Quinn Eyes Borrowing Up to $15 Billion to Pay Off State Debts

By Chuck Sudo in News on Dec 28, 2010 3:15PM

We already know that Illinois is a deadbeat state, like Cousin Eddie in the "Vacation" movies. Springfield has been borrowing from Peter to pay Paul for years. Now, in order to square what the state owes to schools, social work agencies and health care agencies that are owed payments, Gov. Quinn is floating the idea of borrowing up to $15 billion more.

The loan, which Quinn is calling a "debt bond," is being touted by Quinn as a quick influx of capital for those agencies waiting for Springfield to settle its IOUs, with the caveat that it could be paid off within a year. The problem with that is Illinois is already paying penalties on previous loans in which it's fallen behind.

If the plan goes through, the General Assembly will next have to come up with plans for repaying the loan. The most obvious way — an increase in the state income tax — is the one almost everyone is going to rail against. If Quinn pushes for the income tax increase. Recognizing this, House Speaker Michael Madigan has been polling Democrats in Springfield regarding a litany of tax-hike options that might be more palatable to the public.

Other Democrats, like Skokie representative Lou Lang, are taking the same "we're already in the mud, let's get dirty" approach that led to this budget crisis.

"That sounds like a lot of money to borrow, but we already owe that money," said Rep. Lou Lang, D-Skokie. "So I don't think people should get too hot and bothered to borrow the money to pay the people we owe. As long as we have a revenue stream to pay it back, it sounds like a good policy to me."