State Capitol, June 27 – Late on Tuesday afternoon, Speaker Madigan and Rep Greg Harris (D), unveiled their version of a state budget.
As Rep Fred Crespo told the Illinois Channel, they House Democrats used SB-6, the Senate Democrats budget, as the framework for the budget put forth by Speaker Madigan. Crespo said in an interview with the Illinois Channel, that about 85% of the House Budget, is the same as the Senate Democrats version.
One key difference, is the spending level, which is less in the House Democrats version. The House bill calls for spending $36.485 Billion. The Senate version matched the spending level called for by Gov Rauner, at $37.3 Billion.
It’s easy to get confused on the math the budget, but with a proposed income tax increase to 4.95%, which is expected to bring in new revenue of approximately $5 Billion, and a spending limit of $36.485, Rep Harris said his projections show a “slight surplus.”
On Wednesday, the House will consider several other bills, including one to borrow funds that would allow the state to payoff a good portion of the $15 Billion bill backlog.
The funds to payoff those bonds, would come – at least in part — from savings that would be realized between the 10-12% the state pays in interest on the late payments to vendors, and a lesser amount that the state would pay on a bond issue. For example, IF the state were to pay 6% on the bonds, they would realize a savings of at least 4% in interest payments. And depending on the size of the bond issue — that could save the state some hundreds of millions of dollars in interest payments.
The state could also realize some additional income. Once the state bonds the money to pay off the backlog of bills, included in that $15 Billion, is a sizable amount of money owed to pay Medicaid providers and hospitals. The payment of THOSE fees, would bring a match from the Federal government that could add over $1 Billion, or more, to the state’s treasury.
But we still don’t know if this deal with fly politically. Yet after so long a financial drought, and so much pain being inflicted across the state, due to unpaid bills….there’s an enormous amount of pressure being felt by lawmakers to get a budget deal done.