The Capitol Fax Blog » Question of the day

Friday, Nov 6, 2009

* The setup, from the Illinois Radio Network….

The Illinois comptroller says he hasn’t formed an opinion yet on the governor’s plan to borrow $900 million, because he hasn’t seen the details yet.

Comptroller Dan Hynes says the state does need the cash, because it has a stack of bills worth $3.5 billion that it lacks the money to pay. But he says the governor has not yet communicated with the comptroller’s office regarding specifics of the plan, such as when and how it would be repaid, and what the cost of borrowing would be, so Hynes says he cannot have an opinion or sign off on it.

The comptroller and treasurer must sign off on this type of borrowing; approval from the General Assembly is not needed.

* The Question: Keeping in mind that the borrowed money has to be paid back by the end of the fiscal year, do you think Hynes ought to sign off on this proposal? Explain.

- posted by Rich Miller

39 Comments

- anon - Friday, Nov 6, 09 @ 11:05 am:
I believe that he should. I ralize that this is like paying your bills with the credit card, but haven’t we all been there before? better times are ahead, and we can’t allow our prviders to go bankrupt because the state can’t afford to pay them. Asd long as the terms are reasonable, we should borrow the money and get people paid.

- Small Town Liberal - Friday, Nov 6, 09 @ 11:10 am:
I hate the idea of borrowing to pay off debt, but is there a real alternative at this point besides not paying the bills? I’d say Hynes should sign off on it unless he has a brilliant alternative plan that actually gets the bills paid now.

- Gathersno - Friday, Nov 6, 09 @ 11:20 am:
Absolutely he should OK it. If providers don’t get reimbursed more quickly, our service system will begin to collapse.

- state_guy - Friday, Nov 6, 09 @ 11:21 am:
No, absolutely not! The State is in the financial mess it’s in because of short and long term borrowing and a lack of revenue to pay vendors and creditors. If we don’t have the money or revenue to pay these bills now how is borrowing more money that has to be repaid by the end of the fiscal year a good idea? We still won’t have enough revenue to pay that debt back and then we are at the same place we are now 6 months from now. Even if new revenue is generated we still won’t have the money to pay back our debt… stop borrowing and start working on long term solutions that are sustainable!

- how about this - Friday, Nov 6, 09 @ 11:33 am:
He should ok the borrowing (every business needs cash flow to operate) then suggest having the Govenror cut Medicaid eligibility, which every governor has had to do in Illinois everytime we have gone into a recession. Some straight talk from someone who is a first hand witness to this unaffordable ramp-up in the state’s Medicaid program would be appreciated.

- VanillaMan - Friday, Nov 6, 09 @ 11:41 am:
Hynes should drag his feet until the very last moment, then do a dramatic scene where he throws his right arm over his eyes with a feather quill pen in his right hand, and cry out, “ALAS! How cruel and horrific our Governor Quinn is! How he binds me to face the lashes of our state’s misfortune! Has he no mercy for my fellow taxpayers? While I curse this day when I am forced by cruel circumstances to put my quill to paper, my heart pines for that better day when my goodly guberatorial guidance will steer this mighty Prairie State towards that Eden’s fairer fiscal dawn!”

- or something like that.

- LouisXIV - Friday, Nov 6, 09 @ 11:42 am:
Why is the state borrowing $900 million with $3.5 billion in outstanding debts? Is the governor going to say which bills get paid (since less than one in three would be)? If not, the Hynes should not ok the borrowing until he (and we) know how the money will be spent.

- Will County Woman - Friday, Nov 6, 09 @ 11:47 am:
Reading this is very unsettling and I hate to be heavy here. Quinn hasn’t even presented Hynes with a plan yet? How is this not an obvious top priorty for Quinn? Quinn is seriously out of touch and is in way over his head. He really is just making things up as he goes and it’s clear he doesn’t have a plan. Hasn’t Quinn exhausted every benefit of the doubt by this point as governor?

okay…getting to the question….

Hynes has made it clear time and time again that to him (Hynes) paying the state’s backlogged bills is of extreme importance. I agree with him. As I undertood it, the money Quinn hopes to borrow would in part pay backlogged bills. So, that being the case, yes Hynes should sign off on the proposal.

On the other hand, I understand from some of the things that I have read about him, that Dan Hynes is the type of person who personally does not carry credit card balances, because he diligently pays his balances off in full each month as they are due. If he were to argue that none of this fiscal crisis was his doing and he warned people going back several years that Illinois was headed for BIG trouble, and that now the chickens have come home to roost so let them. I wouldn’t blame him one bit. I understand, as I am sure he does, that a lot of people would be hurt. But, is it fair to him, to abandon and/or compromise his own principles with repsect to fiscal discipline? He sounded the alarm ages ago, and nobody listened. He did what supposed to do and when he supposed to do it.

Now, we have an ex-LT. governor who didn’t know jack about the state’s financial situation coming into the governor’s office trying to pull rank everyday over the “lowly” state comptroller. So, now he needs that “lowly” state comptroller’s help in addressing state fiscal matter.

And in signing off on quinn’s proposal, Hynes, through no fault of his own, will have to wear some of stink surrounding the state’s fiscal crisis, which Quinn has only made worse.

So my answer to Rich’s question is:
yes & no.

- hmmm - Friday, Nov 6, 09 @ 11:49 am:
“cut Medicaid eligibility, which every governor has had to do in Illinois everytime we have gone into a recession”

Absolutely untrue.

- cassandra - Friday, Nov 6, 09 @ 11:50 am:
The guv isn’t going to go near cutting Medicaid eligibility in the runup to a primary election.
In fact, he was quoted recently as saying he wasn’t going to make any “draconian” cuts at all in the near future.

Doesn’t the state always do some short term borrowing around this time of year. If it’s not that different from other years, then Hynes needs to explain this….Quinn won’t, he wants us to think the sky is falling, so he can impose his
beloved middle class tax cut. We shouldn’t fall for that or for the fiction that it’s a short term tax. The Dems want those billions rolling in for eternity.

Quinn will likely blame Hynes if he refuses and
if he signs off, Quinn will say that Hynes is effectively approving Quinn’s approach to the budget. So Hynes needs to accompany his signature with a very clear public statement on why he is signing and how he believes such borrowing could have been avoided.

- SIUPROF - Friday, Nov 6, 09 @ 11:54 am:
Yes he should. The state universities have yet to get any of the appropriated funds from the state and are in danger of not being able to make payroll for December 1 and Jan. 1. Tuition and fee dollars have been exhausted. Should thousands of university employees across the state not get paid, a very real crisis may begin.

- Joe in the Know - Friday, Nov 6, 09 @ 11:54 am:
Ask yourself this: Would you tell a loved one (sibling, wife, friend) to borrow money to get out of debt? This state is in dire, nay disasterous, financial straits. We need to stop the bleeding, come up with a plan that moves the state forward.

Dan Hynes should say no to the borrowing and stop the madness.

- hmoore3 - Friday, Nov 6, 09 @ 11:55 am:
Yes. We need the money and if the terms are relatively fair we don’t have a choice. Simple as that.

- Anon - Friday, Nov 6, 09 @ 12:01 pm:
It’s either borrow the money, or continue to force vendors to carry their interest-free loans to the state. Be honest and borrow the money.

- Secret Square - Friday, Nov 6, 09 @ 12:01 pm:
“He should ok the borrowing (every business needs cash flow to operate) then suggest having the Govenror cut Medicaid eligibility”

The problem with that is that ARRA (the federal stimulus) contains a maintenance of eligibility provision requiring states which accept ARRA funds for Medicaid to maintain the same eligibility standards they have now — they can’t try to make those funds go farther by throwing people off, or making it harder for new people to apply.

- Secret Square - Friday, Nov 6, 09 @ 12:06 pm:
Also, the huge Family Care expansion that Blago attempted to implement against the will of the legislators turned out not to be that huge. I believe fewer than 5,000 people signed up in the end (IIRC, Blago claimed up to 150,000 people would be eligible).

The Gov signed legislation in June that allows them to stay on the program, but no new people could sign up after June 30.

- Jimmy Joe - Friday, Nov 6, 09 @ 12:21 pm:
I think when Hynes finds out what bills it will pay, sign away. Or just pay bills using the FIFO methond. I don’t understand what Hynes not carrying a credit card balance has to do with anything. He’s a highly paid government employee married to a doctor, I don’t think he is any financial genius to not carry a credit card balance. But I believe that some of his creditors from his losing Senatorial run were never paid off because you can’t use funds from another campaign fund to pay off US Senate debt.

- Lee - Friday, Nov 6, 09 @ 12:22 pm:
Soounds like a plan to raise taxes. Since there is no way of paying when the loan comes due,unless the creditor extends the maturity, the alternative is raise taxes. Of course, The governor could make cuts now, not a good move politically, and show some real leadership.
The financial mess will get worse next year.
Lot’s of folks just digger their head in the sand and hoping against hope.

- Will County Woman - Friday, Nov 6, 09 @ 12:22 pm:
The fiscal fiasco and governor’s office reminds me of the old saying “be careful what you wish for because you just might get it.”

Clearly Quinn wanted and wants the gov’s office and all that it entails. he got it, and in the worst way too.

So, maybe Dan should just let him keep it. The governor’s office and trying to resolve the state’s fiscal crisis would likely only drive Dan to an early grave. he and his family are young and beautiful, and they don’t deserve that.

- Will County Woman - Friday, Nov 6, 09 @ 12:26 pm:
“I don’t understand what Hynes not carrying a credit card balance has to do with anything.”- Jimmy Joe

It MEANS he hates debt and doesn’t believe in deficit spending! From a public finances/budgeting standpoint that’s a good thing because he’s shown this consistency as a government official. Is this clearer for you now?

- Yellow Dog Democrat - Friday, Nov 6, 09 @ 12:45 pm:
Hynes has no choice. The alternative is massive shutdown of government services, starting with human services organizations and United Way agencies.

- A Citizen - Friday, Nov 6, 09 @ 12:49 pm:
Obviously the economic downturn has caused most of this crisis - if we set aside the overzealous proliferation of “new” programs and expansions. Had there been no meltdown of the economy the revenue stream should have continued to provide adequate funding. Borrowing more won’t get the problem under control, just forestall the day of reckoning. The economy will recover, however, not for at least two years or so. It is way past time to stop the piecemeal patches and put in place a temporary (Income Tax increase) increased revenue stream. An absolute sunset of two or three years and a moratorium on new or increased programs would be crucial. Do any of them have the statesmanship in their being to rise above the posturing and solve the problem ?

- Prowler - Friday, Nov 6, 09 @ 12:50 pm:
Absoutely not, what is going to get raided to pay back the loan in this fiscal year. Where will the money come from whan the note comes due?

- cassandra - Friday, Nov 6, 09 @ 12:50 pm:
I don’t think every “government service” and every United Way agency should be immune to cuts.

The notion that government agencies need every penny and social service agencies, once on the govt payroll, have no alternatives is absurd.

How about an alternative that includes cutbacks and “shared sacrifice.” We haven’t heard much about shared sacrifice lately. Or rich people sacrifice, or corporate sacrifice. Our accidental governor seems only able to contemplate middle class sacrifice…the more the better.

- Anonymous45 - Friday, Nov 6, 09 @ 1:16 pm:
Hynes has no choice but to borrow the money plain and simple…the State has to pay the bills…this a moment when the two Dem candidates for the State’s highest office should lose the politics and sit down for an honest discussion on options and fiscal realities…WCW: I’d love to read your posts if Hynes was Blago’s Lt. Governor…

- siriusly - Friday, Nov 6, 09 @ 1:27 pm:
Its a no win for Hynes. He probably will sign off, but if he doesn’t like YDD said he becomes the IL version of Newt Gingrich.

Hynes and Quinn agree that the GA (read: IL House) should vote to increase taxes - but not signing off on this borrowing won’t punish them.

- Inish - Friday, Nov 6, 09 @ 1:31 pm:
This is not a cash flow issue- this is EXACTLY what many small business owners are attempting to do now- we can’t service the debt- it leaves even LESS to work with general operating expenses going forward. You can NOT borrow your way out of debt- this process- as we are finding dilutes the available resources for current and future expenses. There are programs that need and should be cut- there are processes that need to be lean out and brought to the current generally accepted practice- like the fact we have a comptroller and a Treasurer for goodness sake.
I wouldn’t approve something without a plan- particularly when the pressure is coming fromt he guy who is running against you- it is at best a circular gunfight now.
We need a “buck tops here, one term hard knocks governor and GA to get our ship righted…” and when that dream comes true, Tinker Bell and I are retiring to the Bahamas. For now what I see is the clap your hands if you believe solutions from EVERY CANDIDATE… both sides. We need some pragmatic trimming.

- Will County Woman - Friday, Nov 6, 09 @ 2:01 pm:
We need a “buck tops here, one term hard knocks governor and GA to get our ship righted…”–inish

I totally agree.

hynes, if you are a hard knocks type, which i think you are, then by all means stay in the governor’s race. it has been mentioned from time to time on this blog that you may need to position yourself as a fiscal conservative to differentiate yourself more clearly. you’ve done that to some extent. i know its tricky for a primary, but you may have to get a little louder on the cutting waste etc. i think voters are aware that tough times call for tough measures as many, if not most, are experiencing their own fiscal pinches.

- Ghost - Friday, Nov 6, 09 @ 2:19 pm:
If we have to pay back more money during the current fiscal year then we are borowing, then I say it is a bad idea; we are just adding to our debt load.

If we owe those vendors who are not paid interest, and thwe interest we owe is greater then what we would pay by borrowing; then borrowing improves our finacial picture then I support it.

- RJW - Friday, Nov 6, 09 @ 2:36 pm:
Guys and Gals - the state has already borrowed, it is just borrowing from the providers. Short-term borrowing is not new (unfortunately), especially over the last several years. Yes the budget situation needs to be fixed but short-term borrowing has nothing to do with that right now. Borrow the money - get something to the vendors now. Yes, the vendors will be back in the same spot later this fiscal year but they need cash now.

- 47th Ward - Friday, Nov 6, 09 @ 2:50 pm:
It’s only a lose-lose proposition if Hynes remains comptroller. I’ve thought about this before, but now is the time for Dan to step away from the office he holds in order to campaign full-time for governor.

If he signs this, he enables the state to continue to kick the can down the road. If he doesn’t sign it, real pain will result.

Dan needs a third option to get out of this trick bag, and this is also a way to jump start his campaign. Taking a leave lets him out of this pickle while using it for maximum public relations effect. This will give him a platform and a way to pivot that puts a spotlight on the craziness of the budget manuevers that have gotten us to this point.

Then he can travel the state and have a serious discussion of why his plan makes sense. He’s already given up the chance to remain in the comptroller’s office, why not go all-in for Governor? Let Quinn own this budget disaster and defend the borrow-spend idiocy for the next 125 days.

That’s what I’d do anyway.

- Judgment Day Is On The Way - Friday, Nov 6, 09 @ 2:56 pm:
The operative part of the statement is this:

“But he says the governor has not yet communicated with the comptroller’s office regarding specifics of the plan, such as when and how it would be repaid, and what the cost of borrowing would be, so Hynes says he cannot have an opinion or sign off on it.”

The Comptroller’s office has a number of legal responsibilities regarding the proposed borrowing, starting with, like, can we pay the borrowing off based upon the proposed terms. If we can’t even do that (meet the terms of the borrowing), then don’t borrow the money.

The answer is: Until the Comptroller’s office has the details, Hynes should not sign off.

- Just the basics - Friday, Nov 6, 09 @ 3:31 pm:
YES! The state has to pay certain Medicaid providers within a cetain time period to get the enhanced Medicaid match. I don’t think this borrowing will be for UI - other than if the Medicaid providers are paid with the borrowing - other revenues would be avialable for others.

- Jimmy Joe - Friday, Nov 6, 09 @ 3:44 pm:
WCW - I’m saying that his personal financial situation, two large salaries, have nothing to do with the horrible financial situation the state is in. But if he can eliminate all debt by being elected, I’m all for it.

- Will County Woman - Friday, Nov 6, 09 @ 4:03 pm:
Paying debt and having a large salary are not mutually exclusive is it? There are a lot of ex-rich professional atheletes out there because they lived/spent beyond their means and accured a lot of debt that did not pay.

Also, we’re talking about a family of 5 in the Hynes’ case, and likely a mortgage, taxes and car notes. I agree that combined Hynes and his wife have a nice income, but there are people out there with nice incomes who lack fiscal discipline. Hynes strikes me as the type who is very pennywise professionally and personally.

- Will County Woman - Friday, Nov 6, 09 @ 4:05 pm:
I meant pennywise/poundwise.

- Will County Woman - Friday, Nov 6, 09 @ 4:53 pm:
…WCW: I’d love to read your posts if Hynes was Blago’s Lt. Governor…

Ananymous45 it has nothing to do with that for me. If Quinn had remained consistent and done a good jobs as governor, I would have no criticisms. My comments are reflection of the job that he has done and the stances he has taken, not who is or in whose administration he served.

- steve schnorf - Friday, Nov 6, 09 @ 6:57 pm:
Will the borrowing be used to pay off old debt (generally good) or to incur new debt (MAP?). Important distinction, but one that causes Hynes a problem because everyone wants to pay the MAP grants, they just don’t want to fund them.

- Emily Booth - Saturday, Nov 7, 09 @ 9:46 am:
50% - 65% of the state’s Medicaid assistance program is federally funded (depending on the program) so drastic cuts (which aren’t possible with ARRA funds anyways as the poster above pointed out) is not realistic.

It’s not just the economic downturn that led to this, it’s fiscal irresponsibility from the governor and legislators for failure to pass a balanced budget, the reliance on the state sales tax and lottery to fund education (hello economic downturn), the failure of whoever is the ethics director/inspector general/budget chief (maybe these 3 responsibilities should be combined) to address whenever taxpayers are not served by the fiscal decisions of those in charge and this includes hiring.

Who’s the customer here? Springfield has lost sight of who they serve and it’s not the voters. It’s the taxpayers. It’s a culture of self-aggrandizement.

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