Taxpayer costs continue to grow from Rauner’s refusal to refinance debt
CHICAGO— S&P Global Ratings said Tuesday it supports fiscal policies outlined in recent weeks by Illinois Comptroller Susana Mendoza to pay down a state bill backlog of $14.9 billion.
Governor Bruce Rauner, under whom the bill backlog more than tripled, has demonstrated no progress on the steps necessary to refinance the debt via a bond sale.
Comptroller Mendoza said that the most troubling aspect of Rauner’s intransigence is the interest and late payment penalties on the debt that continue to pile up.
“Illinois taxpayers are accruing debt on our unpaid bills at a rate of $2 million a day. It is almost unreal to think that we are burning through tax dollars at such an incredible rate when our schools and other critical services are severely underfunded and hundreds of thousands of people and businesses are awaiting payment,” she said.
“Since the override of the Governor’s budget veto 46 days ago, I’ve been saying that refinancing is a critical fiscal tool. My office is making extensive use of all the tools at our disposal, such as inter-fund borrowing, to maximize every dollar on behalf of the taxpayers. Through careful cash management, we triaged an unprecedented statewide fiscal crisis, but we can’t create resources out of thin air. Ordinary people refinance their mortgages to get a better rate every day, but we have a Governor who is willing to rack up interest penalties and continue letting the state be a deadbeat when it comes to paying social services, schools and businesses.”
The bill backlog currently stands at $14.9 billion. The state owes vendors and other entities an estimated $800 million in late payment interest penalties. The Fiscal Year 2018 budget allows for the issuance of up to $6 billion in bonds to be used to pay the state’s bills. Comptroller Mendoza has formally asked the Governor to immediately begin the process of refinancing our debt. So far, he has refused to move forward on the bonding authority.
S&P said Tuesday in a five-page special report that foregoing an opportunity to allow for increased cash flow via refinancing state debt could result in “heightened vulnerability” for Illinois.