Gov. Rauner announced a refinancing plan Sept. 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 Illinois’ economy to grow and become more competitive, Rauner acknowledged that Illinois has been in deficit spending for many years, resulting in the state’s large and growing unpaid bill backlog.
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 – which was called for in the Democrat majority’s FY18 budget package – will save taxpayers $550 to $650 million per year over the 12-year repayment schedule.
The Budget Implementation Act (BIMP) in 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.”