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Arc and Unpaid Bills Left to Linger

The Arc of Illinois

January 12, 2011

Leaders in The Arc:

Here is some more on payments delays and the 2% spending caps from Statehouse

News.

Our work on payment delays is not over.

Tony auski

The Arc of Illinois

815-464-1832

Illinois Okays Spending Caps, Unpaid Bills Left to Linger

By Yount Illinois Statehouse News

SPRINGFIELD With billions of new dollars expected to come into state

government, Illinois lawmakers are trying to give taxpayers some assurance that

a 66 percent income tax hike will be enough.

But there are serious questions as to whether it will be.

The General Assembly expects to raise more than $6 billion from the 66 percent

increase in the flat rate income tax, from 3 percent to 5 percent. Lawmakers

expect close to $1 billion more from an increase in the corporate income tax

that will boost that rate from 4.8 percent to 7 percent.

But lawmakers failed to approve other plans that would have generated billions

more.

The Illinois House could not agree on a borrowing package that would have raised

more than $8 billion to pay down the state's monstrous back log of bills. The

House also turned down legislation that would have raised $377 million a year

for public schools.

That leaves Illinois with a little more than $7 billion to pay $6.2 billion in

past due bills and cover the gap in state government money. That task could be

made more difficult by a spending cap in the tax increase legislation.

Under the spending restrictions, Illinois government would be limited to

2-percent growth during the next four years. State spending would be capped at

$36.8 billion for the next budget, $37.5 billion in 2013, $38.3 billion in 2014

and $39 billion in 2015.

Senate President Cullerton, D-Chicago, said if lawmakers or the governor

spend more than that the income tax increase automatically ends.

" This is really real, " said Cullerton.

But Republicans are quick to say that the 2-percent spending caps come after a

10-percent increase in state spending. Gov. Pat Quinn's budget office says state

spending in the current budget is $33.5 billion.

GOP leaders also point out that the 2-percent cap builds upon itself. Even with

the spending cap Illinois government will grow nearly 17 percent in four years,

they said.

Quinn budget director, Vaught, said the administration needs some room for

the spending caps. He expects Illinois to have to pay its multi-billion dollar

pension payments and cover the rising cost of Medicaid in the future.

" Just those two forms of increased spending, that are very difficult to control,

will eat up this spending cap change. Everything else will have to be flat or

decline, " [1] Vaught said.

The spending caps, however, do not apply to education, human services and

property tax relief. Quinn also has power to shift money from pensions or other

areas if he believes he needs the money.

Senate GOP Leader Radogno R-Lemont said that's not controlling state

spending.

" All during [last year's campaign] when we talked about cutting spending, all it

was was not paying bills. I appreciate the fact that you're finally admitting

that's was a big lie, [2] " Radogno said.

Vaught defends the spending restrictions as a nod toward reform.

" It's really a huge change in the way we're doing business in the state, " he

said. " And it's enforceable. " [3]

But legislative critics say plans to spend billions after hitting up taxpayers

for more money is just more of the same.

State Rep. Eddy, R-ville, attacked a plan from the governor's office

to spend $113 million on new projects even as the Quinn administration cries

poor.

" We don't have enough money to pay for [these projects]. To add $113 million

without accounting for every single one of those additional [projects] in some

manner, I think is part of the problem that we've had for eight years, " [4] Eddy

said.

Not every Democrat in Springfield voted for the income tax hike, or is on board

with Quinn's strategy.

State Rep. Jack s, D-Woodstock, said Illinois' unpaid bills are going to

linger, and the state's fiscal health isn't going to improve much.

" Gov. Quinn got what he wanted, " said s " Now he's going to have to make it

work. "

Lawmakers rushed to pass the tax increase in the 11th hour. A new General

Assembly will be sworn-in Wednesday at noon.

--------------------------------------------------------------------------------

Article printed from Illinois Statehouse News:

http://illinois.statehousenewsonline.com

URL to article:

http://illinois.statehousenewsonline.com/4901/illinois-okays-spending-caps-unpai\

d-bills-left-to-linger/

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