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“Borrow and Spend Not Fixing State’s Problems

Watson: “State can’t afford to meet its current debt!”

Jacksonville, IL… State Representative Jim Watson (R-Jacksonville) said the Democrats in the General Assembly this week robbed another $1.1 billion from the public pension systems in the new state budget and are spending taxpayer money as though they won the lottery.  The new state budget approved over strong objections from House Republicans includes $1.4 billion in new spending for Democrats pet projects and programs.  “The governor’s borrow and spend policy is simply not fixing the financial problems facing the state,” said Watson.  “His need for short-term fixes that produce glowing headlines is simply putting this financial burden off.”

Meanwhile, the state can’t afford to meet its current obligations and is expected to end the fiscal year owing around $2 billion to nursing homes, pharmacists, and others who care for the sick and disabled.  “Some of these providers have been waiting six months for reimbursement for services they have already provided to their clients” Watson said.   “The state’s inability to pay its bills has forced some of these care givers out of business while others are forced to turn away Medicaid patients.” 

Pointing to the fact that the state is only entering the second year of the Democrat’s five year $3.5 billion pension raid, Watson said the state’s financial outlook is dimming and failing to meet our pension obligations will only have dire consequences.

As expected the pension systems are being forced to sell off assets to make up for the missed payments and a New York bond ratings agency, Fitch Ratings, recently gave Illinois a “negative outlook” due to our state pension funding problems.  They predict Illinois’ bond rating will drop next year.  “This is not good news” Watson added.  “The state’s bond rating is very similar to your personal credit rating.  It’s used by lenders to determine if they will loan money to the state, and, if so, how much they will charge in interest.   The state’s negative rating is going to make any future borrowing a lot more expensive.” 

Virtually all of the Democrats’ initiatives have been financed through borrowing.  Over the past three years, all of the Democrat’s new programs and new spending have been paid for by raiding pensions and increasing bond debt.  In fact, Illinois’ General Obligation Bond debt has nearly tripled from $7.6 billion to $20.3 billion in three years.  This year taxpayers will pay $1.68 billion just to make the payment on this debt.  “That’s a lot of money we could be spending in our classrooms and paying our Medicaid bills” said Watson.  “ In addition to paying off our bonds, the $3.5 billion pension raid will cost Illinois families $38.5 billion to repay, that’s $3,500 for every man, woman and child in Illinois.   It is clear that the Democrats running this state simply refuse to live within our means.” 

The Jacksonville Republican said there were better alternatives. He pointed to the House Republican proposal of passing a budget that would rein in spending and borrowing.  “We anticipate $900 million in new state revenues this year.  With that money we could have begun to pay down our debt and get our pension payments back on track” Watson said.  “It is irresponsible to create new programs until we are able to meet our current obligations. Unfortunately, the actions of the Democrats and the debt they have created will be felt by Illinoisans for generations to come.”

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