State’s Top Fiscal Officers and Two Legislative Leaders Are United on Protecting Taxpayers from Additional Money Grab
Office of Illinois Treasurer Dan Rutherford|Thursday, August 18, 2011
As the governor and others murmur about more borrowing to plug the gaping hole in Illinois’ operational budget, four state leaders are uniting in the effort to fight any attempt to borrow more money. State Comptroller Judy Baar Topinka, Treasurer Dan Rutherford, Senate Minority Leader Christine Radogno and House Minority Leader Tom Cross say it’s time Illinois paid its bills with the revenue it generates.
“Only in Illinois would government pass a 67 percent tax increase on people and businesses—in a fragile economy, nonetheless—and still talk about borrowing billions more to pay down bills,” Topinka said. “Our unified focus must be spending, and where we can save dollars - period.”
Over the years, the debt has been piling up in Illinois: The state’s bond and pension debt has risen from $54 billion in 2003 ($4,300 per citizen) to $119 billion today ($9,300 per citizen)—a 120 percent increase. This indebtedness has put Illinois in a shameful spot with the second largest bond and pension debt of any state. These figures don’t even include the billions of dollars in interest we are paying as a result of borrowing.
According to recent news reports, Quinn has been pushing for a “restructuring” of debt in order to pull the state out of its current fiscal crisis and claims it won’t affect the state’s ratings. As reported by WJBC radio, Quinn said, “I think if we do the restructuring, we will enhance our credibility with the rating agencies.”
“This is an unfortunate development,” said Rutherford. “The governor is throwing money down the drain by again relying on borrowing and not taking the best interest of taxpayers to heart. Restructuring will likely cost more because Illinois faces another downgrade in its credit rating.”
Borrowing additional money to “restructure” the state’s debt has become far too expensive. Illinois’ credit rating has sunk to 49th place by ratings companies Standard & Poor’s and Fitch, and the state is now dead last in the view of Moody’s.
“In the face of volatile financial markets and crushing debt, Illinois’ first step to fiscal health has to be closing the door on borrowing – once and for all,” Radogno said. “Despite a 67 percent income tax increase, Illinois still hangs on the edge of a financial cliff with Governor Quinn begging for more borrowing. Their so-called ‘temporary’ income tax increase will obviously become permanent. Governor Quinn has as much as admitted it in recent weeks. It’s insanity that has to stop. Illinois must live with its means, stop borrowing and make responsible choices for our future.”
In addition to bond and pension debt, the state currently has more than 190,000 unpaid bills totaling nearly $4 billion dating back to April 19. Those bills represent overdue payments to businesses, schools, hospitals, not-for-profit and social service agencies in every corner of the state.
“Our state’s fiscal challenges would be staggering in a vibrant economy, and become all the more urgent given today’s economic realities,” Topinka said. “To put it simply: We have to stop spending more than we bring in, and reject any new attempts to borrow for operations. Illinois has not lived within its means for nearly a decade – and that needs to change.”
Many efforts to implement more reforms and deeper budget cuts have been ignored or blocked by the majority party in Springfield. Many reforms have been introduced and held up including additional Medicaid and pension reforms which could save the state billions of dollars.
“We simply cannot afford to wait any longer to address our pension problems that are putting an enormous strain on our operating budget. We have put forward a proposal that gives current employees options in an effort to stabilize our pension systems going forward. We have been meeting with interested parties this summer and hope to vote on a final product as soon as possible,” said Cross. “We are staring at an $85 billion unfunded liability and every minute we delay on reform, we are putting ourselves in a worse and worse financial position.”
The four officials continue to offer to meet with Democrats at any time to find solutions.
