’s time to pay the piper.
Comment by mokenavince Tuesday, Feb 15, 11 @ 11:23 am
People seem to forget that our mess took many years to make and will take many years to fix. You don’t just wipe away the structural deficit, spending problems and nine billion in unpaid bills with the stroke of a pen. I assume ghost was kidding when he said close the prisons (don’t ask what happens to inmates), close the state police, etc., but necessary cuts will hit critical services and sacred cows.
The sooner everyone including the Tribune Editorial board and other media get educated and stop posturing, the sooner we can deal with the real issues. Grow up people!
BTW, everything I just wrote applies on the Federal level as well.
Comment by Chicago Cynic Tuesday, Feb 15, 11 @ 11:24 am
* pay the pension fund
* don’t dig a deeper hole, no borrowing
* no new spending
* cut from the biggest government waste - the General Assembly
Comment by Bman Tuesday, Feb 15, 11 @ 11:27 am
Bman, and how do you propose to pay for all that? GA spending? Really? Are you daft?
Comment by Rich Miller Tuesday, Feb 15, 11 @ 11:31 am
I think “may have to cut” are the operative words here.
This is the governor who insisted endlessly during his campaign that he had made $3 billion in cuts. Somehow, the supporting documents didn’t appear until after the election. When they did appear, it turned out to be more like $1 billion in cuts. That’s not a fib. That’s a lie, a big one. But Illinoisians have a long history of allowing themselves to be lied to.. So perhaps it wasn’t a politically stupid lie, for Illinois.
So why would we believe anything he says about making cuts in his budget address. There will be a lot of talk about austerity. Austerity is in–look at the federal debate. He’ll claim to make some cuts. The Republicans (a weak lot at best) will ask to see documentation…..we really do deserve this.
Comment by cassandra Tuesday, Feb 15, 11 @ 11:36 am
do they have coconuts on the podium? really? I am sure the R’s came up w some brilliant ideas of their own since they will not support the borrowing.
Comment by nick Tuesday, Feb 15, 11 @ 12:10 pm
=Now someone has to steer the ship of state, against the wind, tide, and currents, in a way that we don’t end up right back where we started. It isn’t going to be easy= (Steve Schnorf)
Captain Quinn, calling Captian Quinn. Can you hear me Captain Quinn? They need you on the bridge. Something about leadership, I believe.
PQ is the captain of this ship of state. That doesn’t mean he is to blame for the horror that is our fiscal reality. However, it is time for PQ to take the helm and steer the ship. He needs to communicate to the folks and to the GA and give us the grand plan. That is a tall order for PQ. He might meander off onto a discussion of how the mighty Mississippi is like the state and how we should all look deep into the waters and reflect on how important the river is….you get the idea.
PQ, we need the great communicator. I fear that is not you. Gotta try, tho. Time to get a hold of the helm and steer this thing. Do so and you make the GOP look incompetent (if they need help in that area). Do so and you look like the great statesman you believe you are.
Comment by dupage dan Tuesday, Feb 15, 11 @ 12:17 pm
===Now someone has to steer the ship of state, against the wind, tide, and currents, in a way that we don’t end up right back where we started. It isn’t going to be easy===
Shouldn’t that last line be: “It isn’t going to be a breeze”? Just sayin…
Comment by Rich Miller Tuesday, Feb 15, 11 @ 12:20 pm
*Radogno says many government programs don’t do much to improve life for state residents. She offered child-care services as an example of what could be reduced.
She might ask single moms working fulltime jobs if childcare services improve their lives.*
Rodogno used to be reasonable. A decent moderate. Asserting that access to child care does not improve someone’s life?
I really want to believe she did not stop and think about what she was saying before that came out of her mouth. If she did think it through, this is going to be the ugliest session yet.
Comment by Montrose Tuesday, Feb 15, 11 @ 12:34 pm
Those are some big cuts. Hope this helps:
- Nationally, prison spending ranks second behind only Medicaid. Paroling non-violent offenders could reduce our prison costs by as much as 25%.
- Means-testing for college financial aid. It would be a mistake to reduce grants and loans for those at the bottom of the financial bracket. And I long supported Rep. Lang’s College for All proposal. But if the Tribune editorial board wants to see budget cuts, lets cut college financial aid for their reader’s kids.
- Close and sell a state university or two. Since we’re reducing college financial aid, we’ll have more college classrooms than we need. Obviously U of I remains open, but there are plenty of other colleges to put on the chopping block. Who knows, maybe Harvard wants to open a campus in Macomb, Charleston, Bloomington or DeKalb.
- Eliminate the Hold Harmless provision in the school funding formula. We shouldn’t be cutting checks to school districts that, by every reckoning, don’t need or deserve the money.
- Sunset the corporate tax loopholes as of Dec. 31st. The Civic Federation actually deserves props for this idea. Right now, for every dollar that comes in the door from the corporations that do pay taxes, 17 cents goes right back out the door, mostly to corporations that DON’T pay taxes. That is absurd. Let’s hold hearings starting in July on all the tax loopholes, and reinstate those that actually make economic sense.
- Fully fund substance abuse treatment and mental health services. Sometimes, you’ve got to spend money to save money, and drug addiction and mental illness are two societal problems that are relatively cheap and easy to fix, and very expensive to the taxpayers if you don’t. Last time i checked, there were 10,000 who WANTED to get treatment for their addiction on waiting lists. “I’m so glad you want to stop using heroin today. Could you come back in six months?” Retarded.
- Pass the borrowing bill already. We’re paying 24% interest per year on backlogged Medicaid bills and 12% interest per year to all other vendors. Taking out a bank loan to pay off your credit card debt is a fiscally conservative policy.
- Restructure the pension ramp up. When state revenues are flat, the ramp should be flat, when state revenues grow, put 50% of the excess into paying down our pension debt, 25% into a Rainy Day fund until it hits 10% of GRF, and then and only then can you spend more money on new or existing programs.
I don’t have a calculator, but I’m pretty sure that’s close to $2 billion.
Comment by Yellow Dog Democrat Tuesday, Feb 15, 11 @ 12:41 pm
Well, the game is afoot.
Comment by steve schnorf Tuesday, Feb 15, 11 @ 12:42 pm
Taxing for Billions, borrowing for even more Billions - this kinda talk just makes one giddy! But then someone has to go and say it’s not enough, in fact it’s all gone is so unnerving. I don’t even remember the fun we must have had spending it. Rich? Steve? Bill? Anyone?
Comment by A Citizen Tuesday, Feb 15, 11 @ 1:03 pm
==Obviously U of I remains open==
Why? That’s where most of the money goes. Close it and let the regionals pick up the slack. They do a better job of educating undergraduates at less cost.
Better yet make it a private and they can live off their endowment which they continue to grow while they live on the taxpayer’s dime.
Comment by Bill Tuesday, Feb 15, 11 @ 1:07 pm
So if they don’t pass the bond bill what happens to the part of the tax increase that must be used to pay off those nonexistent bonds?
Comment by Bill Tuesday, Feb 15, 11 @ 1:11 pm
@Bill -
– Because its the flagship campus, and it generates revenue because of the research.
– The money just sits there. Currie was asked that during debate, and under the bill the money cannot be spent on anything but paying off bonds to pay off our debt.
Comment by Yellow Dog Democrat Tuesday, Feb 15, 11 @ 1:23 pm
Ragdano evidently isn’t owed anything by the State. Is it a prerequisite of leadership in the GA to become clueless?
And we don’t people realize that cuts to education have detrimental affects on the business climate AND will only be replaced by higher local taxes which 1.) do not alleviate any of the tax burden on propery owners and 2.) cause further educational disparity on the haves and have nots?
-PQ needs to steer the ship of state -
I think PQ has political nightmares of the poem Oh captain! My Captain! and as a result is leery of taking the helm.
Comment by Irish Tuesday, Feb 15, 11 @ 1:43 pm
Borrow the money already. Pay off the current bills, work on a pension compromise, cut education spending by 5% higher Ed and 2% K-12, reduce other entitlements by 2%, and DO NOT spend another penny on any new programs.
Comment by downstate hack Tuesday, Feb 15, 11 @ 1:56 pm
@Bill - U of I endowment is a miniscule 1.1 billion for 70,000 students. Which at an optimistic average return of 6%/yr generates a whopping $942/student. If we want U of I to be elite, it needs to grow its endowment a lot. But maybe we don’t want to have an elite university.
Comment by EJ Tuesday, Feb 15, 11 @ 2:13 pm
“But maybe we don’t want to have an elite university.”
The difference between not wanting something and being unable to afford it is being entirely lost in the Illinois budget debate.
Comment by Anonymous Tuesday, Feb 15, 11 @ 2:26 pm
U of I coul do with a few less people making 100k+ a year
Bill I htought you were a U of I grad?
Comment by Ghost Tuesday, Feb 15, 11 @ 3:02 pm
Yellow Dog, nice to see that you were paying attention. Fed Up doesn’t believe there was any debate.
Yellow Dog Democrat - Tuesday, Feb 15, 11 @ 1:23 pm:
@Bill -
– Because its the flagship campus, and it generates revenue because of the research.
– The money just sits there. Currie was asked that during debate, and under the bill the money cannot be spent on anything but paying off bonds to pay off our debt.
Comment by piling on Tuesday, Feb 15, 11 @ 3:05 pm
==I don’t even remember the fun we must have had spending it.==
Didn’t you see “The Hangover”? Sometimes the fun is what you don’t remember!
Comment by thechampaignlife Tuesday, Feb 15, 11 @ 3:19 pm
–Captain Quinn, calling Captian Quinn. Can you hear me Captain Quinn? They need you on the bridge. Something about leadership, I believe. –
DD, I understand what you’re saying about Quinn’s shortcomings, but that should be viewed as as a wake-up call and opportunity by the state GOP.
It’s not like Quinn was an unknown quantity or the toughest candidate anyone ever saw. He got his head beat in most of his life. The fact that he won, in 2010, should be a wake-up call to the GOP.
It’s not enough to hunker down, moan, and hope for better results in the next election.
Put it this way: the stars lined up for the Illinois GOP last year and the result can only be described as disappointing.
Where are the GOP Young Guns in the GA? Let’s hear it. Otherwise, you just have Cross and Radogno as Eyeyore and the dude in the “Banana Splits” cartoon who always said “we’re doomed.”
Remember the Man from Dixon? Optimism? Energy? Common sense? Where the heck is that in the Illinois GOP?
Comment by wordslinger Tuesday, Feb 15, 11 @ 3:24 pm
Too bad we’re in this boat together and we sink or swim together.
Radogno has been telling Quinn for several months that the borrowing plan will not be supported, but he is going to plunge ahead with it anyway?
Isn’t that like jumping out of Apollo 13 without a working parachute?
Comment by Louis G. Atsaves Tuesday, Feb 15, 11 @ 3:26 pm
Dark and silent late last night,/
I think I might have heard the highway calling/ Geese in flight and dogs that bite /
And signs that might be omens say I’m going, I’m going /
I’m gone to Carolina in my mind.
Comment by GetOverIt Tuesday, Feb 15, 11 @ 3:34 pm
- Isn’t that like jumping out of Apollo 13 without a working parachute? -
I think it’s more like five people all falling out of an airplane with one big parachute, and each person has to pull a cord to release the chute, but one person refuses because they’re mad they can’t pull all five.
Hopefully this is just posturing by the SGOP.
Comment by Small Town Liberal Tuesday, Feb 15, 11 @ 3:48 pm
STL: That’s got to be one of the best analogies of IL and US posturing!
Comment by thechampaignlife Tuesday, Feb 15, 11 @ 4:46 pm
–Well, the game is afoot.–
Schnerolci Holmes/
Comment by wordslinger Tuesday, Feb 15, 11 @ 6:38 pm
“the bond payment schedule is actually written into the tax hike law.” Really, Rich? Cite the language in the Act, please! You call out the paper for having wrong - please show us how you have it right!
Comment by Traveler Tuesday, Feb 15, 11 @ 8:15 pm
An elite university is a net economic plus, because of the grant money that it puils in and because of the high tech industry and other economically desirable spinoffs that the graduates and the faculty generate. If you think education is expensive, compare it to the cost of ignorance.
Comment by jake Tuesday, Feb 15, 11 @ 8:32 pm
traveler, I don’t have the energy to do the work for you, but the repayment schedule is part of the bill–ramps up for three or 4 years, goes flat at 750m for 10, then drops in last year
Comment by steve schnorf Tuesday, Feb 15, 11 @ 10:02 pm
SS … I’ve done the work … The bond repayment schedule is not in the bill. Yes the tax rates are due to roll back on a schedule but absolutely nothing in the Act ties a dime of the tax increase to bond repayment. It has been said that’s what it’s for but Quinn also said he’s cut $3 billion! Rich said the bond repayment schedule is in the bill … It simply isn’t there!
Comment by Traveler Tuesday, Feb 15, 11 @ 11:05 pm