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Wednesday, November 13, 2019

GOP Congressional candidate analyzes 'No Budget, No Pay' conundrum

Local Government

By Hoang Tran | Aug 19, 2016

Election

State Rep. Robert Martwick of Chicago set off a firestorm of controversy when he commented on State Rep. Jaime Andrade, of the 40th District, working for Uber as a means to support his family due to a delay of payments to lawmakers by Illinois State Comptroller Leslie Munger because the budget impasse.

Martwick stated that the denial of payment to lawmakers is “extortion and corruption,” claiming that it is a move by Gov. Bruce Rauner and his party to force a vote.


Munger recently announced a "No Budget, No Pay" bill that proposes that lawmakers will not get paid unless they pass a budget.

 

Many have called out Martwick for his comments, alleging that he is far removed from the residents of Illinois who are still struggling to find employment in a state that is losing jobs and businesses at an alarming rate. Vincent Kolber, Republican candidate for Illinois' 5th Congressional District, said he believes that the situation is a little more nuanced than who is getting paid and who isn’t.

 

“There are two level of this situation,” Kolber said. “One is the actual nonpayment of the state Reps and state Senators and what that means to the state of Illinois. And then [the other level is] their reactions and who is reacting."

 

Kolber, founder of investment management company RESIDCO, explained that the situation is the result of the state’s financial predicament.

 

“Let’s deal with the broad question first — the big issue — and that is why they are not being paid,” Kolber said. “The state of Illinois is spending more money than it is taking in and it owes more than it owns. It’s spending $5 billion or more a year consistently than it is taking in. It owes well more than a $100 billion — possibly as high $200 billion — more than it has in assets. So it’s in a sinkhole situation.”

 

Kolber asserted that Illinois is in bankruptcy.

 

“I believe it is true economic bankruptcy,” he said. “That is the state of Illinois right now. You can argue that if it still has access to debt markets [then] it’s not bankrupt yet but, by all accounts, it’s heading towards that direction if it isn’t there today. When you’re in that situation and you’re a financial officer and you’re in state government, such as [Comptroller] Leslie Munger, you get to decide who gets paid and who doesn’t. That’s the fact of the matter and it’s perfectly legal and it’s perfectly transparent.”

 

Kolber insisted that Martwick’s comment has no basis and the state has every legal right to do what it is doing.

 

“State Rep. Martwick calling it out is the classic case of the pot calling the kettle black,” Kolber said. “That is what it is. There couldn’t be anything more transparent and straightforward for our state controller to take the action that she has taken.”

 

While Munger has every legal footing to withhold payment due to the budget impasse, Kolber said that could change if the state had access to federal bankruptcy courts which would change its legal recourse.

 

“Now, having said that, the larger issue is if the state of Illinois is able to go legally bankrupt,” Kolber said. “The answer to that is no. It is economically bankrupt but not legally bankrupt. What I mean is, any state of the United States of America does not have access to federal judges the same way as, for example, a United Airlines or an American Airlines or a Delta Air Lines or a Rock Island Railroad or a Milwaukee Railroad  — when these big corporations are in a similar circumstance.”

 

Kolber concluded that because the state doesn’t have access to federal courts, which would give it a federal referee in the form of a judge, it doesn’t have a legal process for making payments to its employees. Comptroller Munger and Gov. Rauner have not done anything illegal despite Martwick’s accusations.  

 

“If it had a legal process that it could avail itself to, then there are rules and there would be a federal referee,” Kolber said. “And the rules in federal bankruptcy court actually require that employees get paid before others get paid. They are very high up in the priorities of payment. But this is not the case here. So the governor and the controller are absolutely on solid legal ground.”

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