Yesterday, word quickly spread that some relief could be on the way
to cash-strapped universities, human service agencies, and other
Illinois vendors anxiously awaiting
a collective $5.1 billion in overdue state payments. Gov. Pat Quinn
confirmed that by week's end, ...
Yesterday, word quickly spread that some relief could be on the way to cash-strapped universities, human service agencies, and other Illinois vendors anxiously awaiting a collective $5.1 billion in overdue state payments. Gov. Pat Quinn confirmed that by week's end, the state plans to issue $3.47 billion in general obligation bonds. Illinois will be reimbursed nearly $840 million as a result, of which $750 million would be sent along to the Comptroller Dan Hynes' office to start whittling away at the backlog. The bond deal isn't a surprise. Before leaving Springfield last spring, lawmakers agreed to issue the notes, which will come due in equal installments over each of the next five years. With so many vendors in line, it remains to be seen how the money will be divvied up, according to Hynes spokeswoman Carol Knowles, who spoke with Inside Higher Ed. "When you have a backlog as phenomenally large as Illinois has of more than $5 billion, it makes it very difficult to address all the emergencies," she said. "And you have to weigh how bad all the emergencies are.”
The real emergency is the inadequate revenue coming into the state's coffers. That's a point Quinn made clear at a press conference yesterday, where he reiterated the urgent need for an income tax increase, coupled with "tax relief" for lower-income households. "We've got to, sooner rather than later, come up with a fair plan to raise enough revenue to pay our bills," Quinn said, "but also cut taxes on people who need help the most." Watch:
Political science professor Dick Simpson from the University of Illinois at Chicago echoed that call earlier this week, saying during a Fox Chicago Sunday segment that failure to address the mounting debts this year "will hurt us for decades." Still, the tax increase proposal with the most political support -- State Sen. James Meeks' HB 174, which passed the Senate last May -- is stuck in the House. Meanwhile, as the Trib noted yesterday, lawmakers "lack of will to make tough decisions" is pushing the state's finances deeper into the abyss. And it's clearly having long-term, financial consequences, according to Bond Buyer:
Rating agencies have taken the state to task for the [tax increase] delay, citing it as a factor in negative rating actions because it has exacerbated the government’s growing liquidity problem and poor financial performance [...]
“The planned deferral of legislative action to address fiscal 2010 imbalances until at least February or March leaves little time in the fiscal year to take actions to materially reverse the trend of financial weakening,” [analyst Edward Hampton said].
Will 2010 be the year that lawmakers finally face up to reality? We'll see when the General Assembly returns to Springfield next week.