By Jamey Dunn
If lawmakers fail to act on budget solutions, the state could face $7 billion to $10 billion in unpaid bills by the end of the current fiscal year, according to a quarterly fiscal report issued today by Comptroller Dan Hynes.
At the midpoint of this fiscal year, the backlog of unpaid bills is higher than it was at this time last year.
The total is greater in part because the General Assembly and Gov. Pat Quinn have not yet put a plan in place for making this fiscal year’s payment into the public employee pension system. More than $6 billion in bills from fiscal year 2011 have yet to be paid, including $1.8 billion unpaid pension obligations. The oldest bill dates back to the middle of last July, the first month of the current fiscal year.
The state did manage to pay off all its late bills from fiscal year 2010 by the end of last calendar year with some one-time cash infusions. The sale of bonds against some of state’s portion of a national tobacco settlement brought in $1.25 billion. A tax amnesty program raised $392 million, and $354 million came from inter-fund borrowing. “While the almost $2 billion in revenues helped reduce the overall backlog of unpaid bills, the state’s fiscal condition has not improved,” Hynes said in his report.
Paying off the $1.3 billion in short-term borrowing — made last July — by next June will result in more than $4 billion in fiscal year 2011 funds going toward fiscal year 2010 obligations.
On the revenue side, the personal income tax brought in $129 million more during the last six months, an increase of 3.4 percent. The corporate tax generated $235 million in growth over six months, an increase of 45.8 percent. Much of the growth came from delinquent tax payments paid during the tax amnesty period. Sales tax revenues went up 3.5 percent, not counting the portion paid under the amnesty, indicating some economic recovery.
Since legislators are considering several pieces of budget-related legislation while also mulling a possible tax increase package, Hynes’ future projections are not specific. The reports notes that a borrowing plan to make pension payments would prevent the need to take the money out of this fiscal year’s general revenues. Hynes cautions that borrowing would also limit future budget flexibility. According to Senate President John Cullerton, a tax package would also likely include borrowing almost $4 billion for the pension payment and more than twice that amount to pay down the unpaid bills for this fiscal year.
“Any use of bonds to deal with the state’s fiscal condition will continue to impact the state’s cash management practices in the future, as the state must adjust to those higher debt service obligations,” Hynes said.
However, Hynes warned that if legislators do not move some combination of new revenues, bonding and “budget restructuring,” the situation will only decline. Illinois received $600 million in federal funds for education in FY2010, which will not be coming again this year. The feds are also ramping down an elevated Medicaid match that was part of the stimulus package.
“Absent any significant budgetary developments, such as the initiatives currently under discussion in the General Assembly, the outlook for the state’s fiscal condition does not look to show any improvement and in fact is expected to weaken further,” Hynes said.
He added if that happens, legislators likely would have to extend the lapse period when the state is allowed to pay obligations from the previous fiscal year out of funds from the current year.
Showing posts with label Dan Hynes. Show all posts
Showing posts with label Dan Hynes. Show all posts
Friday, January 07, 2011
Monday, October 04, 2010
Budget deficit could reach $15 billion
By Jamey Dunn
Illinois could be facing an even larger stack of unpaid bills next fiscal year, as well as a $15 billion deficit, according to the quarterly report on the state’s finances by Comptroller Dan Hynes.
The state rolled an unprecedented $6.4 billion in unpaid bills over from fiscal year 2010 to the new fiscal year, which started in July. Legislators extended the cut off for paying those bills from August to December, and Gov. Pat Quinn has vowed to have the backlog paid down by the new deadline.
According to Hynes, 23 percent of FY 2011 revenues will be needed to pay off obligations from last year. A short-term loan the state took out in July for $1.3 billion, which will come due next spring, already went toward payments to vendors and service providers.
Hynes said in order for Illinois to pay down the backlog by December, the estimated $1.2 billion would have to come in from the plan to sell bonds against money the state received in a tobacco settlement. The state would have to shift $1 billion from other funds into the general revenue fund, and the tax amnesty plan would have to successfully bring in revenues. While the report does not specify how much the state has to bring in during the tax amnesty period — which started on October 1 and ends November 8 — Hynes says the plan is not likely to bring in the original estimate of $200 million.
However, Kelly Kraft, a spokesperson for Quinn’s Office of Management and Budget, said an analysis by the legislature estimated the amnesty would bring in $250 million. She said in a written statement that it is too soon to predict the exact number, but added: “The hundreds of millions of dollars in expected revenue will be significant to help the state pay its bills and keep people employed.”
Hynes estimates that $8 billion in overdue payments could carry over from the current fiscal year to FY 2012 because so much of this year’s money will be needed to pay down last year’s bills. A total of $3.5 billion in unpaid bills from this fiscal year have already piled up. From the report: “Absent any other changes, payment delays will be extended from the historic levels seen recently. This will lead to more providers facing financial hardship and further threaten both the level and quality of services provided to Illinois citizens.”
While income tax revenues saw a small increase, sales taxes where down. According to the report, Illinois cannot count on an economic rebound to bail out the budget in the near future.
Hynes’ report says all this bleak budget news — along with the loss of federal stimulus money and the state’s low credit rating leading to larger interest payments on borrowing — could culminate in deficit of at least $15 billion by the time lawmakers are hammering out a new budget early next year. If that happens, the state’s debt would represent more than half of the money currently in the general revenue fund.
Illinois could be facing an even larger stack of unpaid bills next fiscal year, as well as a $15 billion deficit, according to the quarterly report on the state’s finances by Comptroller Dan Hynes.
The state rolled an unprecedented $6.4 billion in unpaid bills over from fiscal year 2010 to the new fiscal year, which started in July. Legislators extended the cut off for paying those bills from August to December, and Gov. Pat Quinn has vowed to have the backlog paid down by the new deadline.
According to Hynes, 23 percent of FY 2011 revenues will be needed to pay off obligations from last year. A short-term loan the state took out in July for $1.3 billion, which will come due next spring, already went toward payments to vendors and service providers.
Hynes said in order for Illinois to pay down the backlog by December, the estimated $1.2 billion would have to come in from the plan to sell bonds against money the state received in a tobacco settlement. The state would have to shift $1 billion from other funds into the general revenue fund, and the tax amnesty plan would have to successfully bring in revenues. While the report does not specify how much the state has to bring in during the tax amnesty period — which started on October 1 and ends November 8 — Hynes says the plan is not likely to bring in the original estimate of $200 million.
However, Kelly Kraft, a spokesperson for Quinn’s Office of Management and Budget, said an analysis by the legislature estimated the amnesty would bring in $250 million. She said in a written statement that it is too soon to predict the exact number, but added: “The hundreds of millions of dollars in expected revenue will be significant to help the state pay its bills and keep people employed.”
Hynes estimates that $8 billion in overdue payments could carry over from the current fiscal year to FY 2012 because so much of this year’s money will be needed to pay down last year’s bills. A total of $3.5 billion in unpaid bills from this fiscal year have already piled up. From the report: “Absent any other changes, payment delays will be extended from the historic levels seen recently. This will lead to more providers facing financial hardship and further threaten both the level and quality of services provided to Illinois citizens.”
While income tax revenues saw a small increase, sales taxes where down. According to the report, Illinois cannot count on an economic rebound to bail out the budget in the near future.
Hynes’ report says all this bleak budget news — along with the loss of federal stimulus money and the state’s low credit rating leading to larger interest payments on borrowing — could culminate in deficit of at least $15 billion by the time lawmakers are hammering out a new budget early next year. If that happens, the state’s debt would represent more than half of the money currently in the general revenue fund.
Wednesday, July 07, 2010
Hynes report paints dire fiscal picture
By Jamey Dunn
At the close of the 2010 fiscal year, Illinois is running a record tab of unpaid bills and making payments more slowly than ever before.
According to Comptroller Dan Hynes’ quarterly report on state finances, Illinois rolled over $4.7 billion in unpaid bills into the new fiscal year. Not all the bills have come in, and the comptroller estimates that number could reach $6 billion by the August 31 deadline for submitting payment requests. The number of unpaid bills at this time last year was almost $2.8 billion.
The state takes on average 153 workdays to fulfill a payment request, up from 99 days last year. The General Assembly passed and Gov. Pat Quinn approved a measure that gives Illinois until December 31 instead of the usual August deadline to pay its bills from last fiscal year. Hynes estimates that after those debts are paid, Illinois will face its biggest budget deficit to date. The current shortfall is $4.692 billion.
Part of that deficit is due to drops in revenue. Income tax revenues, both personal and corporate, were down $1.6 billion at the end of fiscal year 2010. Sales tax collections were down $465 million. Taxes from other sources, such as investment income, insurance and inheritance tax, were down $123 million.
Revenues from last fiscal year fell $1.3 billion short of projections. So, according to Quinn’s Office of Management and Budget, Quinn, Hynes and State Treasurer Alexi Giannoulias have agreed to move forward with $1.3 billion in borrowing to make up the gap. The cash is expected to come in near the end of July and will go to pay down the backlog of bills.
Hynes’ report says without this borrowing, Quinn’s newly approved power to shift money from special funds to the general revenue fund and the securitization of national tobacco settlement payments, which will produce $1.2 billion upfront, Illinois would have no hope of meeting the extended December deadline to pay off last fiscal year’s bills.
But the report said services and programs for this year will suffer as Illinois stretches to pay down its debt. “It will be extremely challenging to close out fiscal year 2010 and maintain key functions of state government. Other than payments for mandated debt service on state bonds, general state aid to education, federal stimulus related Medicaid and critical state operations, an extremely limited amount of fiscal year 2011’s obligations are likely to be addressed in calendar year 2010 while the state is still dealing with the prior fiscal year’s bills.”
At the close of the 2010 fiscal year, Illinois is running a record tab of unpaid bills and making payments more slowly than ever before.
According to Comptroller Dan Hynes’ quarterly report on state finances, Illinois rolled over $4.7 billion in unpaid bills into the new fiscal year. Not all the bills have come in, and the comptroller estimates that number could reach $6 billion by the August 31 deadline for submitting payment requests. The number of unpaid bills at this time last year was almost $2.8 billion.
The state takes on average 153 workdays to fulfill a payment request, up from 99 days last year. The General Assembly passed and Gov. Pat Quinn approved a measure that gives Illinois until December 31 instead of the usual August deadline to pay its bills from last fiscal year. Hynes estimates that after those debts are paid, Illinois will face its biggest budget deficit to date. The current shortfall is $4.692 billion.
Part of that deficit is due to drops in revenue. Income tax revenues, both personal and corporate, were down $1.6 billion at the end of fiscal year 2010. Sales tax collections were down $465 million. Taxes from other sources, such as investment income, insurance and inheritance tax, were down $123 million.
Revenues from last fiscal year fell $1.3 billion short of projections. So, according to Quinn’s Office of Management and Budget, Quinn, Hynes and State Treasurer Alexi Giannoulias have agreed to move forward with $1.3 billion in borrowing to make up the gap. The cash is expected to come in near the end of July and will go to pay down the backlog of bills.
Hynes’ report says without this borrowing, Quinn’s newly approved power to shift money from special funds to the general revenue fund and the securitization of national tobacco settlement payments, which will produce $1.2 billion upfront, Illinois would have no hope of meeting the extended December deadline to pay off last fiscal year’s bills.
But the report said services and programs for this year will suffer as Illinois stretches to pay down its debt. “It will be extremely challenging to close out fiscal year 2010 and maintain key functions of state government. Other than payments for mandated debt service on state bonds, general state aid to education, federal stimulus related Medicaid and critical state operations, an extremely limited amount of fiscal year 2011’s obligations are likely to be addressed in calendar year 2010 while the state is still dealing with the prior fiscal year’s bills.”
Thursday, February 04, 2010
Hynes concedes
By Jamey Dunn
Comptroller Dan Hynes conceded the Democratic nomination for governor to Gov. Pat Quinn this morning.
“Well, the people have spoken. And the votes have been counted. … We rose up but fell just a little short,” Hynes said at a news conference in Chicago. He said he called Quinn this morning to congratulate him.
An emotional Hynes pledged his support to Gov. Pat Quinn. He said after ethics scandals and financial turmoil, the state needs unity and should “choose peace.”
In reference to a competitive primary that produced attack ads on both sides, Hynes said: “It’s true that we had a few disagreements in this campaign. But that’s what happens in a spirited discussion about our future”
Hynes choked up while thanking his friends and family. He called on Illinois officials to work together and give Illinois a government “that just does the simple things that make our lives better.”
Quinn had already claimed victory in the primary. A call to his campaign was not immediately returned. UPDATE Quinn echoed Hynes' call for party unity at a news conference in Chicago this morning.
“The primary is over. Primaries are always difficult for everyone…but when it’s all over it’s like a family. We put aside differences.”
Wednesday, January 13, 2010
State of the state
By Jamey Dunn with Rachel Wells contributing
Governor Pat Quinn gave his State of the State address in front of the General Assembly today. While the speech lasted over an hour and was laced with emotional moments, Quinn did not offer any new ideas or specific policy plans.
Quinn delivered his speech while referring to notes on yellow legal paper, and chose to focus primarily on the positive. He outlined some of what he counted as successes since he became governor, such as the reopening of state historic sites and parks. He also highlighted the passage of a capital construction plan, campaign finance reform, a ban on texting while driving and a recall amendment. Quinn said he would like to see an amendment next to recall on the ballot in November that would allow citizens to petition for ethics reforms through a referendum system. Quinn said that passing the two amendments this year would “complete the job” of ethics reform that was started last session.
Quinn addressed some of the recent controversies that his administrating has faced. He touted the planned sale of Thomson prison to the federal government to house Guantanamo Bay detainees as a patriotic move that would benefit both the state and the feds.
The governor also brought up the “Meritorious Good Time Push” prisoner early release program that landed him in hot water recently. He maintained that he did not know that violent offenders were being included in the plan and that Department of Corrections director Michael Randle made the decisions on whom to let go early. However, Quinn did say that as chief executive officer, the ultimate responsibility was his. He added that the state still needs to consider whether it is cost effective to imprison “low-level nonviolent offenders.”
“The No. 1 issue in Illinois today is getting our economy back on track," Quinn said. However, it was not really the focus of his speech. Quinn did emphasize the need to create jobs, especially in the “green” sector. He once again pledged to build a new veterans home in Chicago, an airport in Peotone and threw his support behind high-speed rail. He also called for a “fair” tax increase that would use exemptions and tax credits to “cut taxes on people who need help the most.”
Quinn ended his speech with a tearful call to action to elected officials, encouraging bipartisan efforts to fix the state’s woes. Quinn said that his late father had told him “to work hard, to treat other people with dignity, don’t call people names, be honest be trustworthy.” He added, “That, to me, is what Illinois is all about. ...We can accomplish great things if we work together.”
The governor’s critics said the speech lacked substance and ignored the state’s dire financial situation. Comptroller Dan Hynes, Quinn’s Democratic opponent for governor, said he thought Quinn’s speech was “heartfelt” but “ a disappointment in a lot of ways because it failed to address the most important issues facing our state — the growing budget crisis, job losses, mounting debt and the fact that our communities are less safe.”
Calling this year’s State of the State address a “feel good … campaign speech,” House Republican Leader Tom Cross said Quinn lacked the specifics on budget cuts and did nothing to assure him that Quinn could actually accomplish his goals.
Cross questioned Quinn’s sincerity when it comes to bipartisanship. He expressed frustration that Quinn failed to meet with the Republican caucus — whose votes are not needed to pass most measures in the House – before his State of the State speech. He likened Quinn to Blagojevich in failing to include the minority party in most discussions.
“(Quinn) is wholly entrenched in the system. The gadfly political outsider has become the ultimate insider working with the speaker of the House and president of the Senate to preserve his power, to preserve his office,” Cross said.
Todd Maisch of the Illinois Chamber of Commerce said the governor needed to be more direct about his plans to help rebuild the state’s economy. “There were no specifics…there was no sense of urgency … what he talked about today sounds fine … but frankly it’s nibbling around the edges of a huge problem,” He said. “When it comes to the central issues that are facing Illinoisans — job losses and a state government that’s bankrupt — there was no take away today.”
State Treasurer Alexi Giannoulias, who is also a Democratic candidate for U.S. Senate, said Quinn is facing some big challenges. “It’s not dissimilar to the situation that President Obama faced when he took office,” said Giannoulias. “I think the one point that (Quinn) did hit on was that the next couple years will be some of the hardest years for state government that we’ve ever seen.”
Governor Pat Quinn gave his State of the State address in front of the General Assembly today. While the speech lasted over an hour and was laced with emotional moments, Quinn did not offer any new ideas or specific policy plans.
Quinn delivered his speech while referring to notes on yellow legal paper, and chose to focus primarily on the positive. He outlined some of what he counted as successes since he became governor, such as the reopening of state historic sites and parks. He also highlighted the passage of a capital construction plan, campaign finance reform, a ban on texting while driving and a recall amendment. Quinn said he would like to see an amendment next to recall on the ballot in November that would allow citizens to petition for ethics reforms through a referendum system. Quinn said that passing the two amendments this year would “complete the job” of ethics reform that was started last session.
Quinn addressed some of the recent controversies that his administrating has faced. He touted the planned sale of Thomson prison to the federal government to house Guantanamo Bay detainees as a patriotic move that would benefit both the state and the feds.
The governor also brought up the “Meritorious Good Time Push” prisoner early release program that landed him in hot water recently. He maintained that he did not know that violent offenders were being included in the plan and that Department of Corrections director Michael Randle made the decisions on whom to let go early. However, Quinn did say that as chief executive officer, the ultimate responsibility was his. He added that the state still needs to consider whether it is cost effective to imprison “low-level nonviolent offenders.”
“The No. 1 issue in Illinois today is getting our economy back on track," Quinn said. However, it was not really the focus of his speech. Quinn did emphasize the need to create jobs, especially in the “green” sector. He once again pledged to build a new veterans home in Chicago, an airport in Peotone and threw his support behind high-speed rail. He also called for a “fair” tax increase that would use exemptions and tax credits to “cut taxes on people who need help the most.”
Quinn ended his speech with a tearful call to action to elected officials, encouraging bipartisan efforts to fix the state’s woes. Quinn said that his late father had told him “to work hard, to treat other people with dignity, don’t call people names, be honest be trustworthy.” He added, “That, to me, is what Illinois is all about. ...We can accomplish great things if we work together.”
The governor’s critics said the speech lacked substance and ignored the state’s dire financial situation. Comptroller Dan Hynes, Quinn’s Democratic opponent for governor, said he thought Quinn’s speech was “heartfelt” but “ a disappointment in a lot of ways because it failed to address the most important issues facing our state — the growing budget crisis, job losses, mounting debt and the fact that our communities are less safe.”
Calling this year’s State of the State address a “feel good … campaign speech,” House Republican Leader Tom Cross said Quinn lacked the specifics on budget cuts and did nothing to assure him that Quinn could actually accomplish his goals.
Cross questioned Quinn’s sincerity when it comes to bipartisanship. He expressed frustration that Quinn failed to meet with the Republican caucus — whose votes are not needed to pass most measures in the House – before his State of the State speech. He likened Quinn to Blagojevich in failing to include the minority party in most discussions.
“(Quinn) is wholly entrenched in the system. The gadfly political outsider has become the ultimate insider working with the speaker of the House and president of the Senate to preserve his power, to preserve his office,” Cross said.
Todd Maisch of the Illinois Chamber of Commerce said the governor needed to be more direct about his plans to help rebuild the state’s economy. “There were no specifics…there was no sense of urgency … what he talked about today sounds fine … but frankly it’s nibbling around the edges of a huge problem,” He said. “When it comes to the central issues that are facing Illinoisans — job losses and a state government that’s bankrupt — there was no take away today.”
State Treasurer Alexi Giannoulias, who is also a Democratic candidate for U.S. Senate, said Quinn is facing some big challenges. “It’s not dissimilar to the situation that President Obama faced when he took office,” said Giannoulias. “I think the one point that (Quinn) did hit on was that the next couple years will be some of the hardest years for state government that we’ve ever seen.”
Friday, January 08, 2010
State gets some cash to pay late bills
The state got an infusion of cash from a borrowing deal that could soon go toward its backlog of unpaid bills.
In a move approved by the legislature in July, Illinois sold $3.4 billion in bonds Thursday to pay off the state’s pension obligation. The money will cover the state’s contribution for the rest of the fiscal year, so the payments the state has been making in anticipation of the loan will now be returned to its coffers.
$843 million will be used to pay down part of Illinois’ overdue bills, which Comptroller Dan Hynes said Wednesday total $5.1 billion. Hynes said an additional $1.4 billion in health care bills have not yet reached his desk.
David Vaught, director of Gov. Pat Quinn's Office of Management and Budget, said while Quinn can make suggestions about where the money goes, Hynes has the final authority to distribute it. When asked how soon the money might start going out, Vaught said, “I think it will be pretty immediate.”
Tuesday, December 15, 2009
Feds to buy Thomson prison
By Jamey Dunn
His Democratic challenger, Comptroller Dan Hynes, supports the plan to sell Thomson. However, he questioned Quinn’s involvement in the release of Illinois prisoners who only served weeks of their sentences. “The governor is asking the people of Illinois to trust him on this difficult [Thomson] issue, which understandably causes some unease. It turns out his administration is secretly releasing criminals, some violent, from prison early.”
Quinn’s Republican opponents say that Thomson, which has never been filled to capacity, should stay under the control of the state and be opened to alleviate overcrowding in Illinois’ prison system. “How bad is it in Illinois? Our economic development program consists of relocating terrorists, and we have to argue about whether or not we should release violent criminals early,” Dan Proft, Chicago Republican gubernatorial candidate, said. “These are not complicated matters.”
Thursday, October 22, 2009
Quinn seeks a full term as governor in 2010
By Bethany Jaeger
At this time last year, Rod Blagojevich was governor and battling with the state legislature to restore funding to human services and to state parks and historic sites. Meanwhile, federal prosecutors continued to indict members of Blagojevich’s inner circle in an ongoing investigation into political corruption, which foreshadowed his impeachment and removal from office. At the same time, Pat Quinn was lieutenant governor, urging voters to approve a referendum to call another constitutional convention to rewrite the state charter.
It’s been nine months since Quinn replaced Blagojevich in the executive office. In that time, he’s had to lead Illinois through a bruised public confidence in government, a nationwide recession and a state budget deficit that once was projected at $12.4 billion.
Last spring, he urged legislators to approve a two-year flat income tax increase from 3 percent to 4.5 percent for all income levels, minus a personal exemption for low-income families, to stave off deeper cuts to state programs.
But while stopping in Springfield today as part of a nine-city tour officially launching his bid for a full term as governor in 2010, Quinn did not mention the need for an income tax increase. He, instead, laid out a platform of reviving the economy by creating jobs through public works projects, investing in “green” jobs by developing alternative energy sources, increasing investments in education, leveraging state assets to help small businesses access capital and promoting Illinois trade and tourism.
He did not offer specifics, such as whether the initiatives would be funded through existing programs or through new spending programs.
When asked by reporters at Springfield’s Abraham Lincoln Capital Airport whether he had or would change his tax hike proposal, Quinn said: “The time to do that, I think, will be next year after the primary because there’s not going to be a General Assembly session until then, unless there’s an emergency. And I don’t think the votes are there today for that, so we just have to keep working on it.”
His opponent in the Democratic primary is three-term state Comptroller Dan Hynes, who announced his bid in September. Hynes issued a statement today criticizing Quinn’s “passing remark” on the state’s budget deficit.
“I, too, support jobs and better education, but until we have a plan to pay our bills, balance our budget and emerge from the fiscal hole that is threatening the future of Illinois, these campaign promises ring hollow,” Hynes said in the statement.
Hynes has proposed that after a series of cost-saving initiatives in his first year in office, he would pursue a graduated income tax increase. According to his campaign, the increased rate would primarily affect taxpayers earning more than $200,000 a year. Changing the income tax structure from a flat rate to a graduated rate, however, would require changing the state Constitution. That would require the state legislature to approve placing the question on the general election ballot in November 2010 for the constitutional amendment to take effect in 2011.
Neither Quinn’s nor Hynes’ income tax proposal would take effect and generate revenue soon enough to save the next fiscal year’s budget.
Quinn said in Springfield today: “I didn’t create the deficit. I inherited it. But I think I’m the person to repair the damage, working with people. ... I think I’ve shown over the time I’ve been governor that we’ve been able to stabilize the government, restore the honor and integrity to the office of governor. You have to have a governor that people trust and know is an honest person, and I think I am.”
He pointed to his involvement in enacting a $31 billion capital construction program, revamping the state’s public access laws, reforming the state’s procurement and contracting rules and state ethics laws for lobbyists and passing a referendum to allow voters to recall sitting governors to the 2010 ballot.
While he said it’s an honor to be the governor of Illinois, he added that it’s also a public trust. “And I want to assure the people of Illinois that my heart is ever at your service.
For more background on Quinn, read Illinois Issues February issue.
At this time last year, Rod Blagojevich was governor and battling with the state legislature to restore funding to human services and to state parks and historic sites. Meanwhile, federal prosecutors continued to indict members of Blagojevich’s inner circle in an ongoing investigation into political corruption, which foreshadowed his impeachment and removal from office. At the same time, Pat Quinn was lieutenant governor, urging voters to approve a referendum to call another constitutional convention to rewrite the state charter.
It’s been nine months since Quinn replaced Blagojevich in the executive office. In that time, he’s had to lead Illinois through a bruised public confidence in government, a nationwide recession and a state budget deficit that once was projected at $12.4 billion.
Last spring, he urged legislators to approve a two-year flat income tax increase from 3 percent to 4.5 percent for all income levels, minus a personal exemption for low-income families, to stave off deeper cuts to state programs.
But while stopping in Springfield today as part of a nine-city tour officially launching his bid for a full term as governor in 2010, Quinn did not mention the need for an income tax increase. He, instead, laid out a platform of reviving the economy by creating jobs through public works projects, investing in “green” jobs by developing alternative energy sources, increasing investments in education, leveraging state assets to help small businesses access capital and promoting Illinois trade and tourism.
He did not offer specifics, such as whether the initiatives would be funded through existing programs or through new spending programs.
When asked by reporters at Springfield’s Abraham Lincoln Capital Airport whether he had or would change his tax hike proposal, Quinn said: “The time to do that, I think, will be next year after the primary because there’s not going to be a General Assembly session until then, unless there’s an emergency. And I don’t think the votes are there today for that, so we just have to keep working on it.”
His opponent in the Democratic primary is three-term state Comptroller Dan Hynes, who announced his bid in September. Hynes issued a statement today criticizing Quinn’s “passing remark” on the state’s budget deficit.
“I, too, support jobs and better education, but until we have a plan to pay our bills, balance our budget and emerge from the fiscal hole that is threatening the future of Illinois, these campaign promises ring hollow,” Hynes said in the statement.
Hynes has proposed that after a series of cost-saving initiatives in his first year in office, he would pursue a graduated income tax increase. According to his campaign, the increased rate would primarily affect taxpayers earning more than $200,000 a year. Changing the income tax structure from a flat rate to a graduated rate, however, would require changing the state Constitution. That would require the state legislature to approve placing the question on the general election ballot in November 2010 for the constitutional amendment to take effect in 2011.
Neither Quinn’s nor Hynes’ income tax proposal would take effect and generate revenue soon enough to save the next fiscal year’s budget.
Quinn said in Springfield today: “I didn’t create the deficit. I inherited it. But I think I’m the person to repair the damage, working with people. ... I think I’ve shown over the time I’ve been governor that we’ve been able to stabilize the government, restore the honor and integrity to the office of governor. You have to have a governor that people trust and know is an honest person, and I think I am.”
He pointed to his involvement in enacting a $31 billion capital construction program, revamping the state’s public access laws, reforming the state’s procurement and contracting rules and state ethics laws for lobbyists and passing a referendum to allow voters to recall sitting governors to the 2010 ballot.
While he said it’s an honor to be the governor of Illinois, he added that it’s also a public trust. “And I want to assure the people of Illinois that my heart is ever at your service.
For more background on Quinn, read Illinois Issues February issue.
Wednesday, September 02, 2009
Hynes challenges Quinn and his tax plan
By Bethany Jaeger
The Democratic primary election between Illinois Gov. Pat Quinn and Comptroller Dan Hynes gained another dynamic Wednesday as Hynes officially announced his candidacy for governor with a proposal to raise the state income tax based on income.
Both political campaigns are staying true to their original slogans that we wrote about during the State Fair. Hynes says Quinn received his job by default after the legislature impeached former Gov. Rod Blagojevich and that Quinn has since failed to implement a consistent and calibrated agenda. Quinn, on the other hand, maintains that Hynes, as comptroller, has stood on the sidelines as a “shrinking violet.”
Before today, however, Hynes had not officially announced where he stood on an income tax increase other than saying the legislature and governor should look to cut spending first. On Wednesday, he announced, first in Chicago then in Springfield, a three-step plan that would rely on various cuts and efficiencies this fiscal year and propose a graduated income tax next fiscal year.
Because the state Constitution specifies Illinois’ income tax rate is a “flat” rate applied evenly to individuals, as well as a separate flat rate applied to businesses, changing the tax structure to a graduated rate would require a constitutional amendment. Hynes said he would want the General Assembly to approve a measure to put the question to voters about whether to change the Constitution in the November 2010 election.
The graduated rate, according to Hynes, would range from the current 3 percent on individuals to a new 7.5 percent, which Hynes said would only apply to individuals who make more than $1 million a year. He would not change the corporate rate. If instituted in January 2011, Hynes said the new tax would generate $5.5 billion to help close the budget deficit his second year in office.
Quinn, in his March budget proposal to the General Assembly, proposed raising the individual income tax rate from 3 percent to 4.5 percent and the corporate rate from 4.8 percent to 7.2 percent, but he would keep the rate “flat,” which would not require a constitutional amendment.
“Rather than taking years to enact through a constitutional amendment, it could have been done quickly through an act of the legislature,” said John Kupper, spokesman for the Taxpayers for Quinn campaign.
Quinn also wanted to triple the personal tax exemption, which he said in March would mean that about half of the state’s taxpayers would pay less, while the other half would pay more than they currently do.
Today, Hynes countered that Quinn would levy a 50 percent higher tax rate on all taxpayers, while his proposal would only increase taxes on those making more than $200,000 a year. “Because of the graduated income tax and the way it is designed, you’re actually going to pay more under Pat Quinn’s plan, even if you make a half a million dollars a year,” Hynes said in Springfield. “That is why his plan is not only inequitable and unfair, but really, wrongheaded and backwards.”
Both Quinn and Hynes use similar language — cut spending before seeking higher taxes — (we quoted Quinn as saying it in June, when budget negotiations hit a stalemate). Quinn cut $1 billion in spending already and said he is working toward another $1 billion as part of the final budget agreement for fiscal year 2010 (the current year).
But Hynes says Quinn’s approach to cutting is across-the-board and, therefore, unfair. Instead, one of Hynes’ cost-cutting proposals is to fire half of Blagojevich’s political employees or appointees making more than $70,000 a year. Hynes said his campaign identified 1,600 such employees through state payroll. Firing half of them, or 800 workers, would save $100 million a year, he said, but it would be up to the governor and his agency directors to determine which half to fire.
Other immediate cost-saving measures proposed by Hynes today include reducing discretionary grants, slashing contracts for advertising, consulting and other professional services and closing so-called tax loopholes by expanding the state sales tax to include such “luxury” services as Botox cosmetic injections, car and truck rentals and membership of private clubs. He’d also borrow $1.5 billion to pay down backlogged bills, which he said would leverage enhanced federal reimbursements temporarily available through the federal stimulus package.
Hynes said those would be the prelude to the second year, when he would then increase the income tax, merge the comptroller’s and treasurer’s offices and create two or three more gaming licenses to open new casinos, among other ideas. (See his proposals here.)
Several of his ideas — instituting a graduated income tax structure, building three new casinos, increasing the sales tax on cigarettes by $1, closing corporate tax breaks and prohibiting the state from rolling over unpaid bills into the next fiscal year — have been proposed within the past few years but have all stalled in the legislature.
In a phone interview shortly after the Springfield event, Hynes said legislators who opposed those ideas in the past might look at them in a different light under the current economic and fiscal circumstances. He added that his leadership style would differ. “I’d like to think that I have the ability to persuade lawmakers that this is the correct path. Part of that is leadership. Part of it is having a clear vision and being consistent, not wavering, not waffling and not changing your opinion, your position and your plan every week.”
Kupper of the Quinn campaign dismissed Hynes’ ideas as playing politics. “In a very real sense, this is a proposal that was put together for the benefit of a political campaign and not a serious effort to address the state’s fiscal problems,” he said. “It’s a lot of rehashed proposals that came right out of the political playbook 101. The question is better addressed to Dan Hynes as to how he is going to enact these things, since he’s pretty much been on the sidelines as these budget issues have been debated.”
The Democratic primary election between Illinois Gov. Pat Quinn and Comptroller Dan Hynes gained another dynamic Wednesday as Hynes officially announced his candidacy for governor with a proposal to raise the state income tax based on income.
Both political campaigns are staying true to their original slogans that we wrote about during the State Fair. Hynes says Quinn received his job by default after the legislature impeached former Gov. Rod Blagojevich and that Quinn has since failed to implement a consistent and calibrated agenda. Quinn, on the other hand, maintains that Hynes, as comptroller, has stood on the sidelines as a “shrinking violet.”
Before today, however, Hynes had not officially announced where he stood on an income tax increase other than saying the legislature and governor should look to cut spending first. On Wednesday, he announced, first in Chicago then in Springfield, a three-step plan that would rely on various cuts and efficiencies this fiscal year and propose a graduated income tax next fiscal year.
Because the state Constitution specifies Illinois’ income tax rate is a “flat” rate applied evenly to individuals, as well as a separate flat rate applied to businesses, changing the tax structure to a graduated rate would require a constitutional amendment. Hynes said he would want the General Assembly to approve a measure to put the question to voters about whether to change the Constitution in the November 2010 election.
The graduated rate, according to Hynes, would range from the current 3 percent on individuals to a new 7.5 percent, which Hynes said would only apply to individuals who make more than $1 million a year. He would not change the corporate rate. If instituted in January 2011, Hynes said the new tax would generate $5.5 billion to help close the budget deficit his second year in office.
Quinn, in his March budget proposal to the General Assembly, proposed raising the individual income tax rate from 3 percent to 4.5 percent and the corporate rate from 4.8 percent to 7.2 percent, but he would keep the rate “flat,” which would not require a constitutional amendment.
“Rather than taking years to enact through a constitutional amendment, it could have been done quickly through an act of the legislature,” said John Kupper, spokesman for the Taxpayers for Quinn campaign.
Quinn also wanted to triple the personal tax exemption, which he said in March would mean that about half of the state’s taxpayers would pay less, while the other half would pay more than they currently do.
Today, Hynes countered that Quinn would levy a 50 percent higher tax rate on all taxpayers, while his proposal would only increase taxes on those making more than $200,000 a year. “Because of the graduated income tax and the way it is designed, you’re actually going to pay more under Pat Quinn’s plan, even if you make a half a million dollars a year,” Hynes said in Springfield. “That is why his plan is not only inequitable and unfair, but really, wrongheaded and backwards.”
Both Quinn and Hynes use similar language — cut spending before seeking higher taxes — (we quoted Quinn as saying it in June, when budget negotiations hit a stalemate). Quinn cut $1 billion in spending already and said he is working toward another $1 billion as part of the final budget agreement for fiscal year 2010 (the current year).
But Hynes says Quinn’s approach to cutting is across-the-board and, therefore, unfair. Instead, one of Hynes’ cost-cutting proposals is to fire half of Blagojevich’s political employees or appointees making more than $70,000 a year. Hynes said his campaign identified 1,600 such employees through state payroll. Firing half of them, or 800 workers, would save $100 million a year, he said, but it would be up to the governor and his agency directors to determine which half to fire.
Other immediate cost-saving measures proposed by Hynes today include reducing discretionary grants, slashing contracts for advertising, consulting and other professional services and closing so-called tax loopholes by expanding the state sales tax to include such “luxury” services as Botox cosmetic injections, car and truck rentals and membership of private clubs. He’d also borrow $1.5 billion to pay down backlogged bills, which he said would leverage enhanced federal reimbursements temporarily available through the federal stimulus package.
Hynes said those would be the prelude to the second year, when he would then increase the income tax, merge the comptroller’s and treasurer’s offices and create two or three more gaming licenses to open new casinos, among other ideas. (See his proposals here.)
Several of his ideas — instituting a graduated income tax structure, building three new casinos, increasing the sales tax on cigarettes by $1, closing corporate tax breaks and prohibiting the state from rolling over unpaid bills into the next fiscal year — have been proposed within the past few years but have all stalled in the legislature.
In a phone interview shortly after the Springfield event, Hynes said legislators who opposed those ideas in the past might look at them in a different light under the current economic and fiscal circumstances. He added that his leadership style would differ. “I’d like to think that I have the ability to persuade lawmakers that this is the correct path. Part of that is leadership. Part of it is having a clear vision and being consistent, not wavering, not waffling and not changing your opinion, your position and your plan every week.”
Kupper of the Quinn campaign dismissed Hynes’ ideas as playing politics. “In a very real sense, this is a proposal that was put together for the benefit of a political campaign and not a serious effort to address the state’s fiscal problems,” he said. “It’s a lot of rehashed proposals that came right out of the political playbook 101. The question is better addressed to Dan Hynes as to how he is going to enact these things, since he’s pretty much been on the sidelines as these budget issues have been debated.”
Wednesday, August 19, 2009
Governor’s Day highlights 2010 primary
By Bethany Jaeger
Democrats got a preview Wednesday of what to expect leading up to the February 2 primary election: a partial-term governor who says an income tax increase is necessary to maintain essential state services versus a state comptroller who says citizens shouldn’t have a governor by default. They should have a choice.
Comptroller Dan Hynes stood a few feet away from Gov. Pat Quinn this morning when he said Illinois needs a governor who leads with “no sugarcoating, no short-cuts, no excuses.”
“We need a governor who can provide strong and steady leadership for smart budget policies that will put us on solid financial ground, and we will need a leader who will offer a clear, consistent and compelling vision for our future,” Hynes said. “That’s what this election is about.”
He spoke to a packed banquet hall during an annual breakfast of the Illinois Democratic County Chairmen’s Association in Springfield. Many Illinois elected officials typically attend the event before the annual State Fair rally day for Democrats.
Hynes continued to say that the Democratic Party has been through too much to take the path of least resistance. “The people of Illinois have been through too much to avoid asking tough questions and facing a public debate about which vision our party will embrace. I respect Pat Quinn. I find him to be a decent man, but this nomination must be earned, not bequeathed or signed or transferred. It must be earned.”
A few moments later, Quinn in his speech countered that on March 18, he proposed a budget that would raise the state income tax as a way to balance a severely out-of-whack budget and help recover from the aftermath of a nationwide recession. “Talk about courage. Talk about not sugarcoating our budget deficit. We have to tell the truth to the people of Illinois.”
Throughout his speech, Quinn thanked all statewide officers except Hynes. He even thanked local politicians, including Cook County Sheriff Tom Dart. The governor later said he would defend his record against Hynes’ statements, particularly since the comptroller has not endorsed the idea of an income tax increase. “He can stand on the sidelines and throw bricks at the guy in the middle of the arena, but I think part of the job of governor is not to be a shrinking violet, to take positions and to defend those positions and tell the people what they need to know,” Quinn said.
Hynes chose not to attend a Democratic rally at the State Fairgrounds later in the day because, he said, Quinn deserved to host of the annual Governor’s Day, a State Fair tradition. I ran into Hynes after the rally, when he said his budget plan would start with spending cuts, then find new revenues. "We have to eliminate wasteful spending and show the people that we’re doing everything we can to sacrifice and streamline before we ask them to pay more. And that hasn’t yet happened. Gov. Quinn has really been unwilling to do those tough things.”
As part of the budget agreement with the state legislature, Quinn already has cut $1 billion in spending and is charged with reducing another $1 billion before the end of the fiscal year. Among many other spending decreases, Quinn seeks furlough days and layoffs for state employees. But some of those plans require negotiations with public employee unions, who strongly oppose both ideas and instead say an income tax increase is necessary.
Governor’s Day at the State Fair
The Democratic rally completely differed from the past six years. The absence of former Gov. Rod Blagojevich, as well as busloads of union supporters that Blagojevich’s campaign brought in, made a difference. For the first time, the House speaker, the Senate president and the governor sat next to each other. Even Attorney General Lisa Madigan joined the rally, which she has not attended in a few years.
There was little drama, other than jokes made about six of at least eight candidates for lieutenant governor sitting on the stage together and addressing the crowd one by one.
Democratic leaders acknowledged that their political party faces many challenges, particularly the ethical lapses and fiscal woes exposed within the last year, but they tried to frame Blagojevich’s impeachment as a result of their proactive steps.
“As we face a challenge of ethics and integrity, it was the Democrats in the Illinois House of Representatives that initiated the impeachment proceeding against their own Democratic governor,” said House Speaker Michael Madigan. “We’re not happy with what happened, but when the time came, we were more than capable to make a decision that one of our own had done wrong and must be removed from office.”
Republicans will try not to let them get away with that, however. Senate Minority Leader Christine Radogno, whom I stood next to in the Statehouse basement during a tornado warning, countered the Democratic message. “They can try as hard as they want, but the people of this state are smarter than that. And the fact of the matter is, people need to remember, the Democrat legislature enabled Blagojevich from Day 1. So it’s difficult for them just to walk away now.” Madigan also co-chaired Blagojevich’s reelection campaign, she added.
Republicans will have their rally day at the State Fair on Thursday.
Democrats got a preview Wednesday of what to expect leading up to the February 2 primary election: a partial-term governor who says an income tax increase is necessary to maintain essential state services versus a state comptroller who says citizens shouldn’t have a governor by default. They should have a choice.
Comptroller Dan Hynes stood a few feet away from Gov. Pat Quinn this morning when he said Illinois needs a governor who leads with “no sugarcoating, no short-cuts, no excuses.”
“We need a governor who can provide strong and steady leadership for smart budget policies that will put us on solid financial ground, and we will need a leader who will offer a clear, consistent and compelling vision for our future,” Hynes said. “That’s what this election is about.”
He spoke to a packed banquet hall during an annual breakfast of the Illinois Democratic County Chairmen’s Association in Springfield. Many Illinois elected officials typically attend the event before the annual State Fair rally day for Democrats.
Hynes continued to say that the Democratic Party has been through too much to take the path of least resistance. “The people of Illinois have been through too much to avoid asking tough questions and facing a public debate about which vision our party will embrace. I respect Pat Quinn. I find him to be a decent man, but this nomination must be earned, not bequeathed or signed or transferred. It must be earned.”
A few moments later, Quinn in his speech countered that on March 18, he proposed a budget that would raise the state income tax as a way to balance a severely out-of-whack budget and help recover from the aftermath of a nationwide recession. “Talk about courage. Talk about not sugarcoating our budget deficit. We have to tell the truth to the people of Illinois.”
Throughout his speech, Quinn thanked all statewide officers except Hynes. He even thanked local politicians, including Cook County Sheriff Tom Dart. The governor later said he would defend his record against Hynes’ statements, particularly since the comptroller has not endorsed the idea of an income tax increase. “He can stand on the sidelines and throw bricks at the guy in the middle of the arena, but I think part of the job of governor is not to be a shrinking violet, to take positions and to defend those positions and tell the people what they need to know,” Quinn said.
Hynes chose not to attend a Democratic rally at the State Fairgrounds later in the day because, he said, Quinn deserved to host of the annual Governor’s Day, a State Fair tradition. I ran into Hynes after the rally, when he said his budget plan would start with spending cuts, then find new revenues. "We have to eliminate wasteful spending and show the people that we’re doing everything we can to sacrifice and streamline before we ask them to pay more. And that hasn’t yet happened. Gov. Quinn has really been unwilling to do those tough things.”
As part of the budget agreement with the state legislature, Quinn already has cut $1 billion in spending and is charged with reducing another $1 billion before the end of the fiscal year. Among many other spending decreases, Quinn seeks furlough days and layoffs for state employees. But some of those plans require negotiations with public employee unions, who strongly oppose both ideas and instead say an income tax increase is necessary.
Governor’s Day at the State Fair
The Democratic rally completely differed from the past six years. The absence of former Gov. Rod Blagojevich, as well as busloads of union supporters that Blagojevich’s campaign brought in, made a difference. For the first time, the House speaker, the Senate president and the governor sat next to each other. Even Attorney General Lisa Madigan joined the rally, which she has not attended in a few years.
There was little drama, other than jokes made about six of at least eight candidates for lieutenant governor sitting on the stage together and addressing the crowd one by one.
Democratic leaders acknowledged that their political party faces many challenges, particularly the ethical lapses and fiscal woes exposed within the last year, but they tried to frame Blagojevich’s impeachment as a result of their proactive steps.
“As we face a challenge of ethics and integrity, it was the Democrats in the Illinois House of Representatives that initiated the impeachment proceeding against their own Democratic governor,” said House Speaker Michael Madigan. “We’re not happy with what happened, but when the time came, we were more than capable to make a decision that one of our own had done wrong and must be removed from office.”
Republicans will try not to let them get away with that, however. Senate Minority Leader Christine Radogno, whom I stood next to in the Statehouse basement during a tornado warning, countered the Democratic message. “They can try as hard as they want, but the people of this state are smarter than that. And the fact of the matter is, people need to remember, the Democrat legislature enabled Blagojevich from Day 1. So it’s difficult for them just to walk away now.” Madigan also co-chaired Blagojevich’s reelection campaign, she added.
Republicans will have their rally day at the State Fair on Thursday.
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