Few signs of movement on paying Ill. overdue bills

AP News
Posted: Oct 21, 2011 3:25 PM
Few signs of movement on paying Ill. overdue bills

Don't look for quick action to reduce Illinois' huge backlog of unpaid bills, despite universal agreement among state leaders that the debt is unfair to businesses, charities and local governments that provide valuable services.

Progress is blocked by fundamental disagreements on how to solve the problem and a lack of any sense of urgency among officials. Even with the Legislature's fall session beginning next week, officials report little or no discussion of what can be done to pay the bills, which total billions of dollars.

Gov. Pat Quinn did not list the issue among his top three priorities for the session _ ending legislative scholarships, passing a revised gambling expansion and sustaining his veto of a "smart grid" energy system. The Senate's top Republican doesn't expect progress any time soon. The speaker of the House and president of the Senate say they're waiting for signs of cooperation from Republicans.

Sen. John Sullivan, a proponent of borrowing money to pay the backlog, said he won't bother calling for a vote on his plan. "I see no reason to bring it up just to fail," said the Rushville Democrat.

While acknowledging the long odds, advocates for human service groups still plan to push for action, hopefully this fall but perhaps in January. They're trying to build support for several options: borrowing, taking money out of special-purpose funds or simply devoting any extra income to the backlog.

"It's a moral, ethical obligation," said Judith Gethner, director of Illinois Partners for Human Service.

Officials are split, largely along party lines, into two camps on how to address the backlog.

Many Democrats want to borrow by selling bonds and using the money to pay overdue bills. They maintain this would not be new debt. State government already owes vendors who can ill-afford to go without their money, they say, so it would simply be a matter of changing things so the state owes money to a different, more willing group _ bond-buyers.

"Debt restructuring is the very best way to have Illinois pay its bills immediately," Quinn, a Democrat, said in an interview with The Associated Press.

"Mainly the reason it hasn't passed is politics. It isn't policy," he said.

Not true, say those in the other camp. They say it's bad management to pay for everyday government expenses by borrowing money over many years. They want to reduce the backlog gradually with money saved by cutting spending and with higher revenues that come in as the economy improves.

Senate Minority Leader Christine Radogno, R-Lemont, criticized Quinn for not doing more to overhaul government spending for the long run.

"There is no plan here to dig out other than borrowing, and that is the wrong answer," Radogno said.

Any borrowing plan would require a super-majority for approval, meaning Democrats need at least a few Republican supporters.

One of the few people with a foot in each camp is Treasurer Dan Rutherford, a Republican.

In May, Rutherford sharply condemned the idea of taking on more debt and threatened to lobby credit-rating agencies to reject the borrowing if Illinois were to go that direction. But last month he told the Illinois State Chamber of Commerce that not paying bills is "criminal" and it might be feasible to borrow money to pay them.

"For those of you that are owed money from the state of Illinois, I support the idea of looking at refinancing some kind of a package to take the burden of the debt load off of you and put it on the state," Rutherford said.

Republicans want to see major changes in government pensions and Medicaid. They predict the changes would save huge amounts of money, but they also acknowledge it would be a long process.

In his spring budget address, Quinn proposed borrowing $8.7 billion over 14 years. Lawmakers essentially ignored the idea. In May, Sullivan proposed borrowing $6.2 billion for about half that amount of time. It failed 19-23.

Key figures report almost no discussion of alternatives or compromises since then.

Republican legislative leaders say the governor's staff recently approached them about possibly supporting a $4 billion borrowing plan, but they rejected it.

Sullivan said he has had no contact with the governor, or with the treasurer, and doesn't know of anything likely to change the status quo in Springfield.

Spokesmen for Senate President John Cullerton and House Speaker Michael Madigan, both Chicago Democrats, said they haven't pursued the issue because there's no sign Republicans are willing to cooperate.

The size of the backlog varies. As of Sept. 8, it was just over $5 billion. Nearly half of that was more than a month old, and $1.4 billion was more than two months old.

State government owed the money to businesses that provided food for prisons and gasoline for vehicles, to nonprofits that care for the disabled and protect abused women, to local governments that educate students and feed hungry children.

Illinois raised income taxes dramatically this year. The money, along with budget cuts, was enough to bring revenue and spending into balance but not pay off the old bills

So far, money is flowing into the treasury faster than anticipated in the state budget. But a weak economy means revenues could still dry up, warns the Legislature's Commission on Government Forecasting and Accountability.

For now, what to do with the additional money is likely to be a major question for lawmakers meeting this month and next. Should Quinn's plan to close facilities and cut jobs be blocked? Should canceled government raises be restored? Should overdue bills be paid off?

Gethner, of Illinois Partners for Human Services, is lobbying for bills to be top priority. It won't be easy, she said, but it's still possible.

"I'm certainly not 100 percent in the pessimistic camp," Gethner said.


To explore a searchable database of the Illinois government's unpaid bills from Sept. 8, go to http://billpay.qconline.com


Christopher Wills can be reached at http//:twitter.com/ChrisBWills