* This talk does exist, but keep in mind that Gov. Blagojevich has threaten to veto all tax hikes…
Democrats who control the Illinois Senate hinted Thursday that some kind of tax hike may be on the horizon.
With the state’s backlog of unpaid bills projected to hit the $5 billion mark by March, Senate leaders said the state must find new ways to pay for existing services.
‘’Maybe we need to look at alternative ways to raise revenue,'’ said state Sen. James Clayborne, a Belleville Democrat vying to become the next Senate president.
State Sen. Donne Trotter, D-Chicago, a top budget expert in the Senate, said lawmakers will likely have to find new sources of cash to pay bills
‘’We would hope so,'’ Trotter said.
* More on yesterday’s Hynes announcement…
Already, Hynes said, his office has had to expedite payments to two vendors who threatened to cut off services to the state unless they were paid. One provides food service to a state prison, and the other supplies gasoline to state police cars.
“These are not hypotheticals,” Hynes said. “We were able to avert those crises, but it is getting untenable. If the backlog grows by $1 billion, we will lose flexibility. Next time, we may not be able to do it.”
About $1.5 billion of the backlog is from health-care bills for the poor. The remaining $2.5 billion covers “the entire spectrum of state service providers, vendors and institutional payees” Hynes wrote in his letter.
If the situation isn’t corrected, the impact will spread, Hynes warned. Although state aid payments to schools have been made on time so far, other payments — like reimbursements to schools for transportation and special education costs — could be delayed in the future, he said.
Further payment delays could force some businesses to close their doors or cause more health-care providers to refuse service to patients dependent on state assistance, he said.
* The governor’s office agrees that more short-term borrowing is probably needed…
“We agree that short-term borrowing could be helpful to pay bills quickly during this time of year and manage the state’s uneven cash flow,” said Blagojevich spokeswoman Katherine Ridgway.
* But I’m not sure I fully understand Sen. Radogno’s point…
But Sen. Christine Radogno of Lemont, the lead budget negotiator for Senate Republicans, criticized the idea. Short-term borrowing would just make the state’s problem worse, she said.
By law, the short-term loans have to be paid back by the end of the fiscal year. If there is a cash-flow problem, then the loans won’t make the situation much worse. If we can’t pay when the loan comes up, then that’s essentially the same problem we have now.
* And we’re down to the nubbins…
The Senate Democrats’ top budget negotiator, Sen. Donne Trotter of Chicago, said borrowing money right now might not be a good idea because of interest costs. He said the state should tap into its “rainy day” fund first.
Hynes said money in the rainy day fund was used in July.
Oops.
* From the governor’s spokesman…
“The national economy is in turmoil, and we have to make sure that everyone works together . . . to make sure we can get through these financially troubling times.”
“Working together” and “Blagojevich” are not two things you would expect to happen. Words are fine. Actions are what is needed right now.
* Related…
* Gambling with health care
* Lawmakers raise vehicle registration fee $1 to buy new cop cars
* Illinois may raise cost of registering vehicles
* Daley budget includes rosier view of economy
* Drop $1,200 a month county board perk
* As economy worsens, more skip buying $75 city vehicle stickers
* CTA board approves fare raises
* CTA Riders Respond to Fare Hike
* Find an extra quarter for CTA next year
* U.S. transportation wish lists put forth
* Gaming board to pick three finalists today for 10th casino
* Illinois Gaming Board Will Pick Three Finalists For 10th Casino License