CHICAGO — Illinois Gov. Pat Quinn on Monday tapped his budget director David Vaught to lead the state’s economic development efforts and named senior adviser Jerry Stermer to serve as Vaught’s temporary replacement.
The changes were among a handful made as part of a reshuffling of top personnel. “David Vaught and Jerry Stermer are both proven leaders with innovative ideas to create jobs and economic growth,” Quinn said in a statement.
Vaught will serve as director of the Department of Commerce and Economic Opportunity. He fills a position vacated by Warren Ribley, whom Quinn late last week moved over to the struggling Illinois Medical District Commission.
“Warren is an expert on the many economic development tools the state has at its disposal, including the Illinois Medical District. The district is an extremely valuable economic engine in Illinois, employing tens of thousands of Illinois residents,” Quinn said in a statement. Ribley had served as director of the DECEO since 2009.
The state recently agreed to the commission’s request that a $4.5 million capital grant be diverted to cure a debt-service coverage default and ensure bondholders receive full payment later this year on $40 million of state moral obligation-backed bonds. The debt was sold in 2006 to help support the 70-year-old commission’s massive city-, county- and state-supported expansion of its campus on the near-west side of Chicago.
Vaught, an attorney and former financial analyst, took over the state’s books in 2009 after Quinn took office. His appointment must win Senate approval. Stermer will take over as temporary director of the Office of Management and Budget.
He served as the governor’s chief of staff until 2010 and more recently worked as a senior adviser and lead on a Quinn-appointed working group on pension reform. He will manage the task of working with lawmakers on a fiscal 2013 budget and winning legislative support to address several pressing fiscal challenges.
Stermer “will lead the administration’s budget negotiations with the General Assembly and continue the governor’s work to stabilize pensions and restructure the state’s Medicaid program, which are both leading priorities for Gov. Quinn this year,” a statement read.
Quinn earlier this year unveiled a $33.9 billion fiscal 2013 general fund budget that holds spending in check through layoffs and state facility closures while leaving billions in unpaid bills. He devoted a significant portion of his budget address to the need to tackle Medicaid and pension reforms to stabilize the struggling state’s fiscal house.
The Democratic governor offered only ideas on how to achieve the $2.7 billion in Medicaid cuts he said are needed to preserve the system. On pension reforms, again he offered only a series of measures. The state closed fiscal 2011 with $82.9 billion of unfunded pension obligations for a funded ratio of just 43.4%. The state is also grappling with an $8 billion backlog of unpaid bills expected by the close of the current fiscal year June 30.
Illinois’ $27 billion of general obligation bonds are rated A2 by Moody’s Investors Service with a stable outlook. Fitch Ratings rates the state A and stable while Standard & Poor’s assigns an A-plus and negative outlook.