Comptroller says proposed budget could lead state to another credit upgrade
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.
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.
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.