Illinois budget increases spending as state's monumental debt accrues

Friday, May 05, 2006 - Posted 7:42:08 AM by Office of Sen. Dan Rutherford

Springfield, IL – Democrat leaders forced a $59 billion budget out of the General Assembly on strict party lines, despite protests from Republican lawmakers that legislation defers the state’s current debt obligations while increasing spending through continued raids of the Illinois’ severely under-funded pension system and special dedicated funds.

State Senator Dan Rutherford (R-Pontiac) voted against the budget, which was balanced by skipping $1.1 billion in payments to the retirement systems of Illinois’ downstate and suburban teachers and state employees.

The pension system was raided for the second year in a row, despite warnings from pension authorities who cautioned that looting the pension system—which is already ranked the worst funded in the nation—will only serve to increase the systems’ deficit, and could cost the state tens of millions of dollars in the long run.

“Skipping pension payments is a quick-fix. By forgoing payments to the retirement systems for two years, Illinois is incurring billions of dollars in interest and debt,” said Rutherford.

Rutherford explained that the budget increases state spending by $1.4 billion, bringing the total spending increase over the last four years to approximately $3.5 billion. As state spending increases, so has Illinois’ debt. The senator explained that the state currently owes doctors and hospitals almost $2 billion in unpaid bills.

“The Governor is introducing expensive new programs, even as current obligations go unfunded. In some instances Illinois six or seven months behind in its payments to Medicaid providers, and many nursing homes, doctors and hospitals are in serious financial jeopardy,” said Rutherford.

“Recently, residents of a LaHarpe nursing home were forced to hold a fund drive in order to pay the home’s bills, and many of facilities and health care providers are only staying afloat because of the patience and understanding of their banks, landlords and vendors. It’s commonsense: Illinois should fulfill its existing responsibilities before undertaking any new initiatives.”

Rutherford also said that the budget allocation for the state’s higher education system will do little to help the state’s universities and community colleges, which are struggling financially after three years of budget cuts. He noted that Illinois State University was allocated a 1.3% budget increase—the second lowest allotment for any state university.

“While I’m sure school administrators are happy to receive an increase of some type, the reality is that such a small increase will do very little to help the universities recover from three years of funding cuts,” said Rutherford.

A consistent opponent of the fund sweeps that have been used to balance the budget over the last four years, Rutherford also spoke out against an additional $200 million in fund raids of nearly 100 important state funds included in the current budget.

“Not only is it irresponsible to fund programs by taking the revenue from one program and diverting it into another, I think it is deceitful to divert funds for purposes other than that for which they were intended,” Rutherford said. “I know that these are tough fiscal times for this state, but instead of relying on ‘surpluses’ from these funds, the Governor simply needs to cut back on spending and fight the urge to implement new programs. We’ve been robbing Peter to pay Paul for the last four years at the expense of Illinois’ current and future taxpayers.”