State's unpaid bills in the billions - Quinn points to $3.9 billion in state debts as he chops jobs and programs, renews call for income tax hike

State's unpaid bills in the billions - Quinn points to $3.9 billion in state debts as he chops jobs and programs, renews call for income tax hike
BY CHRIS FUSCO AND DAVE MCKINNEY
Copyright by The Chicago Sun-Times
August 1, 2009
http://www.suntimes.com/news/politics/1695836,CST-NWS-quinn01.article


Despite billions of dollars in cuts, 2,500 planned layoffs and a strategy to save money by reducing the number of state prison inmates, Illinois is still awash in red ink.

"We're implementing what some legislators screamed to the heavens for: cut, cut, cut. We've cut. We've cut from here to kingdom come," Gov. Quinn said Friday during a long-awaited news conference outlining state spending for this fiscal year. "We've done all this, but we have to deal with the fiscal reality that we have a revenue shortfall to pay our bills."

The bleak outlook sparked Quinn to again call on state lawmakers to approve an income tax increase when they return to Springfield in October for their fall veto session.

State government owes health-care providers, social service agencies and other contractors an unprecedented $3.9 billion in unpaid bills from last year, Quinn said.

And -- even after hacking back state spending -- Illinois this year will still be $1.2 billion behind when it comes to covering health-insurance costs for state employees and poor people on Medicaid, he said.

The state also won't have enough money to fund hundreds of millions of dollars worth of college scholarships and education programs.

Quinn tried to preserve as many social service programs as possible but said he could not avoid cutting $250 million in state grants -- most to social service providers.

His news conference capped off a rather unusual odyssey since state lawmakers approved a budget July 15. Rather than suggest cuts as they normally do, lawmakers gave Quinn the authority to do most of the slashing.

Even before July 15, the governor began the process of laying off 2,552 state workers and forcing most others to take 12 furlough days. The Department of Corrections would lose the most employees -- 1,073 -- as part of a restructuring designed to get inmates back into communities more quickly.

Quinn said he might be able to ease state job cuts if workers are willing to renegotiate their union contracts. "If the unions, say, take a pay freeze, they could help save a lot of jobs," Quinn said. "A lot of states have had this. A lot of cities have had this."

Henry Bayer, executive director of AFSCME Council 31, a major state labor union, lambasted Quinn's cuts without addressing whether unions plan to come to the table.

"By slashing thousands of jobs, these cuts contradict and undermine President Obama's efforts to fight the recession, protect public services and keep Americans working," Bayer said. "Every Illinoisan must demand that lawmakers and the governor renounce these damaging cuts, commit to raising new revenue, and return to the Capitol as soon as necessary to fix this broken budget."

Rep. David Miller (D-Dolton), who advocated for an income tax increase that failed earlier this year, praised Quinn for following through with the hand he was dealt. Like the governor, Miller says legislators unwilling to consider a tax hike might reconsider once the cuts have had time to percolate for several months and vulnerable segments of the population suffer in some way.

"It's going to be a dose of reality," Miller said. "Quinn is doing what he said he had to do and what lawmakers -- Republicans and some Democrats -- wanted him to do. Well, he did it. Now what?"

Friday morning, Quinn's administration faced criticism for the way in which it intended to inform the public about the cuts. Initially, the governor's office imposed an embargo on the release of budgetary information and was pressing reporters not to record or videotape a budget briefing to be led by Quinn's chief of staff, Jerome Stermer.

But the administration later backed off that plan, opting instead to have Quinn, Stermer and other staffers hold a long question-and-answer session with reporters at the Thompson Center.

"We're here to answer your questions until the cows come home," Quinn said during the news conference.