(Springfield, IL) — April 12, 2011. Illinois has emerged from the worst of a violent financial storm, but the sun isn’t shining yet.
A jump in revenue, some short-term borrowing and an income tax increase weren’t enough to keep the state’s backlog of bills from growing during the past year. The state owes vendors, social service providers and schools, among others, $19 million more than it did last March, according to a report from Illinois Comptroller Judy Baar Topinka.
Unpaid bills, some of which are from October 2010, totaled $4.5 billion at the end of March, according to the report. With such a large pile of IOUs, Topinka’s office said it has to prioritize who gets paid first. Short-term borrowing, debt payments and Medicaid payments are first in line.
Kent Redfield, a political studies professor at the University of Illinois at Springfield, said the state dug itself such a deep hole that it will take a while for it to find a way out.
“We’ve got a huge deficit problem. Part of it is unpaid bills and part of it’s that we’re spending more on programs than our revenues will support, and we also have costs going up,” Redfield said.
Topinka concluded her report by saying that without “significant” changes, the state finances will continue to stumble. There have been several major ideas to address the situation, but so far all have run into roadblocks.
Gov. Pat Quinn floated a plan earlier this year to borrow $8.75 billion to spread out the state’s $9 billion deficit, though it stalled in the Legislature for lack of support from either Republicans or Democrats.
State Senator John Sullivan (D-Rushville) said he asked Topinka recently what exactly the backlog stood at so he could formulate some way to pay down the bills.
“Instead of doing a borrowing bill like the governor came out with of $8.75 (billion) maybe we could cut that in half. Maybe we would only have to borrow four or five billion dollars to pay those vendors and those schools that are owed money from months and months and months ago,” Sullivan said.
He said the oldest debts should be paid first.
State Senator Matt Murphy (R-Palatine) said that any amount of borrowing is a non-starter for the GOP.
“We don’t view borrowing as part of the solution to this,” Murphy said, pointing to a plan by the Senate Republicans that outlined $6.7 billion in possible cuts. “It’s time to get responsible and knuckle down and actually bring spending down to levels the people of this state can actually afford.”
Redfield said any plan — borrowing , cutting, or some combination of the two — needs to address the fact that the income tax increase is set to expire in four years, which gives the state some breathing room but doesn’t fix the underlying problem.
“We either have to reduce the amount of things we say are essential, or we have got to have more revenue and that’s a policy argument,” he said.
Andrew Thomason, Illinois Statehouse News
Gov. Pat Quinn
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