Illinois could be on the hook for billions

January 28, 2011 4:41:03 PM PST
Governor Pat Quinn is appealing a ruling that declared the state's $31 billion capital improvement program unconstitutional.

In this Intelligence Report: Why the state will be on the hook for billions of dollars if Quinn loses the appeal.

A year-and-a-half ago when Governor Quinn signed that $31 billion public works funding bill, state officials used it as collateral to obtain several bonds, money that jump-started dozens of projects across Illinois.

More than $2 billion in bonds. It is cash that has already been paid out and money that the taxpayers will have to pay back to bond houses if the governor's unconstitutional funding sources remain closed off.

"You always have to have plan A and plan B," Gov. Quinn said.

This was the centerpiece of Quinn's plan A: the state's cut of video poker proceeds from across the state, along with tax hikes on liquor, candy, some soft drinks and personal grooming items.

When that legislation was ruled unconstitutional, this became his plan B: convincing the Illinois Supreme Court to reverse it.

But as Quinn waits for that decision, plan C concerns the $2.2 billion in bonds that have already been issued and paid out for road improvements, building projects and some unusual items such as repair work on a totem pole and a duck pond in a Chicago park.

If the Supreme Court rules against Quinn -- and his funding sources for the public works bill dry up -- then Palatine Republican Senator Matt Murphy says plan C will put the taxpayers on the hook to repay $2.2 billion in bonds already issued.

"Right now everybody is up in the air," Murphy said.

Attorney General Lisa Madigan filed a motion Friday afternoon with the state Supreme Court asking that the money continue flowing to projects as the case is considered.

Madigan said that if the Supreme Court does not issue an immediate order to restore funding, it will "wreak havoc on critical state operations and finances."