Illinois State Treasurer Michael Frerichs
Illinois State Treasurer Mike Frerichs on Wednesday said “politics” has kept the state from passing a budget even though the fiscal year is halfway done.
He said lawmakers and Republican Gov. Bruce Rauner need to put those politics aside and come to an agreement.
“I wish I had a greater role” in the process, Frerichs, a Democrat from Champaign, told the News-Democrat.
While the treasurer’s office invests state money, it has no formal role in passing a budget. But Frerichs said that hasn’t stopped him from urging lawmakers and Republican Gov. Bruce Rauner to come to a deal.
One problem Frerichs highlighted was the state’s decision to reneg on handing out Monetary Assistance Program grants to college students because there was no budget in place. To him, a deal’s a deal, and the 130,000 students who were told they would receive grants should not have been left high and dry.
“It’s really wrong. We’ve sent letters to these students promising, ‘We’ve got money for you. It’s there.’ And then yank it out in the middle of the school year,” he said. “If we find in January there’s no budget in place, and there’s no MAP grant money coming this year, there’ll be a lot of colleges in the state that say, ‘Sorry, you have to come up with that money yourself.’”
Locally, Southern Illinois University Edwardsville came up with a temporary solution: Letting the 2,900 students who would receive those grants come to class anyway, confident the state will reimburse them once there’s a budget.
But Frerichs said at schools without such a solution, students who rely on those grants could cancel their plans to attend college. If they don’t go to college, they enter the workforce without a degree, earning lower pay. “We do better with a better-educated workforce,” he said.
As the state’s chief investment officer, Frerichs also has warned lawmakers and Rauner that the lack of a budget means he’s unable to plan long term investments of the state’s cash. “There’s less money, there’s more uncertainty,” he said. “Instead of putting in two-year investments, we may put in two-month investments.”
“I’ve tried to sound the alarm and said this isn’t going to break the bank but when you don’t have a budget in place, and when we’re not able to manage the money like we have in the past, less interest is going to come into the state,” Frerichs added. “And when less interest comes in, we need to fill that with deeper cuts or greater tax increases.”