Tuesday, February 08, 2011
 
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Democrats seek bipartisan support for borrowing measure

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[February 08, 2011]  SPRINGFIELD -- Illinois lawmakers will have their work cut out for them when they reconvene Tuesday as they work to finally pay off the state's $6.6 billion in backlogged bills to vendors.

In its current form, Senate Bill 3 calls for borrowing $8.75 billion to catch up on payments to schools and universities, social service providers, employee health insurance, and corporate tax refunds.

Brad Hahn, a spokesman for Comptroller Judy Baar Topinka, said Topinka is always hesitant to borrow but "is willing to have that conversation if it is in the best long-term financial interest of the state."

A spokeswoman for the governor's office said that time has come.

"By getting this debt restructuring bond, we are able to pay those bills immediately and provide relief to vendors who have been waiting a long time for payment," said Gov. Pat Quinn's budget spokeswoman Kelly Kraft.

State Sen. Dave Syverson, R-Rockford, and Sen. Sam McCann, R-Carlinville, however, aren't sold on the idea.

"Borrowing very well could play a key role, but in the absence of reform it's going to put us in a worse situation than we are currently in," Syverson said.

"We need to consider all options to best manage the resources we have and make sure we do not increase spending until our bills are paid," McCann said.

Syverson wants to see more focus placed on raising revenue and cutting spending in areas such as Medicaid and pensions.

"What we've been saying for eight years is that it's time to act like an adult and be responsible. If we get a handle on our spending, we can grow out of this mess," said Syverson, who pointed to fears that the bonds will be used to pay into the state's pension system instead of unpaid bills.

Kraft pushed aside that claim, saying: "This is a restructuring of debt that we already owe. It's not additional borrowing."

The measure is similar to a plan from the previous legislative session and calls for the bonds to be paid over 14 years by using 0.5 percent of the income tax. Last month, lawmakers approved and Quinn signed into law a historic 67 percent hike in the personal income tax.

A portion of the income tax already carves out a method for the state to pay its backlog of bills, Sen. John Sullivan, D-Rushville, said, but time is of the essence.

"If we wait and use the half a percent increase in the tax to pay the bills, then -- (for) those vendors and the school districts and the people who are owed the money -- it's going to be not months, but years until they are going to get paid," Sullivan said.

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Some Democratic legislators see the borrowing issue as a political ploy by Republicans to force reforms on other issues, such as workers' compensation, since a super-majority vote is needed for any borrowing legislation. Democrats don't hold a super-majority in either the House or Senate after the November elections, so Republican votes are needed.

"I don't think any of them disagree that the state needs to pay their bills, and to do that is going to take borrowing. We've identified the revenue to repay those bonds. ... What they have said is that this is an opportunity to use this issue as leverage," Sullivan said.

A spokeswoman for the Senate president agreed.

"If there is a secret Republican plan to pay nearly $8 billion in bills without a form of restructuring, we would love to see that plan," said Rikeesha Phelon, spokeswoman for Senate President John Cullerton, D-Chicago.

Syverson said the time is right to look at reforms.

"I'm cautiously optimistic that (Democrats are) willing to seriously address some of those issues. If they are, then I think (Republicans) would be certainly supportive of this concept of borrowing," Syverson said.

If approved, legislators anticipate that the plan would go into effect immediately.

Rep. Frank Mautino, D-Spring Valley, who pushed a similar bill during the lame-duck session, urged speed.

"If we do not pass the bill, ... it would take four to six years to get our bills current, and that's not acceptable," Mautino said.

[Illinois Statehouse News; By MELISSA LEU]

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