Illinois state unpaid bill pile hits record $12.8 billion
Illinois’ pile of unpaid bills, a barometer of the state’s deep financial problems, hit an all-time high of $12.8 billion, the state comptroller announced on Friday.
The US’s fifth-most populous state (with 12.8 million residents) is limping through a record-setting second-straight fiscal year without a complete budget, due to an ongoing impasse between its Republican governor and Democrats who control the legislature.
With the bill backlog representing $1,000 for every state resident, Illinois Comptroller Susana Mendoza called on Gov. Bruce Rauner and legislators to pass a budget.
“Illinois is in the midst of a historic financial meltdown,” Mendoza, a Democrat, said in a statement. “Our social service agencies, schools and seniors have suffered during the 21 months we’ve waited for executive action on an actual budget.”
Despite Illinois’ inability to enact a spending plan, the state is operating on continuing appropriations to cover big-ticket items such as payments for pensions and bonds, and court-ordered spending for payroll and an array of health and human services.
A massive bipartisan bill package to end the budget stalemate has been on hold in the state Senate since March 1 when Republican support evaporated.
The package includes bills to complete the fiscal 2017 budget, which expired on December 31, as well as to hike taxes, cut pension costs by about $1b. annually, authorize borrowing to pay down the bill pile, expand casino gaming, and freeze local property taxes.
Illinois, which ended fiscal 2016 on June 30 with a $9.6b. deficit, is also struggling with unfunded liabilities of $130b. for pensions and $33b. for state retiree healthcare.
Without a credible budget fix, Illinois’ triple-B credit rating, the lowest among the 50 US states, risks sliding closer to the junk level or even into it.
“Nothing is off the table” given the fact no state has gone 20 months without a budget, S&P Global Ratings analyst Gabe Petek told a credit forum audience in Chicago a week ago.
No US state has ever been rated at the junk level, according to records dating back about a half century from S&P, Moody’s Investors Service and Fitch Ratings.
(Reuters)