(Springfield, IL) — February 18, 2010. A chief Senate budget expert is proposing more debt to cope with the state’s current $13 billion deficit.
The measure sponsored by State Senator Donne Trotter (D-Chicago) would allow most state universities to borrow up to 75 percent of the amount owed to them by the state. The schools’ borrowing power expires on Aug. 31, and all loans must be re-paid within 18 months.
Trotter’s proposal would also allow the state to issue bonds for $250 million for the remainder of the fiscal year ending June 30 to reimburse hospitals, pharmacies and other health care providers serving Medicaid patients. Medicaid is the state/federal health care program for the poor and disabled.
Illinois gets a 50-50 match from the federal government for every dollar it spends on Medicaid.
This health care “relief fund” would pay Medicaid providers the enhanced federal match allowed under the federal stimulus program set to expire Dec. 31. All bonds must be repaid within a year.
The initiative passed a Senate committee on Wednesday by an 8-5 vote along party lines. Democrats supported the measure while GOP members opposed it. It now goes to the Senate floor for a vote.
Southern Illinois University President Glenn Poshard told the committee of the school’s dire straits, noting public universities statewide are making double digit percentage increases in tuition up to cope with the lack of revenue from late state payments. Poshard said SIU is now surviving on tuition alone. Some universities have implemented spending freezes and staff furlough days.
“We cannot afford to raise tuition again for these struggling families,” Poshard said. “We seek this authority only as a tool for responding to a worst case scenario that would threaten the future of our university.”
Republican senators objected to lumping the two distinct issues into the same proposal. State debt for specific purposes requires a three-fifths vote to pass the General Assembly, meaning Republicans have to be on board.
Senate Minority Leader Christine Radogno (R-Lemont) said she supports only the schools’ borrowing power.
“In my view, these are two separate issues,” Radogno said. “I am in favor of the university borrowing piece of it. I am not in favor of the Medicaid.”
State Senator Dale Righter (R-Mattoon) also supports giving public schools borrowing power, but told Trotter mixing the two issues would hurt the universities.
“By putting these two together, you’ve endangered the universities,” Righter said.
A borrowing plan for community colleges was introduced on Tuesday, but the sponsoring lawmaker pulled it from a committee discussion in order to garner more Republican votes.
–Ashley Badgley, Illinois Statehouse News