It’s been two months since Illinois government finally passed a full budget. Legislators hoped that would accelerate the payment of overdue bills, which total more than $15 billion. But the governor’s office is holding that up.
The math seems pretty simple: Illinois is paying interest penalties of 12 percent on some debt. But like refinancing a home mortgage, the state could pay that off sooner by issuing general obligation bonds at a rate closer to 4 percent, saving hundreds of millions of dollars.
Gov. Bruce Rauner, however, doesn’t seem to like that idea.
“Just more borrowing — in and of itself, without a plan for repayment — would be a huge mistake,” Rauner said last week when I asked him about the issue.
So far the governor isn’t offering any ideas for such a plan, and his office did not respond to a request for clarification. General obligation bonds do not require a revenue stream — the state promises to pay them off using its full faith, credit and taxing power.
All that has legislators wondering: What's the hold up?
“What do we have to do?” Sen. Donne Trotter, D-Chicago, asked Tuesday at a news conference. “Where must we start to deal (with) and address (the) situation that remains here in the state of Illinois?”
Trotter says waiting to issue bonds is costing taxpayers an extra $2 million dollars a day.
“We remain in a political and fiscal crisis,” he says, “because of the inaction of a reticent governor, who continually remains silent, primarily through his abrogation of duty on the budget."