Gov. Rauner to borrow up to $6B to pay off late bills

Gov. Bruce Rauner acknowledged Thursday that Illinois has no choice but to borrow up to $6 billion to tackle a financial crisis largely caused by excessive borrowing, reversing earlier declarations that the state with the nation’s worst credit rating wouldn’t take on more debt under his watch.

The Republican governor said in a statement that he changed his mind from statements this summer because the budget the Democrat-controlled Legislature approved in July over his veto is still not balanced, despite an income-tax hike. Included in that budget is a provision granting Rauner authority to borrow the money.

“My preferred solution has always been for state government to reform its spending, and for a strong, competitive economy to grow family incomes faster than the cost of government,” Rauner said. “We’re choosing to exercise borrowing authority because it’s better to have Wall Street carry our debt than Main Street Illinois.”

The Commission on Government Forecasting and Accountability, the Legislature’s bipartisan budget agency, determined last month that $5.5 billion of the debt is assessed a 12 percent annual late-payment interest fee. Despite Illinois’ low credit rating, the commission believes borrowing $6 billion would carry a 6.5 percent rate or less.

That means interest payments of no more than $2.5 billion over a 12-year repayment schedule for bonds compared with as much as $8 billion at the current rate.

Comptroller Susana Mendoza, the state’s check writer, said the action will mean an end to “pouring gasoline on a $2 million fire,” referring to the daily interest payments for which taxpayers are on the hook.

“It’s going to give me an opportunity to provide some immediate relief to many providers who have waited an unconscionable period of time to get paid for services they’ve already provided to the people of Illinois,” the Democrat said in a telephone interview.

The backlog tripled in size during a two-year standoff over an annual budget between Rauner and Democrats who control the Legislature. Rauner also called Thursday for lawmakers to return to Springfield this fall to help him fix shortfalls. Sen. Donne Trotter, a Democratic assistant majority leader from Chicago who sponsored the borrowing plan, said spending authority was added to allow Rauner to cut because lawmakers couldn’t get the governor’s Cabinet members to suggest spending reductions last spring.

A Utopian Death Spiral

Maybe they can get an epic wave of tourism to flood their economy with tons of money and balance out the little dilemma they have. smoke another one!

you know, they would waste that money too.
Corruption kills

is obama gunna loan it to them?

He should. He came out of that rat den.
Right now looks like he's got more money than they do.

and thats just what we know about... that cheeky grin means something...

Barrow money to pay bills? Sounds like a better idea than cutting your expenses, why worry about it today when you can put it off til tomorrow. Kind of like borrowing from Peter to pay Paul, but forgetting to pay Paul and going out and partying!!!

and you know it's a sad deal. It's really a beautiful state
with hard working people. Too bad they got snookered... and still are.

Illinois and especially Chicago are known for their corruption in politics,but where did the money really go? Obama seemed to do pretty good for himself while he was in Illinois,maybe a little too good? Maybe if people were working instead of shooting each other they would be better off!

So, nobody realizes that a state or nation shouldn't be able to spend more money than it has? Its income comes from its citezens and bussinesses, They know how much money they have, or do we have the wrong people in charge of the money?
I mean, if the money is not there, don't buy it.
Oh, your city wants a brand spankin new stadium? We don't have the money to build it, DO WITHOUT IT or RAISE THE MONEY FOR IT.
We have to close the state highways because there isn't enough money to fix the bridges. WHY?
Perhaps if more people asked why their bills would be paid.
A budget can do two things. Budget a finite income to have a surplus or budget to maintain debt.
Most people just do without to bring financial issues under control. If they borrow to pay interest on another debt, how is that smart?
Have a freakin yard sale!