SENATE COMMITEE APPROVES MENDOZA'S PLAN TO SHORE UP ILLINOIS' RAINY DAY FUND
SPRINGFIELD – A committee of state senators today unanimously approved Comptroller Susana Mendoza’s measure to shore up Illinois’ rainy day fund.
As Illinois continues to make progress toward paying down its backlog of unpaid bills, Mendoza and State Sen. Heather Steans (D-Chicago) proposed the plan to put more money toward the rainy day fund while not losing sight of the unpaid bills at a time when the state is drowning in debt.
Illinois is one of just a few states with no sizable amount of money in its rainy day fund. Ratings agencies view rainy day funds as an indicator of states’ credit worthiness. A better credit rating means taxpayers pay less when the state borrows.
Currently, the state’s Budget Stabilization Fund, commonly referred to as the rainy day fund, contains about $60,000 – not even enough to cover 30 seconds worth of operating expenses for the State of Illinois.
Mendoza and Steans proposed legislation to trigger automatic monthly transfers into the Budget Stabilization Fund and the Pension Stabilization Fund when the state’s bill backlog is less than $3 billion, which means the state has caught up to the 30-day bill payment cycle.
“This plan would allow the Comptroller’s office to continue focusing on paying down the bill backlog while also planning for future economic downturns,” Mendoza said. “It’s the fiscally responsible thing to do. Shoring up our rainy day fund also gives the bond markets additional evidence that we’re working hard to turn around Illinois.”
Gov. JB Pritzker saluted Mendoza and Steans for their work on the legislation during his budget address earlier Wednesday, saying, “In concert with Senator Heather Steans, who is one of the General Assembly’s most responsible budgeteers, Comptroller Susana Mendoza recently proposed legislation that will create mandatory annual contributions to the Rainy Day Fund – a great step to improve fiscal protection for Illinois’ future.”
The Senate State Government Committee approved Senate Bill 2554, which now will go to the full Senate for approval. Steans sponsors the bill in the Senate. State Rep. Mike Halpin (D-Rock Island) is the House sponsor.
“I’m glad to be working with Comptroller Mendoza to strengthen our rainy day fund,” Steans said. “We need to pay down the state’s backlog of unpaid bills while still preparing for any future economic hardship. The unpaid bill backlog is an embarrassment for Illinois and harms the entities with whom the state does business.”