State Representative Avery Bourne (R-Raymond) commends the recent efforts by the Governor and Comptroller to approve and use proceeds from Illinois’ recent General Obligation bond sale to begin paying down a major portion of the state’s current $16.7 billion backlog. This move stops the clock on a mountain of interest payments accruing on Illinois’ late bills, some dating back to 2015.
“After years of fiscal mismanagement, it’s important that the state look realistically at our situation and assess what can be done,” said Bourne. She added, “The sale of bonds to stop the accrued interest is a step in the right direction. The next step is to control spending and look at how we as a state can grow our economy. Illinois can’t continue down the same failed path of unbalanced budget after unbalanced budget. We need planning and the stability that it brings.”
The Comptroller’s office estimates that the state owes $900 million in late payment interest penalties on its bill backlog. The bond sale effectively refinances future interest costs on the state’s existing debt, saving taxpayers billions of dollars over the next decade.
These payments will help to stop the bleeding of late payment interest penalties on this portion of the backlog. There is still a long, hard road ahead of us, but this is a vital first step toward smart planning for FY2019 and beyond.
In total, the Office of the Comptroller expects to receive about $6.48 billion in bond proceeds, including a $480 million premium from the sale on top of the $6 billion initially offered, an indicator of the strong market demand for the bonds.
Through the use of federal matching funds, it is expected this will turn a $6.48 billion bond offering into a nearly $9 billion investment which initially targets our state’s struggling healthcare system and medical providers, many of whom have had to turn to third parties for loans just to stay afloat.