Quinn floats $15 billion debt recovery plan

[The Northerner]

Illinois House mulls options for income tax increase

As the state's stack of unpaid bills grows, Gov. Pat Quinn is floating the idea of borrowing roughly $15 billion to alleviate the pressure, though taxpayers would be saddled with loan payments for years.

The governor has approached several lawmakers with a plan he's dubbed a "debt bond." While the name is somewhat redundant, the thinking is the state can pay back what it owes and plug its big budget hole — if only for a year.

Supporters say the outsize loan would provide instant cash to schools, doctors and social welfare agencies that have laid off workers and cut services as they await long-overdue payments.

They also argue the approach will prove cheaper for the state in the long run because Illinois will pay less in interest through Wall Street than it's now paying to providers as a penalty for falling behind. Those the state owes now get 1 to 2 percent in interest for each month payments are late after the first 60 days.

"That sounds like a lot of money to borrow, but we already owe that money," said Rep. Lou Lang, D-Skokie. "So I don't think people should get too hot and bothered to borrow the money to pay the people we owe. As long as we have a revenue stream to pay it back, it sounds like a good policy to me."

Read more: http://articles.chicagotribune.com/2010-12-27/news/ct-met-governor-quinn-20101227_1_income-tax-tax-hike-pat-quinn

[shraby]

1. Kinda sounds like a family moving their credit card debt to

a new card to get rid of the old one.

[Yupster]

2. Yes, borrowing more money

when you are too far in debt doesn't sound like a stellar idea.

[phasma ex machina]

3. The powers-that-be play it day by day. The kick the can down the road one day at a time. nt