By Kevin Lee, Sng2@springnet1.com

SPRINGFIELD — The Illinois House returned on Monday and approved a borrowing plan to help reduce massive cuts expected for the state's human service groups.

Senate Bill 415, which passed in the House by a vote of 101-7, would let the state borrow $2.3 billion from the state's public employee pension systems to help avoid some of the proposed cuts to care providers. The bill now moves to the state Senate.

State Rep. Lisa Dugan, D-Bradley, said lawmakers were reluctant to turn to the pension systems for funding. The state has struggled to make its annual payment to the state's pensions as mandated by state law.

"We're trying to fix a problem that was caused 20 years ago by not funding the pension system, and now we're trying to catch up," said Rep. Dugan, who voted for the bill. "With the downfall in state revenue, we have to look at every possible way of funding."

The funds would come from a complex procedure whereby the state would make its payment to the public employee pensions by borrowing. The state would obtain the borrowed funds by giving IOUs to pension funds, which they can sell at a discount on Wall Street.

The IOUs would have to be paid back over five years at very low interest; ultimately the state would have to pay back $500 million each year, according to state Rep. Kevin McCarthy, D-Orland Park, sponsor of the bill.

State Rep. Pat Verschoore, D-Milan, said the pension borrowing would help fund service providers at 70 percent of last year's funding level, versus 50 percent if the bill does not pass.

"It's not going to help them out 100 percent. Service providers were not for that vote. I struggled with that vote because it didn't go far enough," he said. "But 70 percent is better than 50 percent."

Verschoore added an income tax increase would help provide a better solution for funding human care groups.

McCarthy said lawmakers were prepared to take other steps to help human service groups but did not specify how they would fill the looming budget shortfall, estimated to be $9.2 billion by Gov. Pat Quinn.

"This is not the total package," he said. "This is not going to eliminate all of the pain that's out there, but it is a step forward."

The providers, which aid groups such as children, seniors and the developmentally disabled, face massive potential cuts under a budget approved by lawmakers last month. Human service groups are preparing for the worst for July 1, when the next budget year begins.

On July 1, the state is not allowed to allocate funds to groups and agencies throughout the state without an operating budget. Some human service centers already have begun reducing manpower and services offered to prepare for scathing cuts, while others have prepared for outright closure.

While the bill passed overwhelmingly, some lawmakers expressed concern on how the borrowed funds would be disbursed if the bill becomes law. The bill does not specify which human service groups would benefit from the cash infusion, leaving many service providers in limbo.

"What we've asked the governor constantly is how he's going to spend this money," said state Rep. Careen Gordon, D-Morris, who voted in favor of the bill. "What we do know is that every dollar spent in these agencies is spent wisely. They do so much with so little that every dollar we spent is going to go toward helping people."

Related Stories Quinn won't sign partial budget Quinn vows to veto 'half-baked' Illinois budget