SPRINGFIELD, Ill. -- Gov. George Ryan will approve a plan that allows a $750 million state loan backed by the tobacco lawsuit settlement even though he has reservations about it, an aide said Wednesday.
Spokesman Dennis Culloton said Ryan will keep the option as a means of shoring up the state's bank account at the end of fiscal year that begins July 1.
Comptroller Dan Hynes issued a statement urging Ryan to reject the plan, which requires the $750 million loan be paid back, with interest, with $1.1 billion the state expects to receive from its share of the national lawsuit against tobacco companies. Hynes says borrowing money to pay day-to-day expenses such as state salaries is dangerous because it is not a constant revenue source.
"Using long-term debt to pay for government operations is like a family taking out a second mortgage to pay their grocery bills," Hynes said in a prepared statement. "Families wouldn't do that, nor should the state."
When the plan passed June 2, Ryan expressed doubts about using it to solve a $1.35 billion deficit. He has signed a $230 million cigarette tax increase into law, and is considering a $130 million increase in riverboat casino taxes, among other financial maneuvers.
"He, too, is wary of using the tobacco dollars to balance the budget," Culloton said. "However, he is open to using it as a tool to build up the end of year balance and the rainy day fund."