Tuesday, May 03, 2011
 
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Senate may be roadblock for Quinn's latest bill pay plan

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[May 03, 2011]  SPRINGFIELD -- Gov. Pat Quinn has a new idea to pay off the state's $4.5 billion in overdue bills, but it seems to be hitting familiar snags.

InsuranceQuinn has drafted legislation that would allow him, among other things, to temporarily suspend payments to local governments in Illinois from the Local Government Distributive Fund.

Under the law now, municipalities and other local governments get a slice of many state taxes, like the income and sales taxes, which averages to be about $1 billion annually.

Quinn's plan would hold off paying local governments until the General Assembly could come up with $4.5 billion, either through revenue or general obligation bonds.

Exterminator

"As the budget process continues, we need to develop alternatives to address the state's backlog of bills," said Kelly Kraft, Quinn's Office of Management and Budget spokeswoman. "The $4.5 (billion) is the minimum the draft legislation stipulates that would be needed in the form of revenue or (general revenue) bonds to end the suspension of local distributive share."

But Quinn's proposal needs broad legislative support, something the governor's original idea for paying the bills -- borrowing $8.75 billion -- did not have.

Kraft said that Quinn isn't abandoning the idea of borrowing $8.75 billion. He's simply seeking this as a different possible solution.

Most, if not all, of the projected $33.2 billion to $34.3 billion in revenue for the upcoming fiscal year already has been allocated, or at least assigned to a general area, which leaves only borrowing for Quinn's plan.

Borrowing requires a three-fifths vote by the General Assembly, which means some Republicans would have to vote "yes."

Senate Republican Leader Christine Radogno said it isn't that her caucus is completely opposed to borrowing, but if it is to be considered, it must be considered within a bigger picture of belt-tightening.

Earlier this spring the GOP laid out a menu of more than $6.7 billion in possible cuts, out of which they say $5 billion worth of cuts must be made.

Radogno said Quinn has taken an uncompromising approach to the budget -- an approach that doesn't include any input from her party.

"I am really annoyed by this tactic of 'We're going to hold somebody hostage until the General Assembly does something,'" the Lemont Republican said. "That is not the way to solve this problem."

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Senate President John Cullerton, D-Chicago, said he believes the idea of borrowing isn't bad, but said he "is not interested in adding local government to the long list of state vendors and school districts and hospitals that are already waiting payment from the state," spokeswoman Rikeesah Phelon said.

"The Senate president agrees that (local governments) have a vested interest in seeing a refinance plan. He's not arguing against that," she said.

Phelon went on to say that another major reason Cullerton isn't willing to pursue the idea is because of Republicans' refusal to consider borrowing alone to pay off the old bills.

Library

The state already is three months behind, or just less than $300 million, on paying cities. Extending that would make it more difficult for cities to operate, said Roger Huebner, deputy executive director for the Illinois Municipal League.

"Imagine if you didn't know when you were going to get your next paycheck and your employer hasn't paid you for three months," Huebner said. "I mean, we have no alternative, but the money's due the cities."

Kraft, Quinn's OBM spokeswoman, said at least the Local Government Distributive Fund payments are only three months behind, compared with payments to health care providers, schools and social service providers. Those payments are six months late on average.

[Illinois Statehouse News; By ANDREW THOMASON]

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