No, this isn’t an article about the money the U.S. Senate voted to spend without any source of revenue to pay for it.
It’s about the Illinois State Senate.
State universities have not been paid money promised in the state budget. It amounts to hundreds of millions of dollars.
The answers of Southern Illinois University, the University of Illinois and, I presume the others, is to ask for authority to borrow hundreds of millions of dollars.
Glad you asked.
The university are going to tell those lending the money that the State of Illinois will pay them back.
With the Illinois budget having been run into the ground by Democrats who have been in control since I ran for Governor in 2002 against Rod Blagojevich and Jim Ryan, what folks will be optimistic to think state government can repay what it did not pay in the first place.
Of course, the “responsible” Republicans and Democrats are just waiting until after the fall election to hike the income tax, what, 50% or the 67% Senate Democrats supported last year.
Take a look at the roll call of Senate Bill 642, the one passed last week to allow SIU to sell such bonds:
Locally, it shows McHenry County’s State Senator Pam Althoff voting, “Aye.”
The other county senator, Dan Duffy, voted, “No.” So did Chris Lauzen, the senator who represents Northern Kane County.
If SB 642 makes it through the legislative process and is signed into law, SIU will be able to borrow up to 75% of the money the state hasn’t paid.
Commenter “Joey” on AlestleLive.com put it well:
“This can be a dangerous move. If the university borrows money, eventually the lender would want to be paid back (with interest, most likely). If the state continues to fall behind and miss payments, then when it comes time to make payments, the university may not have the money to pay them back, forcing them to take money out of other funds, thus just deferring the problem instead of solving it.
“You should never borrow money unless you are certain you’ll be able to pay it back. Since the state is being useless when it comes to providing money it owes, the university likely will not be able to say, with certainty, that it can repay debts on loans.”