Sept 10. Will austerity ever hit Illinois?
Here’s some excerpts from a Bloomberg article in Jan 2011, 2.75 years ago:
http://www.bloomberg.com/news/2011-01-12/illinois-governor-quinn-calls-67-increase-in-income-tax-crucial-to-state.html
Illinois Governor Pat Quinn will ask lawmakers next month to authorize an $8.75 billion bond sale to pay at least $6 billion in overdue bills. ….Money reaped by raising the [income tax] rate to 5 percent from 3 percent is first dedicated to debt-service and payroll, Kraft said. There is not enough money from the tax increase to pay all vendors, which is why the borrowing is needed, Kraft said.
Now, in Q3 2013 the estimate for unpaid bills is $8.1 billion. From the Illinois Policy Institute: “Illinois is required by law to pay interest of 1% a month on its unpaid bills, also called invoices, when they become more than 90 days old.
According to the comptroller’s most recent numbers, Illinois paid $186 million in interest payments on its unpaid bills in fiscal year 2013. That’s 215 times the $866,000 in interest payments paid by the state in fiscal year 2003..
Just as a note of comparison, Illinois pays $186 million a year in interest on unpaid bills, while Emanuel’s school closing program was expected to save $43 million a year and $560 million in ten years in lessened capital costs….call it $100 million a year.
