CHICAGO -- A group of Democratic legislators in Illinois has called on Gov. Jim Edgar to borrow money to pay off a backlog of state bills that reached $820 million at the end of November.

State Rep. Bill Edley, D-Macomb, a member of the so-called Downstate Democratic Caucus, said while the group was nut suggesting how much the state should borrow in the debt market, the administration should resort to issuing debt instead of borrowing from providers of goods and services who have been forced to wait more than 100 days to get paid by the state.

"If you're going to borrow, borrow from LaSalle Street or Wall Street, not Main Street," he said, referring to financial centers in Chicago and New York.

Yesterday, a spokesman for state Comptroller Dawn Clark Netsch said the comptroller was in favor of borrowing "at least $200 million" to make a dent in the backlog of bills.

"We're hearing more and more from providers that they're tapped out and at the end of their credit," said Jim Ofcarcik, the comptroller's special assistant.

But George Hovanec, the state's deputy budget director, said Illinois would not resort to more short-term cash-flow borrowing unless it could be sure the revenues would be available when the debt matures.

In August, the state sold $185 million of general obligation certificates that must be paid off by June 15, 1992. The proceeds were used to pay bills.

"We don't enjoy holding bills anymore than anyone else," Mr. Hovanec stated.

Todd Whitestone, a managing director at Standard & Poor's Corp., said the agency is monitoring how much money the state has on hand and that short-term borrowing at this time would "be of some concern."

Steve Hochman, a vice president and an assistant director of state ratings at Moody's Investors Service, said, "the relevant question is not whether the state should borrow short-term from its vendors or from Wall Street. The question is what is the state going to do to bring revenues and expenditures back into balance."

Mr. Edley said the 20 members of the caucus agreed that issuing debt, raising money from temporary revenue enhancements, or cutting the budget were more acceptable alternatives than forcing health care and other providers of state services to carry the state's debt burden.

Out of the three alternatives, the Edgar administration is leaning toward cutting the budget. So far this fiscal year, which began July 1, revenues have not kept up with the Bureau of the Budget's forecast. In October, the bureau reported an $83 million imbalance between revenues and expenditures during the first quarter of the fiscal year.

The bureau's report said the imbalance should be fixed by future revenues. Yesterday, Mr. Hovanac said tax collections in December, which is typically a good month for sales tax receipts, will not be enough to avoid cutting the state's budget.

"I think it's unlikely that December will give us the confidence to not take our [revenue estimates] down," Mr. Hovanec stated.

In October, the General Assembly's Economic and Fiscal Commission projected a $298 million short-fall in the state's $14.4 billion general fund budget by the end of the fiscal year. Ellen Feldhausen, a spokesman for the budget bureau, said an announcement from the governor on how to deal with the state's budget problems may be included in his Jan. 8 state of the state address.

Meanwhile, Mr. Edley said he would sponsor a bill during the General Assembly's spring session that would require the state to use generally accepted accounting principles to determine if its budget is balanced in accordance with the state constitution. Currently the state uses cash-based accounting, which showed Illinois ending fiscal 1991 with a $100 million balance in its general fund, while deferring almost $1 billion of spending until fiscal 1992.

Mr. Hovanec said the bureau has estimated the state ended fiscal 1991 with a negative balance of $1.2 billion under GAAP.

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