Comptroller says proposed budget could lead state to another credit
upgrade
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[February 03, 2022]
By GRACE KINNICUTT
Capitol News Illinois
gkinnicutt@capitolnewsillinois.com
SPRINGFIELD – Comptroller Susana Mendoza
said she expects the state’s credit rating to improve and the remaining
bill backlog reduced under Gov. JB Pritzker’s $45.4 billion proposed
budget.
Another credit rating upgrade would be noteworthy, as the state had gone
23 years without receiving such a vote of confidence from a ratings
agency at the time it was upgraded by Moody’s Investors Service in June
2021.
The state's unpaid bill backlog, which climbed to $16.7 billion during
the budget impasse between former Republican Gov. Bruce Rauner and
Democratic leaders of the General Assembly, now sits at about $2.9
billion.
That equates to the state paying its bills on a cycle of about 15 days,
whereas the oldest voucher at the height of the impasse was 500 days
old. That’s a fact Pritzker noted in his speech in which he specifically
credited Mendoza by name.
“Painstaking work has been done in coordination with the General
Assembly and Comptroller Susana Mendoza over the last three years to
diligently and meticulously reverse the irresponsible decisions of the
past and ensure that responsible budgeting would become the rule, not
the exception,” Pritzker said.
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Mendoza credited the governor for his attention to the backlog,
including allocating $898 million to pay down overdue health insurance
bills.
“Since (Pritzker) took office, he’s been a wonderful partner in helping
rewrite the state's fiscal ship and having the ability to really hone in
on paying down our debt as quickly as possible,” Mendoza said. “The bill
backlog will become just the normal cost of running a business.”
Mendoza said paying down the backlog avoids late payment interest that
totaled hundreds of millions of dollars annually at the height of the
impasse.
Mendoza succeeded Leslie Munger, a Republican appointed by Rauner, by
winning a special election in 2016.
The Democrat and former Chicago city clerk was a frequent critic of
Rauner, publicizing her lack of autonomy over state finances due to
consent decrees and court orders which mandated her to pay certain bills
with the state’s dwindling finances during the height of the impasse.
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Illinois Comptroller Susana Mendoza (Credit: ILGA.gov)
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She won reelection in 2018 and has continued to prioritize the timely
payment of bills.
“I don’t think anyone would have thought this was possible five years
ago,” Mendoza said of the proposed budget in a phone call with Capitol
News Illinois Wednesday. “We’ve made incredible strides, incredible
progress.”
She also praised the governor and state legislative leaders for paying
down $3.2 billion in pandemic-related borrowing early. In 2020, Illinois
borrowed the money from the Federal Reserve’s Municipal Liquidity
Facility due to revenue shortfalls associated with the pandemic.
By the end of January, Illinois was able to pay back the $3.2 billion
two years early, saving taxpayers about $82 million.
Sen. Cristina Castro, D-Elgin, released a statement stating that
reducing the bill backlog will improve the state’s fiscal standing.
“Making sure we save money on unnecessary interest costs by paying our
bills on time means saving Illinois taxpayers money,” Castro said.
If the budget is passed and signed into law, Mendoza said, “there is no
doubt in my mind” that Illinois’ credit score will once again improve.
The June upgrade from Moody’s put Illinois two notches above “junk” bond
status, which is still one of the worst credit ratings in the U.S. But
Mendoza said anytime credit is improved, it helps taxpayers save money
when the state has to borrow funds.
“Anytime our credit improves, that means that the cost of borrowing or
access to cash will be cheaper for taxpayers,” Mendoza said. “That’s a
wonderful place to be.”
Capitol News Illinois bureau chief Jerry Nowicki contributed to this
story.
Capitol News Illinois is a nonprofit, nonpartisan news service
covering state government and distributed to more than 400
newspapers statewide. It is funded primarily by the Illinois Press
Foundation and the Robert R. McCormick Foundation.\
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