Our Opinion: Borrow to get state bills paid quickly
THE STATE JOURNAL-REGISTER : Posted May 17, 2011
If you don’t have a family member who benefits from the services of Sparc, you may be unaware of just how valuable a resource it is to this community.
For 60 years, Sparc has helped people with developmental disabilities lead productive lives by providing them jobs and allowing them to live in residential settings rather than in state-run institutions. It does this at one-fourth the cost of institutionalization. Its Respite program gives parents in 85 families much-needed breaks in caring for developmentally disabled children at home. Its epilepsy support group is used by 130 families coping with epileptic loved ones.
Its thanks for providing these services? The state is more than $2 million in arrears to Sparc, which has had to resort to borrowing to pay its bills. It recently received a $450,000 payment for services it provided in November.
As State Journal-Register business editor Tim Landis reported on Sunday, Sparc is at the head of a very long line of service providers in the Springfield area who have been waiting for six months or more for payment from the state of Illinois. From health-care providers to hardware suppliers, businesses that provide goods and services to the state have learned to cope with long waits for their bills to be paid. The state owes $9.6 million to businesses locally, Landis found.
Counting businesses, local governments, school districts and social service agencies statewide, the state will be $8 billion behind in paying its bills by the end of the fiscal year, according to Comptroller Judy Baar Topinka.
To put it another way, that’s $8 billion sucked out of the Illinois economy as those entities are forced to cope with the debt.
We fought a losing battle earlier this year when we advocated for a borrowing plan pushed by Gov. Pat Quinn that would have borrowed $8.75 billion to get the state up to date on its bills. We reasoned that it’s smarter to sell the current debt to bond buyers than to force businesses, social service agencies, school districts and others to carry the load. But the $8.75 billion figure could not pass political muster at a time when lawmakers had just raised income taxes and were attempting to craft a state budget that put a lid on spending.
In the meantime, the Greater Springfield Chamber of Commerce has proposed a more modest plan that calls for bonding of $6.1 billion over four years to get overdue bills paid. The Chamber’s figure is less than Quinn’s proposal because it believes the $8.75 billion figure included inter-fund borrowing that should not be resolved through bonding. The Chamber’s plan also assumes the state will cap its expenses at the fiscal year 2011 figure of $32.8 billion.
Why do we bring this up now? Because we believe it is important that, as budget negotiations heat up over the next three weeks, lawmakers and the public must be aware of the damage to the state economy as businesses and other entities struggle while waiting for money they are owed by the state. In this case, opposing borrowing for the sake of opposing borrowing makes no sense economically. It punishes those who have been forced to the brink of desperation by a deadbeat government.
Getting these bills paid quickly will be a true economic stimulus for the state. Containing state spending for the next four years will ensure the state doesn’t end up in the same situation again.
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