By Greg Bishop/Illinois Radio Network
CHICAGO – Illinois Treasurer Michael Frerichs wants Gov. Bruce Rauner to champion a budget Rauner says doesn’t address Illinois’ decades of fiscal problems.
After Democrats and some Republicans voted to override Rauner’s veto of the state’s largest annual budget to date and a 32 percent income tax increase, Treasurer Michael Frerichs said Rauner needs to embrace the change.
Among other things, Frerichs urged Rauner to talk to bond ratings agencies in New York and borrow $6 billion for some of the backlog of unpaid bills.
Frerichs said these steps will help the state avoid junk bond status.
“I believe that the governor is a very successful investor and as such he understands the danger of junk bond status,” Frerichs said.
Retired wealth investor Bob Gray said the tax hike might lead to more business and citizen flight from Illinois, and what the state really needs is to control spending.
“Until that happens I think it’s just going to continue the credit death spiral,” Gray said.
Bond rating agency Moody’s said last week that even with the tax hike and budget in place, the state risks junk status because of its unfunded pension liability, which tops $130 billion and is growing.
Rauner’s office said the budget is $2 billion out of balance and the 32 percent tax hike will not solve the problems created by decades of bad budgets and underfunded pension liabilities.
“The best thing we can do is to work collaboratively to pass truly balanced budgets that pay down our debt, reform our pension system, and make the changes necessary to drive economic growth in our state,” Rauner spokeswoman Eleni Demertzis said in a statement. “The Governor will continue to be a champion for the critical changes needed to get Illinois on a path to fiscal solvency.”
Frerichs also wants Rauner to approve an evidence-based school funding model as the budget requires.
“The governor must either declare that he will sign the model that the Legislature has accepted or that he will strike his own deal,” Frerichs said. “Absent him doing so, local grade schools and high schools from Cairo to Champaign to Chicago may not open, which would be a disaster for parents and students in this state.”
Republicans have said the Democrats’ school funding reform bill is a big Chicago bailout. The measure has passed both chambers but not been sent to Rauner.
