Quinn Wants To Borrow Billions, Consolidate School Districts

Updated 02/16/11 – 4:47 p.m.

SPRINGFIELD, Ill. (WBBM) — With an income tax hike already in effect, Gov. Pat Quinn has presented a budget plan that would not raise any new taxes or fees, but would still cut state aide to the poor, reduce a number of services and borrow billions of dollars to pay overdue bills.

The governor’s plan would spare education any major spending cuts, but Quinn said he wants to reduce the number of school districts in Illinois and make school districts pay a larger share of the cost of school buses.

LISTEN: Newsradio 780 Political Editor Craig Dellimore reports

“Our fiscal reality demands consolidation,” Quinn said, predicting the move could save $100 million a year.

Illinois currently has 868 school districts and previous consolidation efforts have failed. Quinn also proposed cutting $14 million the state spends on 45 regional education offices. He said the State Board of Education can take up their tasks.

And he said the state should reduce spending on bus transportation for students by $95 million. He said local school districts should shoulder that cost.

At the same time, Quinn said he wanted to increase spending on state-funded college scholarships for the needy through the Monetary Assistance Program — also known as MAP grants.

“We don’t want any state to out-educate Illinois,” Quinn said. “We must ensure that we have everyone acquire the skills demanded by the 21st century workplace.”

While the governor would increase spending on MAP grants, he said the state should eliminate its legislative scholarship program, which allows state lawmakers to hand out scholarships to people in their districts. The program has been under fire for years, as many lawmakers hand out the scholarships to friends, family members and political donors.

“College scholarships that are paid for by the state of Illinois should only go to those who have true financial need for them,” Quinn said.

The governor also proposed borrowing $8.7 billion to pay overdue bills and begin paying state vendors promptly again.

“We have $8.7 billion in unpaid overdue bills. We need to restructure our debt,” Quinn said. “Currently, Illinois pays its bills … six to eight months behind schedule. We force our universities, our service agencies, our companies doing business with the state to bear the burden of slow pay.”

Quinn said late payment to public transportation agencies forces them to pay more to buy new equipment and, as a result, hurts people who rely on public transit to get to work.

Quinn also said “vendors are not bidding competitively for our state business” due to late payments. He said bids for state work are often 6 to 10 percent higher than normal because businesses expect long delays in payment from the state.

The governor said Illinois paid $700 million to $1 billion more on state contracts than it should have in the past fiscal year as a result of late payments.

“We must have financial stability in Illinois. We must have it,” Quinn said. “Budget stability is crucial to the success of businesses, families and the state of Illinois. It’s a critical factor in attracting businesses … and creating jobs.”

House Speaker Mike Madigan (D-Chicago) says by Gov. Pat Quinn’s standards, today’s (Wednesday’s) budget speech was a good one.

Madigan says Quinn is overspending, though, by about $700 million. “When we raised the Illinois income tax, we committed to live under spending controls,” Madigan tells public television’s Illinois Lawmakers. “And we feel that this budget is in violation of those spending controls by about $720 million.” Madigan did say he’s willing to negotiate with the governor and with Republicans on borrowing proposals.

LISTEN: Newsradio 780’s Dave Dahl reports

Republicans are predictably unimpressed. “We need to focus on controlling spending,” says Senate Minority Leader Christine Radogno (R-Lemont).

Illinois Republicans applauded Quinn for preaching fiscal restraint and job creation in his budget proposal, but they criticized his call for more spending.

Even before Quinn officially presented his budget plan, Republican lawmakers were saying they didn’t like it.

“The governor’s $8.75 billion spending proposal is dead on arrival in the Senate,” state Sen. Matt Murphy (R- Palatine) said earlier this week. “We will not continue to help feed the governor’s insatiable appetite for more spending.”

Senate Republicans say not enough spending cuts have been outlined by the governor following last month’s income tax increase, which took effect retroactively at the beginning of this year.

House Minority Leader Tom Cross says the speech was notable for what it left out. “We’ve got an $80 billion unfunded liability on pensions. If we don’t address it, we may not have a pension system down the road,” says Cross. “He didn’t talk about health care for retirees. He didn’t talk about health care for retired community college folks.”

“There are lots and lots of tough decisions to be made; a lot of heavy lifting,” says Madigan. “And this session will not be for the faint of heart.”

The Republicans’ solution? Deeper spending cuts.

“We shouldn’t eliminate the concept of across-the-board cuts,” said Senate Minority Leader Christine Radogno (R-Lemont). “I know that’s been somewhat ridiculed, but (Cook County Board President) Toni Preckwinlke just did 16 percent. That directive has not come down and I think we need to see that happen,” she said.

“We will not be able to get this governor, who has demonstrated a lack of willingness to cut spending, to actually go through and really cut spending, if we allow him to borrow yet another $8.75 billion on top of the $7.3 billion he just took from the people of this state with higher taxes,” Murphy said.

While Radogno and the other Senate Republicans have preached cuts, they’ve offered few specifics, only saying that everything should be on the table for reduced spending.

Republican State Treasurer Dan Rutherford said he opposes the borrowing plan, but pledged to cooperate.

“The number one priority for all of us at the Capitol must be proper cash management. Our state continues to face a multi-billion dollar hole. We need to look for a logical and cost-effective restructuring of our current debt,” Rutherford said. “I call on my fellow government leaders to work together to find solutions that don’t require long-term, back-loaded borrowing that families will be paying off for more than a decade.”

GOP Comptroller Judy Baar Topinka says she’s not opposed to borrowing to pay old bills but not with new spending planned in the budget.

There will also be other cuts under Quinn’s plan. Eliminating the state’s Prescription Assistance Program is expected to cut $100 million, and cutting Medicaid reimbursement rates is expected to save more than $500 million.

Quinn also said he would create a tax code reform commission with the goal of overhauling the state’s tax code.

Quinn has long pushed for a graduated income tax that would tax lower-income residents at a lower rate than higher-income residents, rather than the current fixed income tax rate. But such a change would require a change to the state constitution and previous efforts to switch to a graduated income tax have failed.

The governor also said he wants to double the number exports from Illinois over the next five years. Quinn noted that as a result of Chinese President Hu Jintao’s recent visit to Chicago, trade officials reached an agreement to sell 25 percent of the state’s soybean crop to China, a $1.8 billion gain for the state.

Quinn also said he was creating an “Innovation Council” meant to find creative ways of boosting the state economy. He said it would be led by Brad Keywell, co-founder of the Internet coupon site Groupon.

Quinn said the council will encourage cooperation among business, scientists, investors and universities.

“We will create the jobs of today and tomorrow right here in Illinois,” Quinn said.

Meanwhile, human service groups were speaking out against the possibility of deep cuts that they feared would harm the sick, poor and elderly.

Overall spending under Quinn’s plan would increase about 5 percent as last month’s income tax increase is put to use — for instance, paying pension costs for which the state had to borrow money in the current budget.

But Quinn’s chief of staff Jack Lavin said the increase obscures the fact that the plan includes more than $1 billion in spending cuts. The rates Illinois pays for medical care to the poor would be cut $552 million, or about 5 percent.

The Illinois Hospital Association immediately warned that could mean “a devastating impact on the well-being of hundreds of thousands of Illinoisans and the financial stability of many hospitals.”

Other cuts described by Quinn include ending two programs that help the elderly pay for medicine, not hiring any new state troopers and reducing support for school transportation costs.

“While we have taken strong action to stabilize our budget, we are still in a tough fiscal situation. As a result, the spending reductions I am presenting today are very tough,” Quinn said.

Groups serving the needy said some cuts go beyond merely tough.

The Illinois Alcoholism and Drug Dependence Association called it a “doomsday budget” that would end treatment for nearly 19,000 people.

Voices for Illinois Children said the budget appears to sharply cut teen mental health services, after-school programs and child-care services.

“When the school bell rings, kids still have needs,” said the group’s policy director, Sean Noble.

The administration denied the cut in transportation payments would encourage schools to raise property taxes. Instead, schools can tighten their belts, Lavin said, while acknowledging the state is far behind in paying what it owes schools.

Quinn has presented this budget as a difficult but necessary step toward ending the budget crisis that had crippled state government. First, Quinn and Democratic legislators temporarily raised income taxes by two-thirds, to a personal rate of 5 percent. Now he wants to borrow money to pay off overdue bills. Instead of informally borrowing money simply by not paying its bills, the state would officially borrow and pay the debt over 14 years.

Quinn maintains this step, which technically would take place in the current budget year, would be fair to the state’s vendors and good for the economy.

Republicans say Illinois needs more spending cuts, not more debt.

Quinn budget director David Vaught said that if the borrowing plan is not approved, Illinois will face a deficit of $9 billion to $10 billion in the budget year that starts July 1.

Quinn’s budget would increase spending from the state’s main account to roughly $35.4 billion. Vaught said Tuesday night that he did not know what total spending would be once federal money, special-purpose funds and construction funds were included.

(TM and © Copyright 2010 CBS Radio Inc. and its relevant subsidiaries. CBS Radio and EYE Logo TM and Copyright 2010 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.)

  • Nice pic

    Picture is of an idiot in action!!!! The look on his face just screams “DUH”

    • Neal thompson

      You cannot continue to pay pensions, many of which were overinflated by increasing salaries the last year etc. A 10% cut to all those receiving pensions would help relieve the debt. These retired people need to help a little coming off easy street and see how tough it is on my street.

      • john kesrouan

        State or municipal employees who receive pensions have no idea how much more they get in comparison to Social Security recipients. For the same wage rate social security recipients receive 1/2 to 2/3rds less than they receive. I’ve done tax returns for both and I see the wide disparity all the time. FDR’s great Ponzi scheme swipes 12.4% of each private employee’s payroll and it’s a guarantee that since the media calls it a “entitlement” it will be cut probably by 30%, it’s at least fair to say it’s not unreasonable to cut government employee pensions by at least that much.

      • Average Guy

        Raising corporate taxes would also. States should stop giving tax breaks too business in return for jobs these businesses would add any way.



    • KE

      Daves you do not know how good we have it — Quin might not look like much but the man is FRUGAL — he knows how to stretch a buck better than any politicina that I have ever seen — and he is much smarter than he looks because he chooses his people more carefully — Unfortunately he inherited alot of free spending liberals and a State that was ssso bad off financially.
      And as everyone knows, you can pout 20,00 0on a credit card and end up paying $250,000 over 30 years before you ate finished paying off with only minimum payments.

      I think Quinn needs to cut spending more heavily — big time — but it is all the liberal backed social groups that are killing this State and noone wants to be seen as the big bad wolf

  • Leader

    I have an idea, why not take a percentage of the unwon state lottery each week and put it into the state tresuary. It could be a win-win for the state, each week there would be a bank roll and if the lottery is won, the state still collects taxes.

    • KE

      @Leader — you are the first person who is coming up with enlightened ideas!!!

    • dccat

      The lottery was originally supposed to help the schools and that hasn’t happened yet…..don’t think your plan will pan out either.

  • Vincent Bennett

    Why do you need to borrow BILLIONS Mr. Quinn? Your already robbing us with the almost 100% state income tax increase. Your a crook an a liar, you may have gotten my vote when you promised not to raise taxes this time but next time you won’t be as fortunate


    Quinn makes the felons ryan and blago look smart….Quinn is a moron, e should go back to hanging around the mens restroom or in the parks, a’la Sen. Craig?!……

    RE-CALL QUINN 2011…….Lair, thief ,corruption ….same day different corrupt hack!

    • KE

      And just who would you put in there?

  • Revalan

    Picture reminds me of Blazing Saddles Mel Brooks with black coat
    that said GOV on back same MO

  • top designer

    what does the sob have against seniors. First he cuts free transit reides now he wants to eliminate prescription help for seniors that really need this help?My hope is that he does not become a senior.

  • bilked

    I wish Illinois had recall amendment. This guy broke his campaign promise and presented us with a 67% tax increase in the midst of a recession… Econ 101 says never do that. The reason they don’t need my extra tax money is because the state and governonr still refuse to quit borrowing and run up the debt, and because there is not any evidence that corruption is rooted out. Illinois is among the worst in terms of corruption, and you cannot blame the citizens for being extremely wary of giving more money to these crooks. I thought Bradley was too far right extreme for the state, and believe me, I am no fan of Quinn at all, but what were our choices? I would rather have Bradley in office, with no tax increase and then let the legislature strike down his extreme agenda. We would be better off. This tax increase hurts, it really does.

  • washington

    Has there ever been a more unqualified person in government? This guy is a “populist”?

  • KE

    Trust me,
    if it was singularly up to Quinn, he would cut spending drastically in order to pay off all the outstanding debt — but welcome to Chicago – home of the unions, liberal , free just about everything for people — except middle class European White, Chinese , Japenese, Korean (the true groups that have been discriminated against for the last 50 years) .

    • john kesrouan

      I doubt it. The Unions and Liberals are the folks who vote for him. It’s like he would be cutting his nose in spite of his face or at least that what he thinks, That’s why he’s making a fake show of cutting spending with this ludicrous 100 million cut.

  • Katie

    I did not vote for Gov Quinn. See someone did, they did not listen before the campaign. He said he wanted to raise taxes, borrow money to pay the over dues bills, and cut important programs that the people need in Illinois. Brady was your man. Now who ever voted for him, is making us all suffer. We are all living check to check, and some not even that. Gov Quinn will do what he wants, and never do what the people in Illinois need and deserve. We are going to loose more jobs, and things will be worse for a long time before they even start looking forward for us the people. I am broke, and many of our friends and family are too. Stop spending our money. We have to live within our means, Illinois should too.

  • The Facts

    Quinn needs a “dunce” cap to go with that sash. These IL politicians need to wise up and take notes from walker (Wis.) & Christie (NJ)!!!! Make serious cuts, NO borrowing and tell these public sector unions to go take a flying leap!!!! Again, I want to thank all the idiots in IL who voted this fool into office!

    • Average Guy

      No, Walker has proven to be a liar and Christie is the same. These Governors are taking money from companies to kill unions.

      • @average guy

        I have read enough of your posts to know that you are an f-ing idiot. Wait for the next story on some poor black criminal and cry racism, until then post some proof of your more then silly allegations. BTW- I’m sure you’re all for the crooked unions being in bed with the dems!!

      • Average Guy

        @ @Average Guy:

        Stop watching FOX news and turn too more responsible news. Don’t worry I’m not a name caller.

  • Jim

    I am not impressed at all. I NEED to see fat pensions paying a state income tax first and forthmost. I pray the Republicans hold their ground and control this idiot.

  • john kesrouan

    100 million cut on a 13 Billion dollar budget deficit???. Gubernor, math 101 tell anyone who can add or subtract it ain’t nearly enough. Here’s a suggestion to get 3 to 5 times that amount. Park state investigators at state funded medicaid clinics in Northern Illinois and you’ll see how many cheese heads depend on Illinois taxpayers for their medical care, you know the ones using the clinics with Wisconsin license plate, duh. Then watch your IDOT worker out on pothole patrol and you’ll be amazed how many it takes to fill ONE. Next walk around your state offices and anyone with a I pod and hear piece is lolly gagging and not working. Get rid of those folks. My suggestions will save you 300-500 million if not more. Sent me a 10% check for the free consulting, but I won’t be holding my breath.

  • WhyNotTaxTheHellOutOfBusinesses

    Stop giving corporate tax breaks to businesses to come, or stay in Illinois. Where will they go, Wisconsin? Indiana? Businesses couldn’t do in those places what they can do in Illinois, at least in Chicago.

  • Jerry

    As usual Republicans have no solutions except to cut taxes and reduce spending. Why don’t they take cuts themselves?

  • http://friendsofdistrict23.org/?p=651 Govenor Pushes Consolidation of School Districts | Friends of District 23

    […] http://chicago.cbslocal.com/2011/02/16/quinn-to-present-budget-with-heavy-borrowing/ Previous postJournal Topics: Dist. 57 Speaks Out on Music […]

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