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Senate Week in Review: June 7-11, 2010 |
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 Illinois is now officially tied with California for the worst credit score in the nation, with the state’s bond rating lowered June 4 by Moody’s Investors Service, according to Senator Dale Risinger.
Also during the week, a number of bills were signed into law including legislation that would allow the state’s universities and community colleges to borrow money to help make ends meet, and a measure that seeks to improve travel between Illinois and Indiana.
In lowering Illinois' bond rating one notch to A1, Moody’s pointed to the state’s inability to address its financial problems, including an unbalanced budget, billions in unpaid bills and faltering revenues. Moody’s said the failure to tackle Illinois’ fiscal issues “underscores a chronic lack of political will that indicates further erosion of an already weak financial position.”
With the new rating, Illinois has now tied California for the worst credit rating in the nation from Moody’s. It’s also anticipated that the other two major credit rating agencies will soon downgrade Illinois. Senator Risinger explained that a lower state credit rating usually translates into higher costs when the state tries to borrow money.
Though the bond rating was lowered, Moody’s did note that Illinois possesses several “credit strengths,” including a strong ability to raise revenue and reduce expenditures. It also noted Illinois’ diverse economy with higher-than-average wealth levels is an asset.
However, Moody’s said the state’s reliance on delaying payments to vendors, Illinois’ extremely large unfunded long-term liabilities—including pensions and retiree health care—and its use of non-recurring resources to finance state spending, pose serious risks to the state’s rating.
Despite these issues, Moody’s highlighted progress in certain areas—specifically, a bipartisan pension reform measure that reduces benefits for new state employees. Moody’s also cited new revenue generators related to video gaming, vehicle fees and taxes on alcoholic beverages and other products, which will go to help finance debt related to the state’s capital improvement program.
Struggling to make payroll and meet their obligations, the state’s universities and community colleges will now be allowed to borrow cash to get by until the state comes through with the hundreds of millions of dollars owed to the institutions.
Senate Bill 642 authorizes public universities to short-term borrow up to 75 percent of what the state owes them for Fiscal Year 2010. The emergency loans must be repaid within one year, or within 10 days of the state’s reimbursement to the university. The short-term borrowing must be finalized within 90 days of the legislation being signed into law. Senate Bill 2615 doubles the amount community colleges can borrow from their working cash reserves in the form of bonds. It also allows the schools to establish a line of credit with a financial institution.
University and community college officials said that without the borrowing options they may not be able to make payroll and maintain facilities. They noted that having access to revenue will provide some fiscal stability, as the state’s late and erratic reimbursements make it difficult for school officials to plan.
Republican lawmakers were split on Senate Bill 642, and to a lesser degree Senate Bill 2615. Some saw the borrowing as just another attempt to avoid the tough decisions needed to bring spending in line with revenues. Others pointed out that the universities were borrowing against money that they will eventually receive, and compared it to other state vendors who have had to borrow to meet cash flow needs because of the state’s slow bill payment. They considered this different from the Governor’s efforts to borrow money to meet operating expenses with no clear plan for repaying the money.
 The Governor also signed legislation that will allow Illinois to move forward with the “Illiana Expressway”—a new route connecting I-55 in Illinois and I-65 in Indiana. Both the Illinois and Indiana legislatures advanced measures that will allow the states to enter into public-private agreements with private contractors who will develop, manage and construct the route.
Indiana and Illinois will work together on the project as it progresses. It is anticipated that construction and development of the Illiana Expressway will create thousands of short-term and long-term jobs, while also relieving congestion in the region.
Measures signed into law this week include:
Agencies Serving Older Persons (HB 5499/PA 96-0918): Deletes all reference to the Coordinating Committee of State Agencies Serving Older Persons, as this language is obsolete and no longer needed in the statute; requires the Department on Aging to give people who are no longer eligible for non-institutional services under the Community Care Program 45 days notice (rather than 60) prior to appeal to their termination; and states that the Department may (rather than must) develop materials targeting people ages 50 and older concerning HIV/AIDS and other sexually transmitted diseases.
Aging Adults Service Committee (HB 4910/PA 96-0916): Reduces the minimum required number of committee members of the Older Adult Services Advisory Committee from 32 to 30.
Child Protection (HB 4691/PA 96-0914): Increases penalties for drivers transporting a child passenger who fail to properly secure the child in the appropriate child restraint system.
EPA Water Loan Programs (HB 5226/PA 96-0917): Authorizes funds in two of the three special programs in the Water Revolving Fund to be used to make direct loans and provide subsidies for certain specified purposes: authorizes funds in the Loan Support Program to be used to finance water pollution control projects; authorizes funds in Public Water Supply Loan Program to be used to make direct loans and provide subsidies to eligible local government units and privately owned community water supplies for certain purposes; and authorizes moneys in the Water Pollution Control Loan Program and the Public Water Supply Loan Program to be used for certain projects that fulfill federal State Revolving Fund grant requirements for a green project reserve.
Highway Sign Maintenance (HB 5946/PA 96-0919): Clarifies what is considered erecting a highway sign, as opposed to maintaining a sign.
Illinois Homeowners Emergency Assistance Program (HB 2360/PA 96-0921): Authorizes the Illinois Housing Development Authority to issue grants up to $6,000 to assist qualified homeowners whose homes are being foreclosed because of lack of payment.
Monthly Grant Payments (SB 2548/PA 96-0911): Changes from quarterly to monthly when the Illinois Community College Board must certify, prepare, and submit vouchers to the State Comptroller for base operating grants and equalization grants to community college districts.
Procurement Reform Follow-Up (SB 3576/PA 96-0920): Makes various changes to the comprehensive procurement reform that passed in 2009, which will make the actual implementation of the reforms achievable. Exempts leases for properties that are less than 10,000 square feet and less than $100,000 annually from the Request for Information (RFI) procurement process.
Unnecessary Institutionalization (HB 4909/PA 96-0915): Repeals a provision requiring the Department on Aging and Department of Human Services to jointly establish an advisory committee for the Prevention of Unnecessary Institutionalization Program. |
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Contact information
Senator Risinger's e-mail
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Legislative offices
Peoria
5415 North University
Suite 105
Peoria, IL 61614
309-693-4921
309-693-4923 fax
Galesburg
4 Weinberg Arcade
Galesburg, IL 61401
309-343-8176
309-343-2683 fax
Princeton
400 N. Main St.
Princeton, IL 61356
815-872-1964
815-872-1965 fax
Springfield
M103F State Capitol
Springfield, IL 62706
217-782-1942
217-782-9586 fax
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