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* A new record…
$16,046,145,423.20 GENERAL FUNDS PAYABLES BACKLOG AS OF 09/18 7.61% INCREASE FROM 09/12 https://t.co/G21DQvmIiy #ILBillBacklog #twill pic.twitter.com/uudoZ6wLW3
— Illinois Comptroller (@ILComptroller) September 19, 2017
The next really good month for revenues is December, according to the comptroller’s office. So, without a bonding plan, expect that backlog number to remain pretty high.
* Reuters…
But on Monday, the governor told reporters that the bonds do not solve any problem because lawmakers failed to set aside money to make principal and interest payments over the 12 years the debt would be outstanding.
“We need to come up with roughly half a billion (dollars) of cuts just to be able to service a bond offering,” he said, adding that he planned to meet with legislative leaders for discussion.
Pallasch said school aid and pension payments this week will lower the bill backlog into the $15 billion range as the Dec. 31 deadline for issuing the bonds looms.
“The ball’s in their court now and we are working with them to make this happen,” he said.
* Meanwhile…
Gov. Bruce Rauner doesn’t want to negotiate in the media about what actions the Legislature should take next, but he said the state budget is not balanced and there needs to be a construction bill. […]
“I don’t like to borrow to fund deficits,” Rauner said. “Borrowing for long term capital projects is actually good management. It’s actually the prudent financial thing to do. But we can get the debt service covered if we can shrink some of the spending on other things and then debt service to fund construction projects.”
Rauner announced a plan earlier this month to borrow $6 billion dollars to pay down some of the $16 billion bill backlog with debt service to be half a billion dollars each year for the next 12 years.
posted by Rich Miller
Wednesday, Sep 20, 17 @ 3:15 pm
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===“I don’t like to borrow to fund deficits,” Rauner said.===
So let’s run up $10 billion and pay 12% a year on it? Worst money manager ever. But it gets worse. He says $500 million in cuts are needed and then he restores cuts that he already made. What a joke of a Governor.
Comment by Ducky LaMoore Wednesday, Sep 20, 17 @ 3:19 pm
Beep beep beep, the Rauner truck is backing up. Look out Illinois.
Seriously if you can’t make smart decisions and your word is no good, what use are you?
Comment by Sonny Wednesday, Sep 20, 17 @ 3:24 pm
BVR yoga mantra: Must Squeeze the Beast, Must Squeeze the Beast’ Must Squeeze the Beast…
Comment by Gruntled University Employee Wednesday, Sep 20, 17 @ 3:29 pm
You use the savings from the 12% interest you are no longer paying plus the payments you were paying on those claims,
Example. Car payment $500 12%
Refinance - resulting car payment $500 ( or less) 6%.
Resulting additional out of pocket - some loan fee costs, more than offset by the fact your refinanced loan ends sooner because more of Payment goes to principal.
He’s never refinanced a thing.
Banned words, followed by banned punctuation.
Comment by Thoughts Matter Wednesday, Sep 20, 17 @ 3:32 pm
==“Borrowing for long term capital projects is actually good management. It’s actually the prudent financial thing to do.==
Not according to Irving Fisher. In basic finance, the Fisher Separation Theorem says that the decision of what investments to make should be independent of the decision on how much of the investment should be financed by borrowing.
Comment by Whatever Wednesday, Sep 20, 17 @ 3:41 pm
The State doesn’t have to find the entire $500M. The way I figure it, the spread on $5B going from 9% to 4% is $250M on interest savings. If you go from 12% to 5% it is $350M in interest savings.
What is the problem? It almost like Rauner wants to save any borrowing the State might do for some other scheme. Or he doesn’t want to goose the State economy with $5B of cash.
Comment by RNUG Wednesday, Sep 20, 17 @ 3:46 pm
What’s Rauner talking about? By statute the bonds would be paid first.
As CEO, he would have to demonstrate the mad cash management skills — or even identify savings and efficiencies — representing 1.2% of GRF revenue.
If that’s beyond him, what does he think he’s doing there?
Comment by wordslinger Wednesday, Sep 20, 17 @ 3:46 pm
- Borrowing for long term capital projects is actually good management. It’s actually the prudent financial thing to do. -
Changing his tune from when he first took office, I can’t seem to find the article.
Only took him 2 years to learn what everyone else already knows.
Comment by Anonymous Wednesday, Sep 20, 17 @ 3:47 pm
Did he offer a balanced budget today? Did any of his agency heads offer reductions at their agencies?
Comment by Anonymous Wednesday, Sep 20, 17 @ 3:54 pm
Does this take into account his “pension savings”?
Comment by 360 Degree TurnAround Wednesday, Sep 20, 17 @ 4:00 pm
Are they returning calls on this story…and stuff?
Comment by 360 Degree TurnAround Wednesday, Sep 20, 17 @ 4:01 pm
===“I don’t like to borrow to fund deficits,” Rauner said. “Borrowing for long term capital projects is actually good management. It’s actually the prudent financial thing to do. But we can get the debt service covered if we can shrink some of the spending on other things and then debt service to fund construction projects”.===
… says the governor yet to sign a full year’s going on 3 fiscal years he could do so.
That’s real.
Comment by Oswego Willy Wednesday, Sep 20, 17 @ 4:05 pm
Glad we finally have a budget.
Constitutionally balanced of course.
Comment by Shemp Wednesday, Sep 20, 17 @ 4:13 pm
==he said the state budget is not balanced and there needs to be a construction bill==
Could it be…after all this time…a state budget for the ensuing fiscal year?
Comment by Jocko Wednesday, Sep 20, 17 @ 5:13 pm
At the rate things are going in about 20 years most of the general fund is going to go to pensions and interest past debts.
I don’t think people generally grasp how dire things are going to get in this state.
We will loom at these days fondly as the good old days.
I genuinely feel for the next generation, as they are going to be fiscally handcuffed and there is not a thing they can do about it.
Imagine a world right now in which we had to cut spending by 30-40% right now. That is what the next generation is facing as an ever increasing share of the general fund is going to go to pensions and servicing old debts.
It will be like bringing in $30 billion in revenues, and yet only being able to spend $20 of them on the states needs (when it probably needed more than $30 in the first place).
It’s just downright criminal.
Comment by Anon Wednesday, Sep 20, 17 @ 5:48 pm
Why does Rauner seem so reluctant to pay folks back the money the state owes them? He comes up with one excuse after another and meanwhile the state could be saving millions every month but instead he continues to run up debt. In January it will be 3 years of doing his best to run the state into the ground. It’s intentional, no one could be this incompetent.
Comment by Dude Abides Wednesday, Sep 20, 17 @ 6:25 pm
I’m from the government and I’m here to help. Scariest words you will ever hear.
Comment by KJU Wednesday, Sep 20, 17 @ 6:31 pm
I was actually conservative with my earlier numbers, using $5B instead of the planned $6B.
If you use $6B, and figure dropping from 12% to 4%, the interest savings the first year is $480M.
Using Rauner’s $500M number, $500M - $480M = $20M.
The State can’t find $20M this FY? I don’t believe it, $20M in the State budget is like 2¢ in most people’s budgets.
Comment by RNUG Thursday, Sep 21, 17 @ 12:03 am
Generally speaking… People do what they perceive to further their interests. When people don’t do what seems logical to achieve their stated goal (good fiscal management, etc.), one should assume they actually have an alternative goal. The question then becomes what is that alternative goal.
Comment by logic not emotion Thursday, Sep 21, 17 @ 8:19 am
Rep Harris reaptedly said $350 million was built into the budget that the Assembly approved over the veto to pay the interest on the $6 billion in borrowing. I haven’t found it and I looked, has anyone else?
Comment by Rod Thursday, Sep 21, 17 @ 8:30 am