More Emergency Borrowing

Rep. Pritchard's Perspective on Illinois Politics

Observations and comments about state government by State Representative Robert W. Pritchard.
District Office 815-748-3494 or E-Mail to bob@pritchardstaterep.comNovember 30, 2009

November 30, 2009

I hope you found many reasons to celebrate this Thanksgiving and had an enjoyable time with family and friends. Though this is an anxious time for farmers trying to finish harvest and field work, the rain gave time for repairs, rest and family. Several friends had an empty chair around the dinner table but were comforted to talk about the contributions of loved ones no longer here.

One of the things I celebrated was a new grand-daughter born two weeks ago. Everyone is healthy and doing well but they live too far away in upstate New York. Guess when I go to Chicago for meetings I will just have to do what those airline pilots did a month ago and go beyond my scheduled destination.

These are difficult times for our state and nation with joblessness, increased hunger and financial challenges of all types. It warms my heart to see and hear how people are helping one another. Even in hardship we are finding ways to share—even if only a little—with someone worse off. This is the American spirit that started at the first Thanksgiving and gives hope that we will weather this storm.

Even though many are frustrated with the actions and inactions of politicians in Springfield and Washington, we can take comfort in the approaching elections. Our democracy is still strong and the people can elect leaders with commitment to solve the issues, to operate ethically and to represent their interests. Between now and the elections get to know the candidates; question their ideas and work for the best candidate.

Another Proposal to Sell State Assets

Our last governor proposed selling lots of different state assets from roads to office buildings to pay for his spending desires. When blocked by the legislature, he just kept spending. Therefore it’s not surprising that Governor Pat Quinn is having difficulty balancing the budget and has proposed selling yet another asset–the Thomson Correctional Center– located near the Quad cities.

As background, the Thomson Correctional Center comprises 146 acres with 15 buildings totaling 625,000 square feet constructed in 2001. The community welcomed the $140 million prison for the jobs and economic activity it promised even though it was a Level 1 adult maximum-security facility comprised of 1,600 cells and a separate 200-bed minimum security unit.

Our former governor never fully opened the facility even though the state needed the space and should retire other antiquated prisons. Many local developers and investors who built restaurants, homes, hotels and shops for the anticipated prison visitors, employees and operations have long ago gone bankrupt. The prison should be opened, utilized for Illinois prisoners and help what’s left of the devastated community.

The future of the prison should be determined by a deliberative process set out in Illinois law, not by the decision of the President or Congress. Illinois taxpayers invested in building the prison to house Illinois prisoners. There is a need for the space. Our law specifically states an asset cannot be sold if it is needed or before it has gone through a public hearing process.

Aside from the question about whether citizens want Guantanamo Bay prisoners brought to Illinois, why not lease—rather than sell– part of the asset to the federal government? The federal funds would help fully open the prison, create jobs and economic activity for the town, and answer the state’s needs to relocate some prisoners from unsafe and outdated prisons.

Let’s have a public discussion and creative solutions to this issue rather than rush to sell, as former Governor Blagojevich would say, a “bleeping” golden thing.

Updates to Sex Offender Notification System

The office of Attorney General Lisa Madigan is reporting that significant updates will soon be made to the Illinois Automated Victim Notification (AVN) System. A U.S. Department of Justice grant will fund a dedicated website that will provide real-time information and updates on all registered sex offenders in Illinois.

The pursuit of a grant and enhancement of the existing system was motivated by a bill passed by the General Assembly in 2008 that requires law enforcement to provide victims of sex offenses certain information relating to sex offenders. Victims and other registered users will receive notification relating to changes in the offender’s residence and employment, as well as whether the offender fails to re-register.

The enhanced Illinois AVN System will also include pro-active mapping capabilities that will enable persons to be notified if a sex offender moves into their neighborhood.

More Emergency Borrowing

As Illinois continues to struggle with paying its bills, the governor is considering yet another emergency borrowing plan. His proposal in October was to borrow $900 million with repayment in the next fiscal budget.

That deal was blocked by the Attorney General who argued that borrowing across fiscal years requires that a “failure of revenues” exist and it was too early to make such a declaration. Remember that Comptroller Hynes reported revenues were already $600 million below anticipated receipts by the end of the first quarter of the budget year.

Now Governor Quinn’s office is reportedly planning a $500 million loan in December to be paid back by the end of June. While this is a very short-term help for our state’s money woes, it piles on top of another $2.25 billion loan that also must be repaid by June 30.

With declining revenues, unpaid bills of an estimated $4.2 billion, and now perhaps a $2.75 billion note to repay, planning for the 2011 budget just moved closer to impossible. Immediate cuts and reforms are necessary but the governor doesn’t have the will to make them.

Not mentioned was how the state intends to pay for the $202 million in college monetary assistance grants due in February. As you remember, the legislature authorized payment of student grants for the second semester but gave no funding. I predicted then that colleges and universities were being forced to offer grants and that state reimbursement would not occur. The state is already behind in operating payments to colleges and universities which is creating yet another victim of the state’s current fiscal policies.

Recommendations Given for State Fiscal Policies

Three experts recently shared their ideas for changing the state’s fiscal direction with the House Bi-Partisan Task Force on Government Reform and Spending Accountability on which I serve. Their ideas focused on longer term solutions rather than ways to balance the annual budget.

Ron Snell, National Conference of State Legislatures, reported no state is successfully using “zero-based budgeting” in state government. This is a process where every function of government is reviewed to see if it is necessary next year. Rather, he suggested looking at performance based budgeting where goals, priorities and measures of results over several years are set. Illinois currently does a poor job of setting outcomes for a budget expenditure.

Sheila Weinberg from the Institute for Truth in Accounting advocated for modified accrual accounting rather than cash accounting in state government. Some agencies take up to two years to report expenses which makes it impossible for the legislature to budget accurately. Weinberg also challenged the governor to present a fact based budget so the public would better understand if the budget was balanced each year, the amount of unpaid bills and future pension and health care obligations.

Finally, Richard Dye from the University of Illinois Institute of Government and Public Affairs focused on the rate of growth in state spending and revenue. He discussed results of a computer model that concluded that the rate of spending growth must be cut to the rate of income growth. Even with more revenue from an income tax increase, the state will stay in a fiscal hole unless the rate of growth in spending and revenue are equal.

A recent study conducted by a team of University of Illinois economists shows that increasing the income tax and adding sales taxes on services along with budget cuts are the only ways for Illinois to avoid a budget crisis like California. The study concluded the state can’t cut enough out of Medicaid and pensions to pay its bills and debt.

As I speak about these issues around the district, a majority of citizens tell me they want to see some significant reforms and cuts in state spending before talking about an increase in taxes. A compromise solution must be developed soon if we are to prevent a destruction of our local human service, health care and educational providers.

Congratulations to NIU Faculty

Three of Northern Illinois University’s Accountancy faculty cornered the market on national awards for innovative teaching this year. Congratulations to Pam Smith, Rebecca Shortridge and Linda Matuszewski for their creativity in teaching of undergraduate or graduate students. It is unprecedented for the awards presented by the American Accounting Association and Federation of Schools of Accountancy to go to faculty at just one university. This is further proof that NIU has one of the top accountancy programs in the country!

Enjoy the holiday season.

Bob