CHICAGO — Illinois lawmakers return to work Monday to wrap up a lame-duck session that could see votes on a huge borrowing proposal, an income tax increase, and a casino expansion plan that would be the largest in the state's history.
Democratic Gov. Pat Quinn has floated the idea of borrowing as much as $15 billion to pay down late bills and cover other costs.
That proposal and other measures are all aimed at bringing down a deficit that could be as high as $15 billion heading into fiscal 2012.
Lawmakers largely avoided taking up the bills last year before November's election and during the annual fall veto session.
Quinn's debt proposal faces significant hurdles as full Democratic support and some Republican support would be needed to achieve the three-fifths majority always necessary for any state borrowing.
A plan pushed by Quinn last fall to sell $3.8 billion of eight-year general obligation bonds to cover the state's fiscal 2011 pension payment failed to gain legislative support. Lawmakers could take up that proposal again this week.
A Quinn spokesman would not provide details of the massive new borrowing plan, saying only that the newly elected governor is pursuing a number of options — including "responsible borrowing" — to stabilize the state's rocky fiscal position.
Illinois owes more than $8 billion in unpaid bills.
A delay into mid-January when a new General Assembly convenes would make it harder to win passage. Several Democrats lost their Senate and House seats.
The state sold $3.5 billion of five-year GO notes to cover much of its fiscal 2010 pension payment. The state's mammoth unfunded pension liabilities of $62.4 billion and its reliance on borrowing to cover the fiscal 2010 payments are factors that contributed to a series of rating downgrades that have hit the state.
The state's credit could slide further if lawmakers do not take steps to chip away at the budget's structural problems.
Moody's Investors Service rates Illinois' $25 billion of general obligation bonds A1 with a negative outlook. Fitch Ratings rates them A, with longer-term negative outlooks. Standard & Poor's rates the state A-plus, but has it on short-term negative watch for a downgrade.
Lame-duck lawmakers could also take up Quinn's proposal for a 1% income tax increase, which would boost the state's flat rate to 4% from 3%. If passed, the measure could raise more than $3 billion in new money annually, according to the governor's office.
A measure that would green-light the largest gaming expansion in the state's history could also be taken up this week. The Senate during its fall lame-duck session passed a casino bill that would authorize four new riverboat casinos across the state and one new land-based facility in Chicago. The measure also allows additional slot machines at horse-racing tracks.
The measure now needs to gain approval from the House and from Quinn, who has been cool toward expanding gambling in the state.
