Gov. Bruce Rauner criticized Democrats' call Monday to borrow money to take a chunk out of a $14.4 billion pile of overdue bills. Debt-heavy Illinois should not seek more credit to get out of its financial hole, Rauner said in response to advice from Democratic Comptroller Susana Mendoza and Treasurer Michael Frerichs.
"More borrowing on top of the spending behavior of the state government is not an optimal answer,'' Rauner said.
Mendoza and Frerichs issued separate pleas to sell up to $6 billion in bonds, repayable at a lower interest rate than the late-payment fees the Prairie State is coughing up.
"Better interest rates are available,'' Frerichs said in a statement. "Taxpayers paying $2 million in interest each and every day defies common sense and borders on malpractice.''
For years, Illinois has essentially borrowed cash from vendors, social-service agencies and medical providers by ignoring credit-payment due dates. The pile grew rapidly during a two-year budget standoff between Rauner and Democrats who control the Legislature. It ended last month when lawmakers adopted the state's first budget since 2015 over Rauner's vetoes.
The budget includes bond-sale authorization. Despite the nation's worst credit rating, experts say Illinois could pay a rate of interest that's half the 12 percent promised to many vendors whose payments are more than 60 days late.
Rauner threw the ball back in Mendoza's court. The budget also allows cash transfers from other state funds to pay down bills. He said payment on Medicaid bills draws an equal amount of reimbursement in federal funding. His office later released a statement that Mendoza's action is necessary to help the governor decide on a bond-sale plan.
Mendoza spokesman Abdon Pallasch said that's what the comptroller has been doing.
"We'd like to thank the governor's office for validating the work that we have already been doing,'' Pallasch said in a statement. "What we need now is movement from the governor's office and a solid timetable for refinancing the debt.''
