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Blagojevich calls Hynes budget warning ‘arbitrary'

Posted August 05, 2007 11:00 pm

Mike Ramsey

Gov. Rod Blagojevich on Monday rejected a constitutional officer's warning that a state budget must be in place within a couple of days to prevent financial hardships to state workers and schools, but his administration began offering loans to cash-strapped districts that may be getting skittish.

Illinois Comptroller Dan Hynes says without a temporary or full-year state budget by Wednesday, his office cannot process Aug. 15 paychecks for nearly 5,000 public employees nor make payments to school districts, vendors and providers.

Blagojevich called the purported deadline "arbitrary" and said Wednesday it is "no different from today, it's no different than yesterday, and it's no different from Aug. 9 (Thursday)."

Hynes, a fellow Chicago Democrat who appeared at a labor bill-signing the governor attended, disagreed.

"I think he is wrong," he told reporters moments later. "Tell that to the 4,900 state employees who aren't going to get their paycheck. I think they would disagree that (the Wednesday deadline) is artificial."

The last state budget expired June 30. Blagojevich and the lawmakers with whom he has been feuding approved a one-month budget to buy more time for negotiations, but that spending plan expired last week.

Hynes said his office typically pays $100 million in bills each day in August but cannot do so without a new budget. He said the 4,900 state employees in jeopardy of not getting paid Aug. 15 would be followed by many thousands more who are paid later in the month.

Also due Friday is state government's first installment of general aid payments to school districts across Illinois, said Matt Vanover, spokesman for the Illinois State Board of Education. He said the average installment payment for the state's nearly 900 districts was $170 million in the last fiscal year; the payments are made twice a month.

To allay concerns among local school officials, State School Superintendent Christopher Koch on Monday notified districts "in financial need" that the Illinois Finance Authority would make up to $175 million in no-interest loans available.

Financing costs would be paid by the next state budget, Koch wrote in a letter.

"I understand that this is an anxious time for many of you and thank you for your patience and understanding," he said. "I hope knowing that a plan is in place will ease the burden on your district as you prepare for the new school year."

Marc Kiehna, president of the Illinois Association of Regional Superintendents of Schools, said the administration's offer was welcome news. But he added that school districts negotiating with teachers' unions need to know the total funding picture for the upcoming school year.

"Every day that we go further and don't come to a budget agreement, it simply delays the negotiations for our teachers' contracts," Kiehna said. "Our superintendents get a little nervous when that happens."

Blagojevich is allied with Illinois Senate President Emil Jones, D-Chicago, but Jones and the three other legislative leaders have been conducting budget discussions without the governor.

Blagojevich initially proposed a massive health-care plan for uninsured adults and a business tax to pay for it, but the idea was rejected by the Illinois House. The governor indicated Monday he still wants a health-care component for the next state budget, as well as increases in education funding and a capital budget for infrastructure.

He has suggested lawmakers send him another interim budget, but legislators have said they prefer to hammer out a full-year spending plan.

Mike Ramsey can be reached at (312) 857-2323 or ghns-ramsey@sbcglobal.net.

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