July 9, 2010

On the heels of Governor Quinn’s budget outline for Fiscal Year 2011, Comptroller Dan Hynes released a final Fiscal Year 2010 report that verified “Illinois ended the year in the worst fiscal position in its history.”

At the end of the fiscal year, which concluded on June 30, the state’s General Revenue Fund (GRF) balance was negative $4.692 billion—the lowest budgetary balance in Illinois history.

The backlog of Illinois’ unpaid bills was a historically high $4.712 billion. Last year, the backlog was $2.785 billion.

Lacking revenue to pay the state’s bills, in June it was taking a record 153 working days for the comptroller’s office to reimburse vouchers. At the same time in 2009 the delay was 99 days.

Unfortunately, the report doesn’t predict any relief on the horizon. In fact, Hynes anticipates that even with an economic boost or with additional revenue that may come from budget cuts, borrowing measures, or tax increases advanced by Governor Quinn, “the state will likely end fiscal year 2011 with a GRF bill backlog significantly higher than that at the end of fiscal year 2010.”

The report also notes that the traditional August 31 deadline (known as the “lapse period”) for the state to pay all its Fiscal Year 2010 bills has been pushed back until December 31. According to Hynes, Illinois would not be able pay its obligations by the end of August. But getting all those bills paid by December will also be a challenge.

The report notes that, “even with the extension of the state’s lapse period…it will be extremely challenging to close out fiscal year 2010 and maintain key functions of state government.” And because a large portion of the Fiscal Year 2011 revenues must be used to pay the previous year’s bills, Hynes warns that payment delays next year are likely to be even longer than what we saw in 2010.

Many find it difficult to believe the state’s budget problems have actually gotten worse under Quinn than under Rod Blagojevich, but they are significantly worse—and continue to deteriorate every day.

July 7, 2010

Freedom of Information Act (FOIA) reports highlighting Governor’s Office raises topping 20 percent have the media—and the public—up-in-arms.

The Associated Press is reporting that Quinn has awarded salary increases averaging 11.4 percent to 35 staffers in the past 15 months; including a 20 percent, or $24,000, annual increase to the state budget director.

When interviewed by FOX Chicago News, Sen. Radogno noted that, “It’s very difficult to buy this rhetoric that, ‘We need to borrow, we need to have increased revenue,’ when these kind of poor management decisions are going on.”

Governor’s Office raises coincide with recent union pay increases, which were awarded to more than 40,000 workers last week. Since 2009 union employees have received a 7 percent increase, and are scheduled to receive another 7 percent by next July 1—at a cost of at least a half-billion dollars a year.

When asked what impact the salary increases would have on the budget, Radogno noted, “Obviously it’s going to mean we aren’t going to pay our Medicaid providers, other human service providers, the schools, the money that we owe them because it will be eaten up by these pay raises.”

Though the governor insisted he’d cut spending in the Governor’s Office by 25 percent, further analysis of the FOIA report showed that payroll for Quinn’s staff and his budget office had not decreased substantially. In fact, just less 2 percent had been cut. Additional records also showed that a number of employees under the governor’s purview are being paid through other agencies, meaning even the minimal savings that have been identified may have been overstated.

On July 1, Gov. Pat Quinn announced what he says will amount to approximately $1.4 billion in budget cuts, though Senator Radogno said that the actual cuts are really in the neighborhood of $155 million. In fact, at this time the Governor has only reduced spending by less than one half of one percent.

Though supportive of any plan to scale back state expenditures in the face of a $13 billion budget deficit, Radogno remains skeptical that Quinn has the resolve to make his proposed cuts.

In 2009, the Governor promised to cut $1 billion from the state budget, and even produced a list of cuts that he planned to make. Yet most of those budget reductions were never implemented, and in fact Quinn managed to overspend by $2 billion—and increase Illinois’ backlog of bills from $4 billion to $6 billion.

Though short on specifics, Quinn provided a list of his $155 million in vetoes by agency. He plans to cut spending in many areas of the budget including elementary and high school education, higher education, human services, aging, corrections, health, law enforcement, agriculture and natural resources.

During his mid-morning press conference, Quinn advocated for both a tax increase and additional borrowing as a way to dig Illinois out of its budget quagmire. Quinn also said that he introduced an Executive Order directing state agencies to make substantial spending cuts in areas including travel, transportation, leasing, etc.

Ironically, the same day Quinn announced his budget cuts—while touting his commitment to spending reform and reductions—union employees, who represent almost 90 percent of all state employees under the Governor’s control, received the first of four raises that they are to receive over the next year.

Read more: Quinn’s budget cuts more fiction than fact

June 18, 2010

Illinois’ credit rating took another hit this week, and several bills were signed into law, including measures that will overhaul the state’s archaic telecommunications act and put Illinois residents to work.

Senator Radogno said Senate Bill 107 (P.A. 96-0927) will modernize Illinois’ existing telecommunications law, which had been implemented before the prevalent use of cell phones. The law will continue to safeguard consumers by extending affordable package options to those who still use landline services, while also lifting unnecessary regulations, which will promote companies’ investment in wireless and broadband technology.

The measure also encourages market competition by allowing telephone companies to alter price and phone package details without approval from the Illinois Commerce Commission, which often took weeks.

Another measure, House Bill 6349 (P.A. 96-0929), puts Illinoisans to work when they need it most. The bill requires that at least 90 percent of workers hired for construction and hazardous waste clean-up on public works projects must be workers from Illinois, if the state unemployment rate is over 5 percent for two consecutive calendar months.

The measure seeks to create job opportunities for Illinoisans during tough economic times and instances of significant unemployment.

Also, Radogno said that Illinois’ credit rating was downgraded once again, based primarily on the state’s continuing budget deficit. Fitch Ratings recently downgraded Illinois, which now has the second-lowest rating in the nation after California. The downgrade comes on the heels of a Moody’s Investors Service downgrade, which tied Illinois with California for the worst-rated state in the nation.

Read more: Illinois receives second June credit downgrade