SPRINGFIELD — Republican leaders Thursday renewed their opposition to Democratic Gov. Pat Quinn’s plan to borrow billions of dollars to pay off the state’s debt and overdue bills.
By Andrew Thomason
SPRINGFIELD — Republican leaders Thursday renewed their opposition to Democratic Gov. Pat Quinn’s plan to borrow billions of dollars to pay off the state’s debt and overdue bills.
Illinois Treasurer Dan Rutherford, Illinois Comptroller Judy Baar Topinka, state House Minority Leader Tom Cross and state Senate Minority Leader Christine Radogno held a joint news conference here to address comments Quinn made late last week.
“The very thought that anyone would consider borrowing as a solution to our problem is breathtaking. We cannot use borrowing as a crutch for a tax system and budgetary system that is just broken,” said Topinka, who is in charge of the state’s checkbook.
Quinn told a gaggle of reporters Aug. 11 that he would continue to push his plan for borrowing in the upcoming veto session in October, despite the Legislature refusing to support his original idea this spring to borrow $8.75 billion.
“The notion that you put your head in the sand and pretend these burdens don’t exist isn’t a good way to go,” Quinn said.
Quinn insists that the borrowing, which would be done by selling bonds, actually would be a “restructuring” of current debt by shifting the weight of Illinois’ obligations from school districts, medical vendors, local governments and businesses to the state.
“I’d rather have the state bear that waiting,” Quinn said.
The state has about 190,000 past due bills dating back to April that tally up to about $4 billion. In addition, the state owes corporate tax refunds, bringing the total due to about $8 billion.
Overdue bills continue to pile up despite an income tax increase passed in January that is asking individuals to pay about 66 percent more in taxes and businesses to pay 47 percent more in taxes. The new tax is estimated to bring in about $6 billion annually.
Republicans leaders Thursday said they advocate for more cuts to the state budget on top of a General Assembly approved budget that trimmed about $2 billion from Quinn’s introduced budget of $35.4 billion.
“We don’t believe, we don’t support, any further debt in the state of Illinois,” Rutherford said.
Any borrowing requires a three-fifths majority vote, and therefore Republican support would be required in the state House and state Senate. A scaled-back version of Quinn’s plan failed in the state Senate this spring, only managing to gain 19 votes in the 59-member chamber.
Cross, R-Oswego and Radogno, R-Lemont, said the state also needs to enact serious reforms to its pension and Medicaid systems.
“If we’re going to climb out of this hole in the next few years, borrowing is not the way to come out of it,” Cross said.
It will take “Medicaid and pension (reforms) and holding the line on spending,” he said. “I happen to think this year’s budget, while we would have liked even more cuts, started that process.”
Cross and Illinois House Speaker Michael Madigan, D-Chicago, worked together on legislation that would work to change the state’s pension system that has an unfunded liability — how much the state owes when compared with how much it has on hand to pay current and future pensions — of $80 billion.
Several organizations, however, peg the unfunded liability for the state’s five pension systems much higher than $80 billion. The American Enterprise Institute for Public Policy Research, a Washington, D.C.-based free market think tank, put the number at $190 billion.
Cross and Madigan’s plan would swap the burden of making up the growing costs of Illinois’ pensions from state taxpayers to state employees.
The measure creates a menu of three options:
Employees hired before Jan. 1 could keep their current benefits but would be asked to contribute more to them annually;
All employees could move to the benefits package created for people hired after Jan. 2, which means working longer to get a pension, the second most expensive option;
Any employee could move to a 401(k)-style, defined contribution package, the cheapest option.
The tiered system would go into effect for most employees, beginning July 1.
Cross and Madigan’s plan failed to come up for a vote in the Legislature’s spring session, though negotiations among Republicans, Democrats and state worker labor unions have continued through the summer, and the topic is expected to emerge in the fall veto session.