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September 07, 2017 at 04:38 AM
Illinois officials are pushing Gov. Bruce Rauner to sell bonds to pay bills left from the state’s record budget impasse, saying it would reduce steep interest penalties of as much as $2 million a day.
The spending package that the legislature enacted two months ago over Rauner’s veto authorized the state to issue as much as $6 billion of securities to cover bills that accumulated during a unprecedented two-year standoff over the budget.
(Related: Illinois Rushes to Enact Budget as Threat of Junk Rating Looms)
On Tuesday, Sen. Donne Trotter, a Democrat, urged Rauner, a Republican, to sell the debt to pay health care providers and other state contractors that have had to lay off staff and borrow because they’re waiting to be paid. Comptroller Susana Mendoza has also called for the governor to sell the bonds.
“We remain in a political and fiscal crisis,” Trotter said during a press conference in Chicago on Tuesday.
Illinois could save money if it borrows to pay down the unpaid bills, some of which are accumulating as much as 12% interest, S&P Global Ratings said in a report last month. In the meantime, the state is paying about $2 million a day in interest on about $5.5 billion of unpaid bills that were more than 90 days old as of June 30, according to a memo from the Commission on Governor Forecasting and Accountability, which cited the state comptroller’s office.
Elizabeth Tomev, a spokeswoman for Rauner, didn’t immediately have a comment on Trotter’s call to issue the bonds. Trotter is a sponsor of the budget implementation bill that extended the state the borrowing authority.
