With budget problems climbing, Gov. Pat Quinn says he'll need to borrow another $1 billion soon to keep state government running this winter. Quinn emerged from a meeting Tuesday with legislative leaders saying he's looking at another short-term borrowing plan to keep up government's liquidity – having enough money to pay its bills – between November and February, when tax revenues are traditionally slowest.
With budget problems climbing and few immediate solutions, Gov. Pat Quinn says he'll need to borrow another $1 billion soon to keep state government running in the lean winter months.
Quinn emerged from a meeting Tuesday with legislative leaders saying he's looking at the third short-term borrowing plan in recent months to keep up government's liquidity –
having enough money to pay its bills – between November and February. That's when tax revenues are traditionally slowest.
"We have to have that just to have liquidity for the months of November and December, January and February," Quinn said of more borrowing.
The governor said he'll work with the comptroller and treasurer under an existing state law that allows him to borrow money in an emergency.
Carol Knowles, spokeswoman for Comptroller Dan Hynes, said the state borrowed $1 billion in May and another $1.25 billion in August. All that borrowing and the new borrowing – topping $3 billion – would have to be repaid by next summer.
Knowles and Scott Burnham, spokesman for Treasurer Alexi Giannoulias, said their offices have received no information from the governor's office about more borrowing.
"The treasurer has expressed his concerns about continuing to borrow as the state can ill afford to go further into debt," Burnham said.
Senate Minority Leader Christine Radogno, R-Lemont, and House Republican Leader Tom Cross said they weren't enthused by more borrowing but acknowledged lawmakers aren't involved in approving this.
"I think the borrowing is going to catch up to us real soon," said Cross, R-Oswego.
The extra borrowing continues a string of bad news for state finances. A major tax increase was rejected in the spring, and Quinn doesn't plan to push for that again until after the February primary election. Vendors keep waiting longer to get paid with an unpaid bill backlog now of $3.7 billion, Knowles said.
Quinn said state government got a low interest rate of about 1 percent on the last borrowing and could do well again.
"It's a cash-management device," Quinn said. "Illinois' appeal to the banks that want to lend money is pretty good, and we want to keep it that way."
That borrowing would be used to bump up the state's general fund, its main bank account.
Money from that account pays for all kinds of expenses, including the MAP grant college scholarship program. Lawmakers and Quinn recently approved filling a more than $200 million gap in that program but didn't specify how to pay for it.
Quinn said the borrowing could be used for MAP funding but said he's not concerned scholarships will be shorted.
"I'm very confident we'll have the money for the scholarships. That's not a matter that anybody's concerned about. It will be there and it will be paid for," Quinn said.
Radogno said it was clear in the meeting that the short-term borrowing would cover the extra MAP grant costs.
"We have committed to it and it has to be funded," Radogno said.
Leaders met in the governor's office for more than two hours Tuesday discussing their agenda for the final week of the veto session, which starts Wednesday and includes campaign finance reform.
Ryan Keith can be reached at (217) 788-1518 or email@example.com.