Wednesday, June 23, 2021
“Fitch Ratings Agency’s change of outlook on Illinois’ finances from negative to positive vindicates the responsible approach my office has taken in paying down the backlog of bills from $16.7 billion in 2017 to $3.4 billion today,” Comptroller Susana A. Mendoza said. “My administration has been committed and vocal about the need to show fiscal discipline and accountability. Fitch notes the responsible approach we have taken with the General Assembly and the Governor’s office to target better-than-expected revenues to paying down debt.”
Fitch cited numbers the Comptroller’s office issues in monthly reports as a result of Comptroller Mendoza’s signature “Debt Transparency Act” (DTA) that gives state policy-makers, legislators and citizens a more comprehensive accounting of the state’s debts, including progress made in paying down late payment interest penalties run up under the previous administration.
“We are extraordinarily pleased with our hard work since passing the DTA, which allowed me to methodically tackle paying down the bill backlog quickly and effectively over the last four years,” Mendoza said. “We have been keeping the rating agencies appraised of our progress and we look forward to improved credit ratings for Illinois in the near future. In the meantime, this sends a powerful signal to the financial community that Illinois remains a good investment.”
Please note that these improved outlooks from all three ratings agencies happened before any of the federal ARP stimulus money has arrived. That will only improve Illinois’ financial standing.
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From Fitch’s report:
“Accounts payable, which the state has built up as a cash flow management tool since the Global Financial Crisis, have trended lower recently with the pace of repayment accelerating this calendar year as revenue growth outpaced projections. As of May 31, the Comptroller reported an approximately $4 billion general funds bill backlog and a 12-month moving average (to adjust for seasonality) of $6.1 billion per the Debt Transparency Act (DTA) reports. This is down 14% from the pre-pandemic (February 2020) 12-month moving average of $7.1 billion. The May DTA report also notes $191 million in reported pending late payment interest penalties, down 40% from February 2020 ($319 million) and down 78% from the first DTA report from December 2017 ($887 million).”
