Nov. 4 (Bloomberg) -- Illinois Democrat Pat Quinn, who became governor when Rod Blagojevich was impeached and ousted in 2009, will remain the state’s chief executive, the Associated Press says.
Republican Bill Brady, a state senator, won’t be able to overcome Quinn’s 19,400-vote lead from the Nov. 2 election, the news service reported after analyzing the results. Quinn led by 46.6 percent to 46.1 percent with all precincts counted, according to AP. Almost 3.7 million votes were cast.
Brady, who had said he wouldn’t concede until all votes were counted, was in Springfield, where the Senate was scheduled to consider a measure authorizing the state to borrow money to pay the state’s pension contribution.
Brady said yesterday that he would “wait for the results from local election officials.”
The state has not made an official statement on the tally. Quinn made no immediate comment.
Illinois faces a projected $13 billion deficit in the current fiscal year, according to Comptroller Daniel Hynes. By January, the estimated 2012 gap may be $15 billion, Hynes has said. Quinn, 61, a former lieutenant governor, has proposed boosting the state’s 3 percent income tax to 4 percent.
As Illinois faces its worst-ever fiscal crisis, the state’s unfunded pension liability is projected to reach at least $79 billion. Moody’s Investors Service gives Illinois general-obligation debt an A1 grade, ranking it with California as the nation’s lowest.
Quinn survived as other Democratic governors were swept out of office in the Nov. 2 election, as voters expressed dissatisfaction with the economy and many incumbents.
States have curbed spending, cut jobs and raised taxes to deal with what the National Conference of State Legislatures says is almost $84 billion in budget deficits this fiscal year, following the longest recession since the Great Depression. In Illinois, an unemployment rate that reached 11.5 percent in March helped make the economy and its effects on state finances major issues.
On Oct. 4, Hynes warned of “chaotic fiscal conditions” and projected that the pile of unpaid state bills would reach $8 billion by June 30, when the budget year ends. Illinois is “in the worst fiscal position in its history,” Hynes said in a July report.
Quinn proposed increasing the income-tax increase in January, which would add about $3 billion in revenue a year. Lawmakers declined to act on it. His budget director told Bloomberg News in July that the General Assembly would raise the rate to 5 percent after the election.
Out of Work
The road to economic recovery is partly blocked by unemployment. The state’s jobless rate hasn’t been less than 9 percent since February 2009, the month after Quinn took office. Individual income-tax revenue fell 7.7 percent to $8.51 billion in fiscal 2010, after dropping 11 percent in the previous year, according to figures posted on the comptroller’s website.
Balancing the budget and restoring the state’s pension funds to fiscal health will likely take more than a decade, according to Tom Johnson, president of the nonpartisan Taxpayers’ Federation of Illinois.
Illinois borrowed to cover its retirement plan contributions last year and hasn’t paid them this year. The Illinois State Board of Investments, which manages about 20 percent of funds held by the pension plans, is selling $80 million of assets a month to pay current benefits, according to William R. Atwood, its executive director.
Business leaders warned that because the state hasn’t funded its pension plans, it will run out of money to pay promised benefits before the end of the decade.
The state had $64 billion of assets to pay estimated liabilities of $126.4 billion, or less than half the amount needed for almost 723,000 workers, retirees and other beneficiaries, according to bond documents in June.
Quinn sought to borrow $3.7 billion by selling bonds to pay for the state’s current contribution, a plan that failed to pass the state Legislature. While Brady has criticized Quinn for his borrowing plans, he said on Oct. 5 that he would consider issuing $50 billion of bonds to cover the pension deficit.
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