ILLINOIS (KFVS) - More than one month ago, the General Assembly authorized Illinois Governor Rauner to offer up to $6 billion in General Obligation bonds. These bonds would allow the state to lower the interest rate it pays on its debt.
The bonding will be used begin tackling the state's bill backlog, which reached a record peak of $15.4 billion in June. This will give relief to providers and businesses awaiting payment from the state. Over the past two years without a budget, they have had to exhaust their lines of credit, lay off employees and, in some cases, turn away Illinois citizens in need of services.
"Approximately 90% of our mental health and addiction treatment providers' bills have gone unpaid over the last 12 months," Sarah Howe, CEO of the Illinois Association for Behavioral Health, said. "We strongly urge Governor Rauner to move forward on the authorized bonding to pay for services for which the state is obligated to pay under contracts that the governor's Department of Human Services signed. This action would help bring stability to a system faced with potential closures."
According to a release from the Office of Comptroller Mendoza, the interest rate is up to 12 percent a year. The office said for every day the Governor does not make moves to put together the bond issue, Illinois taxpayers pay $2 million a day in late payment interest penalties.
Comptroller Mendoza sent a letter to the Governor's Office of Management and Budget, seeking to discuss getting started on the bond issue soon after the General Assembly voted to override the Governor's budget veto July 6.
"Since the budget impasse has ended, many people believe human service providers' financial woes are over," Sherrie Crabb, Executive Director of Family Counseling Center in Vienna, said. "This couldn't be further from the truth. The fact remains that human service providers, like Family Counseling Center, are still owed hundreds, and some even millions, of dollars. Agencies like ours have had to reduce programming, cut employee jobs and benefits, and some have even closed their doors."
The Comptroller's office staff met with the budget office Friday, July 14. According to the office, no timetable for a bond offering was provided.
A follow up letter was sent to the Governor on Friday, July 28, that received no response. It will take several weeks to put the bond deal together and the longer the wait, the more taxpayers will pay in higher interest rates.
Comptroller Mendoza released a video Monday morning on August 7 to help familiarize Illinois citizens with the importance of refinancing the state's debt through a bond offering.
"You should know that this debt is costing you, the taxpayer, $2 million dollars a day, at up to 12% interest in late payment interest penalties. 12%. That's brutal," Comptroller Mendoza said on the video. "But just like you at home, if you had the opportunity to refinance your debt at a lower interest rate, and save money, you would. People do it all the time with their home mortgages. That's just common sense."