CHICAGO -- After 12 days without a fiscal 1994 budget, Gov. Jim Edgar of Illinois and legislative leaders agreed on a budget plan yesterday.
The Illinois General Assembly was set to begin voting on the spending plan for the fiscal year that began July 1 late yesterday afternoon, state officials said.
The Edgar administration has also proposed borrowing $900 million for cash-flow purposes in fiscal 1994 that does not need to be approved by the legislature.
Edgar said the borrowing would be strictly for cash-flow purposes to offset the fact the state spends more than it collects of its annual revenues in the first six months of the fiscal year. "It's not borrowing to balance the budget," the governor said.
The plan calls for issuing $900 million of general obligation certificates -- $600 million payable from the state's general revenue fund and $300 million payable from Medicaid assessment fees and federal matching Medicaid funds -- according to state officials.
The proposed short-term borrowing would have to be approved by the governor, the comptroller, and the treasurer under Illinois' Casual Deficits Act.
Jim Ofcarcik, special assistant to state Comptroller Dawn Clark Netsch, said Netsch will support the borrowing.
"Anytime anyone wants to borrow money to help us pay bills, we're for that borrowing," he explained, adding that the comptroller's office had a backlog of $234 million of unpaid fiscal 1993 bills yesterday.
Marj Halperin, state Treasurer Patrick Quinn's spokeswoman, said yesterday the treasurer had not received any information about the borrowing from the governor.
"[Quinn] will certainly take a look at the request and see how much the governor is asking for and how he plans to pay it back," she said.
Last year, Quinn initially balked at Edgar's plan to borrow $300 million for the state's general revenue fund last year in addition to a $600 million Medicaid assessment fee-backed, short-term borrowing, which the treasurer supported. Quinn later agreed to the general revenue fund borrowing after Edgar accelerated a state aid payments to schools. Both issues were sold competitively.
The latest budget agreement came nearly two weeks after Edgar and legislative leaders struck a tentative spending accord that unraveled shortly before the new fiscal year began.
The new pact mostly mirrors elements contained in the tentative agreement that would make a 10% income tax surcharge permanent, with $258.million of the revenues going to the state and $86 million going to local governments in fiscal 1994.
Chicago Public Schools, which face a $415 million budget deficit, and other school districts in the state would share $145 million in additional funding and receive an accelerated state aid payment of $227 million.
The state's cigarette tax would be increased by 14 cents a pack, and a 20% tax would be applied to other tobacco products to raise about $115 million for Medicaid. The legislature would place on the November 1994 ballot an advisory referendum on capping property taxes, according to the agreement.
Chicago Mayor Richard Daley's proposal for riverboat casinos was not included in the agreement. However, four city taxes worth $40 million annually to Chicago would be made permanent.
New elements of the agreement include $8 million more for welfare families and the 20-year extension of a 0.3-cent-per-gallon motor fuel tax for the state's underground storage tank program. The agreement calls for issuing $110 million of GO bonds to fund a backlog in claims related to the program.
Because the legislature is in overtime, a three-fifths vote is required to pass the budget.
