Just because some state officials want to jump off a financial cliff by trying to borrow their way out of the financial debacle in which Illinois is mired, university leaders shouldn’t hold hands and join them.
The desperation of universities is understandable as they wait — wait and wait — for money owed to them by the state.
But the state would be doing the universities no favors by authorizing them to borrow up to 75 percent of their payrolls to pay bills through Aug. 31 in anticipation of receiving money owed to them by the state, as called for in pending legislation, Senate Bill 416.
The borrowed money would have to be repaid with interest. We doubt the state will cover those interest costs. In fact, at this point, we doubt the state will even pay everything it owes to the universities.
Illinois State University is owed more than $50 million. A university spokesman said the school doesn’t think it will need to borrow money — unless the state financial situation gets worse.
Meanwhile, other universities are already in dire straits. Southern Illinois University, which barely made payroll in December, is worried about having enough money for its March payroll.
But borrowing money without a solid plan for repayment — whether the money is borrowed by the state, universities or individuals — will make financial problems worse, not better.
If the governor and Legislature really want to help the universities, then they should get serious about addressing the state’s financial problems and pay what’s owed.
There’s more to SB 416 than just the authorization for universities to borrow money. It also would allow Gov. Pat Quinn to borrow up to $250 million for Medicaid expenses.
Usually, such short-term borrowing would require approval of the comptroller and treasurer; this bill circumvents that.
Why? Probably because Comptroller Dan Hynes blocked a previous attempt because it didn’t include a viable plan for repaying the money — and this proposal is no better.
At the time, Quinn and Hynes were locked in a primary battle for the Democratic nomination for governor. Quinn’s supporters attempted to paint Hynes’ refusal as politics. Well, the primary election is over and Quinn won. But Hynes apparently is sticking to his guns or else Quinn wouldn’t need this legislation.
The sooner the state quits acting like the person who thinks there’s still money in his account because there are checks in his checkbook, the better all of us will be.