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* The state’s Coal Develpment Fund got an ironic early Christmas present: A lump of coal in its stocking…
The governor’s recent raiding of funds has emptied the state’s Coal Development Fund and Southern Illinois legislators believe the money won’t be seen again this year.
Gov. Rod Blagojevich used $10.2 million from the coal fund as part of a $27 million bailout of the Chicago Transit Authority and the Regional Transit Authority in the Chicago area last month. Susan Hofer, spokeswoman for the governor’s office of management and budget, said the movement of funds would not impact any current projects or programs. […]
The state Department of Commerce and Economic Opportunity has distributed more than $5 million in grants from the coal fund in each of the past two fiscal years, and Blagojevich set aside $17 million from the fund in June 2006 as part of an incentive program to attract the FutureGen project, a zero-emissions power plant. Two central Illinois cities, Mattoon and Tuscola, are among four finalists for the plant’s construction site against two Texas sites.
* And here’s another problem. The state collects a host of local taxes and then distributes them back to local governments (after taking a cut in most cases). But some of those checks haven’t been cut lately and that’s causing discomfort…
[The city of Bloomington] is waiting to receive more than $1 million in payments from the state for its portion of the income tax, but the checks have not been sent by Comptroller Dan Hynes’ office.
With the city’s cash reserves already strapped, city Finance Director Brian Barnes said the city will have a hard time paying its bills.
“We could run into a major cash flow problem if this keeps up,” Barnes said.
The City Council already has been struggling to cut a $3 million deficit from its $75 million proposed budget for next year.
The reason for the delay? There’s usually a cash-flow pinch in December, but it’s much worse this year, so the state is passing down its problems to the locals. Wonderful.
* You may recall that one of the items that Gov. Blagojevich vetoed from the state budget was operating cash for public television and radio. While not the sole source of WTVP Peoria’s current crisis, that veto didn’t help matters much. Bank of America is threatening to foreclose on a big loan next month and sell the station off in pieces…
Starting tonight, Peoria’s public television station wants your support like never before.
WTVP-TV Channel 47 needs $6.9 million - or enough, they hope, to satisfy Bank of America - by Jan. 15.
“They’ve indicated to us unless they’re paid they will put everything up for sale in one fell swoop or sell it in pieces, whichever is to their advantage,” WTVP president and CEO Chet Tomczyk said. “In which case, we go dark.”
*** UPDATE 1 *** From Comptroller Dan Hynes’ website comes this dire warning…
All state agencies, employees, state vendors and payees should be advised that the current delays affecting payments out of the state’s General Revenue Fund (GRF) are expected to continue and likely lengthen throughout the remainder of calendar year 2007 and into calendar year 2008.
Under optimal revenue conditions, or for payments from non-GRF funds, the Office of the Comptroller (IOC) can issue a warrant within 2-4 days after a proper voucher is presented to our office. However currently, substantially more GRF bills or vouchers have been submitted to the IOC than incoming revenues or cash on hand permits to be processed on a timely basis We do not anticipate that there will be sufficient GRF revenues to significantly reduce current payment backlogs for the near future.
Please note that while agency payrolls should not be impacted by these conditions, the majority of other payments out of the General Revenue Fund will continue to be delayed due to the lack of sufficient and/or timely revenues. At this time, these delays are in excess of 30 business days and are expected to increase over the next several months.
[Emphasis added]
*** UPDATE 2 *** And another one…
The state of Illinois is $1.6 million behind in paying the city of Springfield its cut of state income taxes, a problem that is growing statewide, according to Alan Henry, a spokesman for state Comptroller Dan Hynes.
“It’s about insufficient receipts to meet the state’s obligations,” Henry said. “Historically around now, the volume of bills exceeds revenue. That’s exacerbated by what appears to be a slowing of receipts.
posted by Rich Miller
Thursday, Dec 6, 07 @ 10:15 am
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I would say its time for all of these affected entities to turn up the pressure on the Speaker to pass a capital bill. The governor cant be solely responsible for all of this. Clearly there needs to be some new revenue and it is the Speaker that is trying to starve th state to hurt the governor.
The gov finally got his message on Chicago news last night when he was quoted as saying that downstate and suburban legislators, republican and democrat, will not vote for a chicago mass transit bailout without a capital bill to fix their roads, bridges, and schools. All of the other leaders are working together to resolve these issues — why wont Speaker Madigan work with them too to resolve these very serious issues?
Comment by Anon Thursday, Dec 6, 07 @ 10:21 am
Ok, Does this raid cause issues down the road for that ‘clean coal’ plant the state is pushing so hard for?
If I was a different state in the running for it I would point out that Illinois can’t keep it’s current funding commitments to coal. How can the other parties involved in the facility count on it to keep new ones.
Comment by OneMan Thursday, Dec 6, 07 @ 10:21 am
Anon,
In actuality, if the Governor was more “open minded” to compromise and agreed, even temporarily, to increase general state taxes, much of this mess would have been avoided and the state legislature would have been adjourned in May.
The problem, which is shared by many involved in state politics, is the lack of leadership of this Governor.
Comment by unclesam Thursday, Dec 6, 07 @ 10:29 am
All Governor Blagojevich’s raids of Illinois’s various pensions, funds, etc. are just a creative accounting scams. Governor Blagojevich’s greed and huge ego are destroying the State of Illinois.
ENRON was nothing compared to what Governor Blagojevich has done and still contiunes to do.
Comment by Leftfield Thursday, Dec 6, 07 @ 10:41 am
Anon…A capitla bill will have no impact whatsoever on the state’s ability to pay from GRF. Most capital project are bonded.
Comment by commonsense on the road Thursday, Dec 6, 07 @ 10:44 am
Could it possibly be that there will be more than one “Doomsdays” under the leaderless administration we are suffering? Guess we need another Special!
Comment by A Citizen Thursday, Dec 6, 07 @ 10:53 am
One Man, I respect your opinion, but the fact remains that the governor has made it clear since he first announced his candidacy in 2001 that he was opposed to raising income or sales taxes on working people. I think that he has demonstrated plenty of leadership on this matter and has made it clear to members of the GA that he will not support options that raise such taxes. I agree that compromise is an important component of leadership, but there is also room for rigidity when it comes to issues that are in serious conflict with one’s closely help political and economic philosophies.
IN short, it is the Speaker who needs to lead here and work with his members and the entire GA to resolve these state issues.
Comment by Anon Thursday, Dec 6, 07 @ 10:53 am
So, Anon, how would Madigan voting, right now this morning, for capitol bail out this state’s money mess in the present and very near future? You can’t believe these projects would begin instantly and make the money start rolling in.
Comment by Princeville Thursday, Dec 6, 07 @ 10:58 am
The state is going to mess around and loose any future coal mines and power plants, Taylorville and one other down south(coal gas.)by holding up funds In a time when we need jobs something needs to be done to secure the coal industy future, not take away from it.
Comment by He makes Ryan Look like a Saint Thursday, Dec 6, 07 @ 11:01 am
Anon,
This isn’t about taxes it is about money going where the GA says it should go, otherwise why have a budgeting process just let the governor put money where ever he feels like it.
He doesn’t want to raise taxes, fine. But you then have to live with the revenue you have.
There is an option for the CTA, it is to let doomsday happen and not take money from downstate road projects, coal development and who knows what else to prevent that from happening.
The legislature has the option of not ‘fixing’ the CTA problem so then the question becomes does the governor have the right to take money from any bucket to keep doomsday at bay.
I say no, again otherwise why have a budget?
Comment by OneMan Thursday, Dec 6, 07 @ 11:18 am
A budget is a spending plan - The legislature uses it’s “power of the Purse” through the budget process.
What the state is facing is a cash flow problem. If the cash flow problem is perceived as short term, then delaying expenditures can and will get an organization through the exercise. An alternative is to borrow the money to meet current obligations and yes replay the loan when revenue stream returns.
A cash flow problem that is more embedded in the finances of an organization or state are more insidious and the solutions are more painful.
1. Borrow long term and reduce expenditures to be in line with revenues to meet all future expenditures and debt retirement.
2.
1.
Comment by Bankman Thursday, Dec 6, 07 @ 11:28 am
A budget is a spending plan - The legislature uses it’s “power of the Purse” through the budget process.
What the state is facing is a cash flow problem. If the cash flow problem is perceived as short term, then delaying expenditures can and will get an organization through the exercise. An alternative is to borrow the money to meet current obligations and yes replay the loan when revenue stream returns.
A cash flow problem that is more embedded in the finances of an organization or state are more insidious and the solutions are more painful.
1. Borrow long term and reduce expenditures to be in line with revenues to meet all future expenditures and debt retirement.
2. Reduce program expenditures
3.
1.
Comment by Bankman Thursday, Dec 6, 07 @ 11:29 am
A budget is a spending plan - The legislature uses it’s “power of the Purse” through the budget process.
What the state is facing is a cash flow problem. If the cash flow problem is perceived as short term, then delaying expenditures can and will get an organization through the exercise. An alternative is to borrow the money to meet current obligations and yes replay the loan when revenue stream returns.
A cash flow problem that is more embedded in the finances of an organization or state are more insidious and the solutions are more painful.
1. Borrow long term and reduce expenditures to be in line with revenues to meet all future expenditures and debt retirement.
2. Reduce program expenditures
3. Raise revenues (taxes)
Delaying problematic cash flow as the state is during is not the answer
1.
Comment by Bankman Thursday, Dec 6, 07 @ 11:29 am
Its nice to know that the Governor might help to kill to kill a PBS station.
Comment by RMW Stanford Thursday, Dec 6, 07 @ 11:33 am
ANON
If the Gov. vowed to not raise taxes and he wants to live up to that, then it’s the Gov. responsibility to come up with a fix for mass transit and all the other financial problems facing our state.
The Gov. and Tom Cross proposed transferring money from the gas sales tax to support public transportation. Madigan was not in favor of this but as a gesture for compromise put it out for a vote in the house. Lo and behold , the Gov. and Cross refused to support their own initiative, and “their plan went down in defeat”.
The casino plan will not bring any money to solve the transit problem; this money is suppose to be for capital projects, and any money generated from this proposal is in the distant future.
What is Madigan to do to “lead” given the current state of affairs? It’s time to realize…….the Gov. is only interested in trying to embarrass Madigan, and paint him in a corner!
You may like or dislike Madigan, but never underestimate his abilities. Madigan lives in a circular world and will never be painted into a corner!
Comment by MOON Thursday, Dec 6, 07 @ 11:37 am
Of course. As Moon so accurately points out, I underestimate the Speaker’s abilities. I love how people trot this garbage out in the course of these discussions. This has nothing to do with doubting anybody’s abilities. The Speaker hasnt been where he is as long as he has because he lacks skills. There, now can we table that topic?
My point is that this transit issue cannot be solved without considering the transportation infrastructure needs statewide. The governor is working well with leaders from the other side of he aisle to ensure that their constituents needs are met. And, if this gaming bill passes, bonds can be issued to begin funding rather quickly. This would include funds for Chicago mass transit, as well as road projects and school construction statewide.
The Speaker needs to get on board with the gaming bill to provide the funding for the necessary infrastructure issues facing the WHOLE state.
Comment by Anon Thursday, Dec 6, 07 @ 11:47 am
Anon said [”C]learly there needs to be some new revenue and it is the Speaker that is trying to starve the state to hurt the governor.” Is it really clear that we need new revenue (higher taxes) or, as I suggest, is it more of a need for prudent fiscal management. If the Governor, as the Chief Executive Officer of the $50+ billion business cannot effectively manage existing cash flow, why in the world would we give him even more money??? There are not enough blank checks that could be written to solve all the problems of the state, make Bill happy, keep Rich employed and still maintain a healthy environment for business growth.
Despite efforts to the contrary, this is not about Madigan nor is it about Emil Jones or Tom Cross or Frank Watson. This is about the lack of vision and leadership from a squirrely Governor who is not fit for office.
Comment by DC Thursday, Dec 6, 07 @ 12:26 pm
DC
Amen brother: I need say no more!!!!!!!!
Comment by MOON Thursday, Dec 6, 07 @ 12:45 pm
The current budget is the Speaker’s budget minus the hundreds of millions that the Governor had the foresight to veto out. Madigan should tell us all where the money will come from.
Comment by Bill Thursday, Dec 6, 07 @ 1:01 pm
If the Governor plans to spend those funds on his moral priorities — funds, that according to Bill’s argument, have no source — wouldn’t that make Rodney equally as culpable of irresponsibile budgeting? I would have applauded Rod’s veto if he simply said we can’t afford this extra spending, but instead he circumvented the constitution, the Illinois Admin. Procedure Act and generally circumvented political common sense by announcing an expansion of health care without legislative authority. Perhaps the Governor should personally read the warning on the Comptroller’s website to see the consequences of such behavior. Bill, I agree with vetoing unnecessary spending, but the manner and the items vetoed defied logic.
Comment by DC Thursday, Dec 6, 07 @ 1:10 pm
The longer Dan Hynes’ name is attached to these fiscal problems, the more voters will tie him to them in their minds. If Dan wants a political office beyond being Comptroller, he needs to start insulating himself from these current and upcoming negative news stories.
He should start meeting with his advisors and start charting out a plan to keep him from pulled down with Blagojevich.
Comment by VanillaMan Thursday, Dec 6, 07 @ 1:26 pm
This is a bigger story than a reporter can delve into. It has zip to do with the Speaker, with the capital bill or with the gaming bill. The state cannot pay its EXISTING bills, the ones to municipalities, agencies and vendors with whom it has dealt for years. The well is running dry and the Comptroller acknowledges money won’t flow for another month or more.
And why is that? Instead of reporting that some human service agency or local government is owed millions by the state, some enterprising reporter should be digging into how it happened and how and when the state is going to be able to pay bills that it has historically been able to pay on a timely basis.
Comment by Ilrino Thursday, Dec 6, 07 @ 1:27 pm
Has anyone thought of this? Since the State is late on their payments to everybody they own any money to, has anyone asked what kind of late fees and interest the State is paying for being late? I bet you would fall off your stool if you knew.
Comment by Anono Thursday, Dec 6, 07 @ 1:47 pm
Bill
Madigan did tell you where the money would come from. With regards to transit funding, an increase in the sales tax on motor fuel in the area served by cta, metra, etc.
With regards to capital funding, Madigan has compromised and offered to support new casino license and new slots at the race tracks.
What Madigan doesn’t want is for certain politicians to rig the bidding process so a select few end up with the casinos.
Bill do you have a problem with Madigan’s solution?
Comment by MOON Thursday, Dec 6, 07 @ 1:51 pm
PS BILL
The Gov. foresight to veto certain things resulted in a half bridge. We should all have such foresight! LOL!
Comment by MOON Thursday, Dec 6, 07 @ 2:10 pm
Well ,actually, Moon, we were commenting on the current budget which has nothing to do with any of the things you mentioned other than the fact that it is not balanced due to insufficient revenues and therefore cannot provide funding for transit and capital. Everybody knew this including the Speaker, the President, Repubs and everyone else,even me. Its all this talk about the Gov’s lack of leadership, etc.
How about some leadership on the part of GA “leaders” and members? Here are two solutions to the problem.
1. Raise revenue (taxes of whatever kind)
2. Cut spending
Whatever the Governor does or says, it is possible for the GA to solve this problem. Why don’t they ?
lack of leadership? Lack of courage? The Republicans?
They, and many commenters here, want to blame everybody but the real ones responsible, the General Assembly!
Raise taxes.Cut spending.Solve the problems that have festered in this state for the last 4 decades.
Oh yeah, thats right this (’08) is an election year. Never mind. Just blame Rod. That’ll work.
Comment by Bill Thursday, Dec 6, 07 @ 2:17 pm
BILL
My hats off to you !
I have never met or seen a person with your twisted logic! You ignore the facts whenever it is for your convenience!
You missed your calling,you should be a fiction writer!
Comment by MOON Thursday, Dec 6, 07 @ 2:26 pm
Bill is right when he says that the budget was passed with insufficient revenues to cover the appropriations. He’s also right when he says that Madigan and the minority party knew this. My guess is they’re trying to make him cut deeper into a budget that doesn’t have many, if any, easy targets anymore. Ironically, the amendatory vetoes will help, although the healthcare expansion will create a larger structural budget problem in out years.
Someone should ask COGFA, which is essentially the GA’s version of GOMB, what they’re projecting for revenue shortfalls this year.
Comment by Budget Watcher Thursday, Dec 6, 07 @ 4:11 pm
Bill is absolutely correct.
SpinSisters give him a special prize —- ASAP.
Thank goodness he did not suggest we should have clipped about 2.5 billion smackaroonies out to really balanced the silly thing.
It is also good that he “forgot” we announced the plan to spend everything we cut on health care. Neverless SS — Slim and Red — will reward Bill for his outstanding work.
Comment by DumberThanYouThink Thursday, Dec 6, 07 @ 5:57 pm
I travel on state business using my personal credit card and they don’t pay me a penny of interest 3 or 4 months later when I get reimbursed.
Comment by State worker w/ an MBA Thursday, Dec 6, 07 @ 8:31 pm