Rauner OK’s Borrowing Up To $6B To Pay Off Late Bills
Illinois could soon begin to tackle its massive pile of unpaid bills, thanks to a move Thursday by Governor Bruce Rauner. But Democrats are wondering: What took so long?
Rauner is moving ahead with a bond issue — borrowing about $6 billion — to immediately pay off various state vendors. The move should save Illinois hundreds of millions of dollars a year in late penalties.
Fiscal officials determined this week that more than of the debt is assessed a 12 percent late payment fee. But officials believe they could borrow at a rate of 6 percent or lower to pay off those bills.
Rauner says he’s going to look for other ways to cut spending in order to pay off the bonds being issued to pay the late bills.
Democrats, like State Rep. Greg Harris from Chicago, say they worry Rauner will target human service providers like he did during the budget stalemate.
“All his traditional targets — the epilepsy foundation, autism, teen reach, after-school programming, violence prevention — have not gotten contracts yet,” said Rauner.
Comptroller Susana Mendoza says the borrowing is not for new programs — it’s to pay money the state already agreed to spend on contractors who do work for the government.
"The state of Illinois has been borrowing against the will of the vendors over the last two years, and it’s time that we stop being deadbeats and get to work on paying them back", said Mendoza.
Mendoza praised Rauner's move, while also wondering why he waited two months to initiate the borrowing, after the Legislature included that authority for the governor in the state budget..
Rauner says he wants legislators back in Springfield this fall to work more on the budget and his economic agenda.