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* Treasurer Mike Frerichs speaking today…
“The State of Illinois has been around for nearly 200 years… For 200 years we’ve done annual budgets. It has happened. It can happen. The only reason it’s not happening is because some people don’t want it to happen.”
* Raw audio…
* Frerichs was elaborating on this press release…
The state of Illinois earned $7.8 million less in investment income the first quarter of 2016 as a result of the budget impasse, Illinois Treasurer Michael Frerichs said today. That translates into projected missed earnings of $31.2 million for 2016.
Threats of unplanned fund sweeps and the need to pay court-ordered bills required the treasurer’s office to make short-term investments that prioritized cash availability rather than longer-term, higher-yielding investment opportunities.
“A budget is a spending plan. Without a spending plan, it is very difficult to know what money is needed for basic government operations and what money for normal investments,” Frerichs said. “The law requires us to have money available to pay bills. The inability to adequately plan investments rips money out of the pockets of every person in our state, especially hurting those on the margins such as the poor, senior citizens, and children.”
Metropolitan Family Services of Chicago is among the service providers that essentially has lent the state of Illinois money because the state has not paid its bills.
“By the end of FY16, Metropolitan will be owed $2.6 million from the state of Illinois for contracted services that have not been paid. In order to keep core services open, we have been forced to tap our own credit and serve as involuntary lenders to Illinois. All year long, low-income families and not-for-profit providers have suffered, footing the bill for problems they did not create. The lack of a state budget is a structural failure that is damaging our economy, hurting thousands of people, and causing irreparable harm to communities served by organizations such as Metropolitan Family Services,” said Taneka Jennings of Metropolitan Family Services.
posted by Rich Miller
Tuesday, Jun 14, 16 @ 12:42 pm
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if only they hadnt started shorting the pension fund 199 years ago…..
Comment by Ghost Tuesday, Jun 14, 16 @ 12:45 pm
“some people..” Pure courage Mike.
Comment by old pol Tuesday, Jun 14, 16 @ 12:50 pm
==A budget is a spending plan==
No kidding.
He voted for the last two out of balance budgets, or =spending plans=, Illinois had. Spending plans are easy. Balancing spending and revenue is hard.
Comment by Formerly Known As... Tuesday, Jun 14, 16 @ 12:56 pm
@FKA
A budget is the authority. When one is passed, and it is out of balance on paper, additional cuts under the governor, or additional revenue via the legislature can still be sought. You can always balance a budget after it is passed.
Comment by Ducky LaMoore Tuesday, Jun 14, 16 @ 1:06 pm
State loses $30 million due to failed find sweep plan and then state millions to BigBrain’s 1%er pals because his lawyer from a bond prospectus hintin’ at default for no reason other than hikin’ interest rates. Wonder how the G looks at those schemes?
Comment by Annonin' Tuesday, Jun 14, 16 @ 1:08 pm
Ducky - what’s your aversion to passing a balanced budget in the first instance?
Comment by old pol Tuesday, Jun 14, 16 @ 1:09 pm
Actually it hasn’t been that long since we didn’t do annual budgets. No institutional memory at the Treasurer’s office?
Comment by Anonymous Tuesday, Jun 14, 16 @ 1:12 pm
There’s no question that the state is lacking a spending plan and it’s having a serious impact on the state. However, I doubt the Treasurer is correct when he says that “for 200 years we’ve done annual budgets.” I’m sure Illinois has done appropriations, but that isn’t the same thing as an annual budget. Annual state budgets became popular in the early 20th century. In Illinois the annual budget and administrative code for state government is attributed to Governor Lowden in 1917.
Comment by muon Tuesday, Jun 14, 16 @ 1:14 pm
Sorry. Anon 1:12 is me. My phone deletes my name a lot
Comment by Steve Schnorf Tuesday, Jun 14, 16 @ 1:35 pm
===Ducky - what’s your aversion to passing a balanced budget in the first instance?===
Political reality. A budget is merely the authority to spend. The governor is basically holding himself hostage not signing a budget. He could have signed the budget and said 15% off the top to his agencies. Just because money is appropriated does not mean it HAS to be spent. So if we pass any sort of budget framework, it can always be tweaked later. I would like to see a complete holistic approach and a balanced budget. That is not reality with the personalities that control our government.
Comment by Ducky LaMoore Tuesday, Jun 14, 16 @ 1:43 pm
Rich, if anyone has a complete list of all the non-profits, for-profits businesses, organizations, state offices, state workers, etc. which the State has owed money for a year, please post it. Thanks
Comment by Mama Tuesday, Jun 14, 16 @ 1:44 pm
Schorf -
How would you describe this unprecedented situation we find ourselves in, 16 days from the end of a fiscal year with no budget enacted for about what - 90% of our spending?
Because whether you call it a lack of an “annual budget” or something else, it is an unprecedented failure by an administration at least in magnitude, isn’t it?
It is passed time to be frank about just how much of a disaster the Rauner administration has been so far.
Perhaps as someone who demonstrated great success passing balanced budgets for Republicans despite - or perhaps regardless of Mike Madigan is a better term - you can offer some helpful guidance to all of us on what the GOP could do differently?
That might be helpful.
Comment by Juvenal Tuesday, Jun 14, 16 @ 1:46 pm
“A budget is a spending plan.”
Well, there you have it … I guess.
Comment by Georg Sande Tuesday, Jun 14, 16 @ 1:48 pm
Delighted to see these profound and wise observations from the Treasurer. I’m sure his leadership really will be key in breaking through.
Comment by Indochine Tuesday, Jun 14, 16 @ 2:04 pm
===It is passed time to be frank about just how much of a disaster the Rauner administration has been so far===
And yet Frerichs was not.
Comment by Rich Miller Tuesday, Jun 14, 16 @ 2:07 pm
- Ducky LaMoore - @ 1:06 pm:
“You can always balance a budget after it is passed.”
Someone should tell the governor.
Comment by Mama Tuesday, Jun 14, 16 @ 2:09 pm
Sande:
You may think that doesn’t have to be explained to the public.
According to the research from the Frameworks Institute, you are wrong:
1. Budgets and taxes are disconnected concepts.
The people we interviewed were overwhelmingly unable to link these concepts and even those who saw some connection, for example, that spending is linked to revenue, were unable to elaborate or use this relationship generatively. Informants stumbled again and again in both directly connecting the concepts and in more indirect tasks of narrating situations, explaining decisions and solving problems that required the integration of the two concepts.
4. Budgeting in the abstract is difficult to understand, so unproductive default models of
personal budgeting are frequently relied on.
Because public budgeting is a fairly abstract
construct to most people, it was not surprising that our research informants relied on patterns
of reasoning derived from personal experience to try to organize their understanding of how
budgets should work. They readily evoked comparisons to personal or household budgeting,
in other words, and so focused largely on budget balancing — ensuring spending does not exceed income — taking efforts to reduce debt, etc.
We see this played out every day right her on Capitolfax, among folks who presumably have an above average understanding of state government. But as the research shows, even among the selective group of supposed insiders, many have an understanding of budget-making that is too rudimentary to tackle the difficult task of devising a set of concrete, measurable goals, prioritizing them, developing competing plans for achieving them, and estimating the cost of their implementation. Let alone figuring out how to pay for them.
As I am sure Schnorf can tell you, it isn’t anything like “balancing your family budget.” It is also much different than assembling a company budget, because companies are driven by a single objective, while society has many competing and incomparable objectives.
Comment by Juvenal Tuesday, Jun 14, 16 @ 2:16 pm
I trust this brave statement will help get Mike’s name into the Democrats’ conversations about their 2018 gubernatorial nominee.
Comment by jim Tuesday, Jun 14, 16 @ 2:22 pm
Juvenal, I’m just pointing out that before our current constitution we did 2 year budgets. As to your question I think the most realistic answer is simple: the 5 tops have to agree. For the past year that has been missing, I think primarily because the Governor is asking tougher questions than have been asked in the past. I think that is good, but I sure wish some way forward could be found
Comment by Anonymous Tuesday, Jun 14, 16 @ 2:40 pm
Hey Juvenal,
You totally missed the point. A budget is not merely a spending plan; although Springfield Democrats typically think that these days. No, it’s not enough to just lay out a spending plan to constitute a budget, but a funding mechanism for that spending plan is also needed.
So thanks for your unnecessary bluster, but most people — you, Frerich’s & other Springfield Dems. nothwithstanding — know that a budget is: “An estimate of income and expenditure for a set period of time.”
Comment by Georg Sande Tuesday, Jun 14, 16 @ 2:48 pm
the cry for a BIMP i guess does not sound cool as the demand for a budget….
Comment by Ghost Tuesday, Jun 14, 16 @ 3:13 pm
So thanks for your unnecessary bluster, but most people — you, Frerich’s & other Springfield Dems. nothwithstanding — know that a budget is: “An estimate of income and expenditure for a set period of time.”
I think I have to agree with GS this time, the Madigan Dems really screwed-up when they expired the tax increase in deference to Gov. Rauner. - They screwed-up they trusted Rauner’s savings numbers.
Comment by Jo Dirte Tuesday, Jun 14, 16 @ 4:40 pm
Indochine
+1 with a LOL
Comment by Gone Tuesday, Jun 14, 16 @ 5:02 pm
Great work Juvenal
Comment by Honeybear Tuesday, Jun 14, 16 @ 6:18 pm
indochine 2:04 - hilariously spot on
Comment by Wake up Tuesday, Jun 14, 16 @ 8:17 pm
==additional cuts under the governor==
Rauner offered to take ownership of the budget and the cuts if the GA didn’t want to compromise on a combination of cuts, revenues and reform. The GA said No.
He was willing to take the credit and blame for the entire budget. He offered to make all the cuts necessary this year if he was also given temporary freedom to manage state money, or as he said =the flexibility to reallocate resources and make reductions to state spending as necessary=, should the GA not pass a balanced budget. They said No to a balanced budget and also said No to SB 2789 =the Unbalanced Budget Response Act=. That seems a bit like tying both his hands behind his back imho.
Comment by Formerly Known As... Wednesday, Jun 15, 16 @ 3:14 am
Sande -
The Constitution actually prohibits including anything but spending in an appropriations bill.
You are simple wrong.
Comment by Juvenal Wednesday, Jun 15, 16 @ 9:36 am