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Guv proposes fiscal “solutions”

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Illinois

* 11:36 AM - From a press release…

Citing the impact of the national economic crisis on Illinois’ revenues, Governor Rod R. Blagojevich today announced a four-part plan to manage the state’s $2 billion fiscal year 2009 budget deficit.

The Governor’s proposed plan includes passage of the Emergency Budget Act, which would give the Governor and other constitutional officers added authority to help them make additional cuts, a request to Congress for increased federal stimulus aid, and further administrative reductions in the agencies. In addition to these budget solutions, the Governor is also proposing short-term borrowing which will help manage the state’s cash flow and pay providers in a more timely matter. […]

The Governor’s plan includes the following components:

Continued Belt Tightening – The Governor has already taken fiscally responsible steps by reducing the FY09 budget passed by the General Assembly by $1.4 billion, ordering all agencies to reduce spending by 3%, reducing the cost of core services, and decreasing headcount. The state will continue to find efficiencies and savings in the agencies through further reserves and spending freezes while still providing Illinoisans with core services.

Emergency Budget Act – The Governor will propose legislation to give him the authority to hold back in contingency reserve as much as 8 percent of total appropriation and distributions for all General Funds spending […]

Increased Federal Stimulus – Today Governor Blagojevich will send a letter to the congressional leadership detailing the effects that the poor economic condition has had on Illinois. The letter focuses on the areas that the State has identified with the greatest impact and requests more than $1 billion annually over the next three years. […]

Short-Term Borrowing – While short-term borrowing will not solve the budget deficit, the state needs to pay vendors on time and manage the state’s uneven cash flow. The Governor, the Comptroller and the Treasurer are currently working together on the borrowing plan. […]

This isn’t normal short-term borrowing. The comptroller wants to borrow money under an obscure constitutional provision that allows repayment within a calendar year, instead of during the same fiscal year. The Senate Republicans and Speaker Madigan aren’t thrilled with the idea, to say the least.

posted by Rich Miller
Tuesday, Nov 18, 08 @ 11:38 am

Comments

8% holdback? Is this on top of the 3% reserve now? Either way, that is a huge #.

Comment by How Ironic Tuesday, Nov 18, 08 @ 11:40 am
The Governor just needs to stop spending the money. Make the government smaller and let the “people” make the decisions. The Reps that the villages hire to speak for them don’t do squat so we need to cut the Bozo’s out, and let “the people” do the talking.

Comment by Boscobud Tuesday, Nov 18, 08 @ 11:46 am
Governor will propose legislation to give him the authority to hold back in contingency reserve as much as 8 percent of total appropriation and distributions for all General Funds spending

I am sure the Speaker is just so warm and fuzzy with this part.

Can you say “club of clout”? I knew you could.

Comment by Pat collins Tuesday, Nov 18, 08 @ 11:59 am
The impact of that 8% hold back would be devastating to human services throughout the state.

Comment by montrose Tuesday, Nov 18, 08 @ 12:02 pm
== Today Governor Blagojevich will send a letter to the congressional leadership detailing the effects that the poor economic condition has had on Illinois. ==

No doubt, the current economic slowdown, recession, or whatever you want to call it has had an effect. However Illinois would be in this same position no matter what the national economic picture.

Six straight years of deficit budgets, all approved by the house and Senate Democrats, and then signed off on by the governor. Then he wants to point the finger at the national economic crisis?

I raelize its a press release, and I shouldnt expect the whole truth. However Rod might do well to start memorizing the following phrase “I swear to tell the whole truth, and nothing but the truth, so help…..”

Comment by Speaking At Will Tuesday, Nov 18, 08 @ 12:07 pm
Speaking at Will is so correct to say this is not a consequence of the federal economic picture but 6 years of not dealing with the real issue of the structural deficit in our state’s budget. Look where “No new taxes on the people” has gotten us - Nice legacy to our future generations Governor.

Comment by Collar Observer Tuesday, Nov 18, 08 @ 12:12 pm
Hmm….looks a lot like my plan. Maybe I’ll vote for him in the 2010 primary.

Comment by Cassandra Tuesday, Nov 18, 08 @ 12:16 pm
And Cassandra finally jumps the shark.

lol

Comment by Rich Miller Tuesday, Nov 18, 08 @ 12:20 pm
I don’t know that its THAT obscure; its been used before.

Comment by steve schnorf Tuesday, Nov 18, 08 @ 12:21 pm
Yes, it’s been used before, but it’s not a well-known provision. In fact, it’s probably mostly unknown, hence, obscure.

Comment by Rich Miller Tuesday, Nov 18, 08 @ 12:26 pm
Ah yes….

A rescue promised by the same persons who got us in this mess. I feel so secure…..

Is there a kitty in the room?

Comment by Plutocrat03 Tuesday, Nov 18, 08 @ 12:38 pm
It looks to me as though the planets are beginning to line-up for a substantial increase in general revenues over the objections of the Governor. It may be sold as a “temporary surcharge,” but if it’s going to happen, it will be this session.

Comment by David Starrett Tuesday, Nov 18, 08 @ 12:48 pm
How about this radical idea, cut wasteful spending. Remeber the legislative pay raises? What was that, like 12%?

Or how about that 2 billion in “secret” spending by JUST Sen. Jones and the SDEMs that we still don’t know where it went because they not only refused the FOIA asking about it, they are still stone walling Judicial Watch after they filed suit too. Let’s not forget the Loop Lab school, the 25k “gifts” by Sen. Hendon and all those no-bid contracts that prevent cost-savings by having vendors compete for the biggest pieces of the state’s business.

Comment by John Bambenek Tuesday, Nov 18, 08 @ 12:49 pm
“The Governor’s proposed plan includes passage of the Emergency Budget Act, which would give the Governor and other constitutional officers added authority … ”

it’s not a crisis, it’s an opportunity

everything’s a power struggle

Comment by BannedForLife Tuesday, Nov 18, 08 @ 12:51 pm
Yeah, I kinda doubt there’s much appetite in any caucus for any plan that “would give the Governor added authority.”

Comment by The Emperor Has No Hairbrush Tuesday, Nov 18, 08 @ 1:02 pm
What about the best plan they had to not pay the bills?

Comment by Wumpus Tuesday, Nov 18, 08 @ 1:05 pm
I don’t care who’s plan it is, or who supports it. That state owes real people a lot of money. If you want to cut services–fine! Just don’t expect people to go begging the banks to finance your short falls. Pay your bills or don’t ask for the services! Fix this mess and move on. Do your jobs.

Comment by Anonymous Tuesday, Nov 18, 08 @ 1:05 pm
This bill needs an amendment saying that anyone voting for it must immediately report to their nearest mental facility for confinement for the balance of their terms.

Comment by A Citizen Tuesday, Nov 18, 08 @ 1:06 pm
Still a widespread epidemic of head-in-sand-itis

Comment by GoBearsss Tuesday, Nov 18, 08 @ 1:11 pm
This “Emergency Budget Act” is the most brazen power grab I have ever seen. In effect, the Governor is asking the General Assembly to cede its approprations power to the Executive over an amount not to exceed 8% of the budget. In reality, that would mean any appropriations bill would be meaningless, with real control over what money gets spent where resting solely at the Governor’s discretion.

No! No! No! No! No! Let the Governor recommend cuts and changes to the GA, then let it do its duty, and let him live with the results.

Years ago it was reported the Governor didn’t really want to solve the funding shortfalls because of all the opportunity they provided to shift funding to his priorities under the guise of emergency circumstances. Whether such stories were true or not, this proposal is certainly in line with such a strategy.

Such a bill should be anathema to the members of the GA. If it ever passes, lawsuits to declare it unconstitutional will surely follow.

Comment by Oberon Tuesday, Nov 18, 08 @ 1:11 pm
Steve and Rich, If I recall correctly, the Edgar administration in its first budget issued commercial paper to shorten the payment cycle to Medicaid vendors. Comptroller Netsch and Treasurer Quinn had to sign off, under the constitution.

The private sector guy who brought the deal to Edgar was John Glennon, if memory serves.

Comment by wordslinger Tuesday, Nov 18, 08 @ 1:12 pm
Good thing that the courts have shut down the Governor’s health care expansion that would have cost another $1 billion that we don’t have.

1. No new programs
2. Reduce spending and tighten the belt
3. Then figure the deficit and go from there.

Comment by Health Care Tuesday, Nov 18, 08 @ 1:15 pm
The Governor has implemented spending reserves almost every year since he was first elected. So why does he need emergency legislative authority to reserve 8% of GRF spending? Am I missing something?

Comment by Budget Watcher Tuesday, Nov 18, 08 @ 1:15 pm
“Governor’s health care expansion that would have cost another $1 billion”

fantasy land…

Comment by GoBearsss Tuesday, Nov 18, 08 @ 1:22 pm
More power to the man who thumbs his nose at JCAR at every turn? Sounds like a red herring - Blago knows he’ll never get the GA to buy in, and can then point the finger at the evil legislators for being idle.

Comment by The Doc Tuesday, Nov 18, 08 @ 1:23 pm
Go begging to the Feds, like every other deadbeat in the country? Borrow a little more on top of the debt that already goes unpaid? This is a plan??

Comment by Skirmisher Tuesday, Nov 18, 08 @ 1:33 pm
wow–8% of the GRF will end up in the Gov’s pet projects, and of course fuel for the State Plane.

Comment by He Makes Ryan Look Like a Saint Tuesday, Nov 18, 08 @ 1:37 pm
God asks for 10 percent, Rod only asks for 8. What a bargain!

Comment by Vote Quimby! Tuesday, Nov 18, 08 @ 1:55 pm
The Speaker will not agree to anything the Gov wants (duh) or anything Hynes suggests. The 2010 governor’s race began a long time ago…

Comment by Howard Hughes Tuesday, Nov 18, 08 @ 2:03 pm
Article IX, Section 9(c) of the Illinois Constitution says:

“State debt in anticipation of revenues to be collected in a fiscal year may be incurred by law in an amount not exceeding 5% of the State’s appropriations for that fiscal year. Such debt shall be retired from the revenues realized in that fiscal year.”

The very next section, 9(d) says:

“State debt may be incurred by law in an amount not exceeding 15% of the State’s appropriations for that fiscal year to meet deficits caused by emergencies or failures of revenue. Such law shall provide that the debt be repaid within one year of the date it is incurred.”

How does one section merit the description “obscure”? That’s such a journalist’s expression, loosely translated as “something I didn’t know about”. Closely related to the journalist’s expression - “it is not known what the President’s advisors have recommended”, when of course, it’s pretty certain that many people know, e.g., the President; just the journalist who does not.

Comment by Anonymous Tuesday, Nov 18, 08 @ 2:03 pm
It’s obscure because it’s both not well known and rarely used.

Comment by Rich Miller Tuesday, Nov 18, 08 @ 2:05 pm
Giving the car keys to a 10 year old is about as good of an idea.

Comment by Dan S, a Voter and Cubs Fan Tuesday, Nov 18, 08 @ 2:08 pm
Time out everyone. This is nothing but political cover for the Governor.

The Governor already has the authority to order state agencies not to spend money. He doesn’t need the legislature’s permission to withhold 8% (or 80% for that matter) of state agency budgets (which constitute the bulk of the budget).

The Governor is just trying to spread the blame and pain around so he doesn’t have to take responsibility.

Comment by Old Elephant Tuesday, Nov 18, 08 @ 3:44 pm
Based on previous comments by “Judgement Day,” I would not take action on anything the governor suggests on a Wednesday, because you never know what might happen on Thursday.

Comment by Secret Square Tuesday, Nov 18, 08 @ 4:00 pm
You people are really smart. Thanks

Comment by Wumpus Tuesday, Nov 18, 08 @ 4:00 pm
Add Blago to the list of shameful Chitown Pols with their hands out. I’m sure President-Elect Obama loves Chicago and Illinois, just not some of the politicians and their brazen “Now we’ll get ours” attitudes.

Comment by Crystal Clear Tuesday, Nov 18, 08 @ 4:09 pm
Another reason why we should borrow short term and wait for the federal bailout: Obama met with top business leaders and they recommended a $500 to $700 billion dollar government stimulus package. Yup. And they are probably all Republicans.

Now, you know that no administration is going to pour out even a couple hundred billion without giving a substantial chunk to the states. Christmas is coming, so let’s ease up on the tax increase talk.

Comment by Cassandra Tuesday, Nov 18, 08 @ 4:53 pm
Wordslinger, both forms of short-term debt have been used in the past 18 years, almost always to deal with Medicaid shortfalls because of the immediate 50% return we get from the feds. It is important to remember that the money isn’t new revenue, its money pulled forward from future budget cycles. It still is usually a good move when payment cycles are this long.

Comment by steve schnorf Tuesday, Nov 18, 08 @ 9:46 pm
Are we sure that Milarod is not related to Henry Paulson??

Comment by Disgusted Tuesday, Nov 18, 08 @ 11:24 pm
If the governor doesn’t need legislative permission to simply withhold any percentage of a state budget, the only reason I can think of why he would want it is because he intends to move that money around for his own pet projects (health care, most likely) and be able to claim that the GA authorized him to do so.

Comment by Bookworm Wednesday, Nov 19, 08 @ 6:44 am
I agree with Howard Hughes. The Speaker has no interest in solving problems — regardless of how many people it fiscally hurts. All he cares about is getting his kid elected to Gov and putting his pal in as the Senate President. How nice, Cullerton could come over to the Madigans for dinner and decide what should happen in Illinois — I mean the State of Chicago.

Comment by anon Wednesday, Nov 19, 08 @ 7:55 am