Governor announces plan to pay down bill backlog
Governor Bruce Rauner announced a refinancing plan September 7 to pay down a portion of the state’s $15.4 billion bill backlog. While advocating for spending reforms and policies that will help the Illinois economy to grow and become more competitive, Governor Rauner acknowledged that the Illinois budget has been marked by deficit spending for many years, resulting in the state’s large backlog of unpaid bills.
Currently, a significant portion of the bill backlog is subject to late-payment interest penalties of up to 12 percent annually. By using a tool included in the Democrat majority’s budget, the state can pay struggling state vendors, and taxpayers will benefit from considerable savings. The Comptroller’s Office estimates the refinancing plan will save taxpayers $550 million to $650 million per year over the 12-year repayment schedule.
Senate Bill 42 requires the refinancing to be completed in 2017 and be applied to the bill backlog. The Administration will need the collaboration of the offices of the Comptroller and Attorney General to target payments to the high-cost bills – including Medicaid and Group Health Insurance.
The Governor noted his preferred path of balancing the budget without borrowing, but acknowledged “it’s better to have Wall Street carry our debt than Main Street Illinois.”