Because Illinois has a $2 billion budget deficit caused by the
national recession and an uneven revenue stream, the state sold $1.4
billion in general obligation certificates to infuse the General
Revenue Fund with much-needed cash to pay vendors and providers who
urgently need payment.
"I am pleased to announce that the state will be able to pay many
community organizations that have provided goods and services to
Illinoisans and need to be paid," Blagojevich said. "For example,
without urgent payment from this borrowing, many providers who care
for Illinois' seniors would have to turn seniors away. When the
state doesn't pay its vendors, those vendors struggle to pay their
employees. Thanks to the short-term borrowing deal completed today,
we have $1.4 billion available to pay many of these organizations."
Statewide, community organizations have been waiting for payment
by the state. These organizations have provided services like health
care, child care and senior home care, and goods like food for state
veterans homes and prisons. Several organizations that assist
seniors contacted the state to convey that if the short-term
borrowing did not go through and they were not paid, they would no
longer be able to provide these services.
"The money that is being made available by the state will provide
direct assistance to those who desperately need it," commented Pat
Comstock, executive director of Healthcare Council of Illinois,
which represents long-term care facilities throughout the state.
"Without this support, many community organizations would no longer
be able to provide critical services to Illinoisans during a time
when it is needed the most. The great thing about this is providers
of all types -- hospitals, nursing homes, home service providers,
and those that serve children and the homeless -- will get help."
[to top of second column]
The offices of the governor, comptroller, treasurer and attorney
general worked together on this short-term borrowing transaction,
which will immediately put cash into the state's accounts so that
the comptroller can pay bills more quickly.
In addition to the state receiving less revenue than the budget
projected, the state also has an uneven cash flow. This means that
more dollars will come into the state during March, April and May.
The short-term borrowing will allow the state to pay many bills now
that have been pending, rather than waiting for this spring when
additional money comes in. While short-term borrowing will not solve
the budget deficit, the state needs to pay vendors and manage the
uneven cash flow.
In May 2003, the state borrowed $1.5 billion to pay Medicaid
assistance, medical providers of long-term care, the refund fund and
state aid payments to K-12 schools. Short-term borrowing has been
used in other years since to manage cash flow and ensure the state's
payment obligations are met in a timely manner.
Illinois is not alone in facing a fiscal 2009 budget shortfall
due to lower-than-projected revenues. At a recent meeting with
President-elect Barack Obama and the nation's governors,
Pennsylvania Gov. Ed Rendell, chairman of the National Governors
Association, said 43 of 50 states currently face budget deficits.
[Text from file received from
Illinois Office of
Communication and Information]