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Illinois “steps back from the abyss,” but serious problems remain

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* The headline on Comptroller Judy Baar Topinka’s latest quarterly report pretty much says it all…

* From that report, we see that the problem of unpaid bills is persistent and is no better so far…

At the end of March, the office of the Comptroller had $4.515 billion in unpaid bills with some vouchers dating back to mid-october 2010, compared to the $4.496 billion it had on hand at the same time last year.

So, we’re actually a bit behind last year’s bill-paying rate. Not great.

A helpful graph shows where we are. The red line is the current fiscal year. Click the pic for a larger image…

The income tax hike was designed to get rid of the structural deficit, not pay off old bills, so this should be no surprise. The governor wants to borrow to pay off those old bills, but there’s little chance of that happening…

State Sen. John Sullivan, D-Rushville, said he asked Topinka recently what exactly the backlog stood at so he could formulate some way to pay down the bills.

“Instead of doing a borrowing bill like the governor came out with of $8.75 (billion) maybe we could cut that in half. Maybe we would only have to borrow four or five billion dollars to pay those vendors and those schools that are owed money from months and months and months ago,” Sullivan said.

He said the oldest debts should be paid first.

State Sen. Matt Murphy, R-Palatine, said that any amount of borrowing is a non-starter for the GOP.

“We don’t view borrowing as part of the solution to this,” Murphy said, pointing to a plan by the Senate Republicans that outlined $6.7 billion in possible cuts. “It’s time to get responsible and knuckle down and actually bring spending down to levels the people of this state can actually afford.”

* But while lawmakers go back and forth, people like Tazwood Mental Health Center CEO Caterina Richardson find themselves drowning…

Richardson said Thursday that the state owes Tazwood $850,000 for this fiscal year, which runs from July 1, 2010, to June 30, 2011. Since Tazwood opened its doors in Pekin in 1996, state funding has declined by 48 percent.

Tazwood is a not-for-profit organization that provides substance abuse treatment and outpatient mental health care. Fewer state dollars means fewer services to clients in need.

“We are having probably more clients coming into contact with the corrections and the justice system because we are not able to serve as many people as we have in the past due to the funding cuts,” said Richardson. “Things are not getting better.

“Last year we were cut in funding to non-Medicaid clients, so at this point the funding that we can receive for clients who are not on Medicaid is very, very limited. As little as five hours of case management is all they can have in one year. We can do very little in five hours. We’re essentially trying to get them hooked up with natural support and identify other community resources that are available.”

* Related…

* State tax take climbs

* Pharmacist’s road to bankruptcy paved by state’s rocky fiscal path

* Mental Health Advocates Rally For Better State Care

* Panel advances plan to help pay social service bills

* Ron Jackson: Sin tax subjectivity strikes cord

* Suburban lawmakers pitch ideas to save money on local government

* VIDEO: Rep. William Davis on education spending

* VIDEO: Rep. John Bradley on House budgeting process

* VIDEO: Consumer speaks at mental health rally.

* VIDEO: Deborah Rose addresses mental health rally

posted by Rich Miller
Tuesday, Apr 12, 11 @ 10:00 am

Comments

We stepped back from the abyss and into a chasm…

Comment by Cincinnatus Tuesday, Apr 12, 11 @ 11:18 am
C, at least a chasm has a bottom. Just sayin…

Comment by Rich Miller Tuesday, Apr 12, 11 @ 11:26 am
–“We don’t view borrowing as part of the solution to this,” Murphy said, pointing to a plan by the Senate Republicans that outlined $6.7 billion in possible cuts. “It’s time to get responsible and knuckle down and actually bring spending down to levels the people of this state can actually afford.–

What a Profile in Courage. He talks about blowing off the people he owes money like it’s a badge of honor or something.

Comment by wordslinger Tuesday, Apr 12, 11 @ 11:48 am
Wrodslinger,

I think that Quinn botched the borrowing plan when he asked for the Full Monty of borrowing in addition to billion(s) more to cover future spending shortfalls. This approach made it too easy to criticize his proposals. In addition, Quinn’s imperial (or inept, I haven’t quite decided which) treatment of Republicans, and the way he has reneged on deals with them lost the Republicans as possible partners. Does anyone think that Quinn has the chops to pull off an Obama on the budget? Unlikely.

Comment by Cincinnatus Tuesday, Apr 12, 11 @ 11:57 am
I think Cinn’s comment was spot on….a chasm has a bottom but you can’t find it.

Comment by Not It Tuesday, Apr 12, 11 @ 12:25 pm
It will be interesting when Topinka (R) steps out in favor of borrowing. She has tip-toed to that line and looking at increasing revenues, and the amount of unpaid bills, I think there may come a time when she can declare this a cash-flow issue on some levels.

Comment by Time Keeps on Ticking, Ticking Tuesday, Apr 12, 11 @ 1:17 pm
With all due respect to Senator Murphy, we’ve already done the borrowing. The discussion now is only about who holds the paper, whether they hold it voluntarily or involuntarily, and at what interest rate.

Comment by steve schnorf Tuesday, Apr 12, 11 @ 2:18 pm
Looking at this chart, any rational person/ Business would say we need to borrow and get some cash in the coffers. ANd then cut the one or two billion needed to match revenues to expeditures (seems like the House is doing this as we speak) and life goes on. Seems pretty straight forward from a common sense perspective.

Comment by Time Keeps on Ticking, Ticking Tuesday, Apr 12, 11 @ 2:35 pm
How many times did we hear Quinn say the tax increase was necessary to pay off the debts? Now the blog states it was intended to pay off the structural deficit, which is essentially spending more than comes in, and not pay off the debt.

Comment by Jim Tuesday, Apr 12, 11 @ 2:56 pm
Jim as I recall a quarter of a percent of the tax increase was permanent and meant to pay of the borrowing over 14 years. ANother question: Does anyone know if other states’ Daily Cash balance looks this funky. A lot of spikes and drops there. Shouldn’t it be smoother than what we see here?

Comment by Time Keeps on Ticking, Ticking Tuesday, Apr 12, 11 @ 3:16 pm
Jim, your ignorance of the facts is not my problem.

Comment by Rich Miller Tuesday, Apr 12, 11 @ 3:18 pm
When is the Republican party going to figure out that they are already borrowing the money? They are borrowing it from business and local government that do not have the resources to float the state. The State should bond part of the money to provide relief to businesses and local governments. The Senate Republican plan isn’t even technically possible, let alone politically possible and still would take 2 years to pay off the small businesses and local government.

Heck, If you owed money 20,000 creditors, there would be some cost savings in stamps alone to only pay 1 creditor. The Republican’s need to realize they are already borrowing the money and the Democrats need to finally make some real and substantial cuts. If those two things both do not happen, our state will be in the same shape in four years and we will have had a tax increase for nothing.

Comment by Ahoy Tuesday, Apr 12, 11 @ 3:19 pm
The Republicans continue in the same vein as obstructionists and naysayers with no real answers of their own. Again as I have said many times on this blog, if they have a problem with the borrowing plan containing more spending, and borrowing more than what is needed to JUST pay off the backlog of bills then propose a bill that borrows only what is needed.

As a party that is for business I would think that the GOP would be pushing for these vendors to get paid so they can cover their costs and maybe prosper and create jobs. But apparently the loyalty to small business is not as strong as the need to obstruct.

Comment by Irish Tuesday, Apr 12, 11 @ 3:42 pm
Ahoy said,

“The Republican’s need to realize they are already borrowing the money and the Democrats need to finally make some real and substantial cuts.”

Yup, there is a grand compromise here.

There is a lot of mistrust on both sides. So far, Republicans have seen a large tax increase, while they still see excessive spending and broken Quinn promises. One need only look at the chart above, not only are we running a structural deficit, for the past several years there has been no improvement.

I truly believe a grand compromise can only be achieved between Madigan (a pragmatic politician) and the Republicans. A deal will not include Quinn or the Senate Democrats. There is a mix of spending cuts, taxes (I don’t think additional but perhaps extension of the current increase) and borrowing (for outstanding bills only, no current or future operating costs) can be made.

Comment by Cincinnatus Tuesday, Apr 12, 11 @ 3:50 pm
–A deal will not include Quinn or the Senate Democrats. –

You might want to brush up on your civics. House, Senate, Governor.

Comment by wordslinger Tuesday, Apr 12, 11 @ 3:54 pm
===You might want to brush up on your civics. House, Senate, Governor.===

Or even arithmetic. Nothing can pass without at least some Senate Dems.

Comment by Obamarama Tuesday, Apr 12, 11 @ 3:58 pm
Quinn will take anything at this point.

Comment by Time Keeps on Ticking, Ticking Tuesday, Apr 12, 11 @ 3:59 pm
Wordslinger,

The deal needs to be made among people who trust each other, at least a bit. My contention is that the deal, if any, will be made primarily between Madigan and Republicans. I theorize that there is an level of mistrust between Quinn and Republicans.

I don’t need to brush up on civics, and to Obamaram’s point, I’m pretty good at arithmetic and don’t need much help there. I am talking about my take on the politics. I just don’t feel that Quinn would be the grownup in the room with Republicans, but that Madigan would be.

Comment by Cincinnatus Tuesday, Apr 12, 11 @ 4:23 pm
Cincy -

That sounds like a plan that has been floated by several groups for at least 2 fiscal years. Maybe I’m not the one who’s late?

Comment by late to the party Tuesday, Apr 12, 11 @ 4:58 pm
So before January, the people who had the governorship, a Senate supermajority and one vote short of a supermajority in the House couldn’t cobble together an agreement, late to the party?

I’m shocked, SHOCKED! It certainly must be the Republican’s fault there is no plan to straighten out the budget, huh? Quinn doesn’t want a budget compromise. He want to ram his agenda down the Republican’s throats.

Comment by Cincinnatus Tuesday, Apr 12, 11 @ 5:33 pm
Cin,
There are two plans neither of them are realistic. And the Republican Senate and the Gov aren’t capable of finding the logical solution so it is up to MJM and Cross..Everyone else will have to take credit for the realistic outcome of a conservative budget and borrowing to smooth out cash flows.

Comment by time keeps on ticking, ticking Tuesday, Apr 12, 11 @ 7:38 pm