CHICAGO -- Governor George H. Ryan, joined by Treasurer Judy Baar Topinka and Comptroller Dan Hynes, today said an agreement had been reached on a $1 billion short-term borrowing program to help the state pay overdue bills. The loan will be repaid by the end of Fiscal Year 2003.
“Illinois needs to make good on its bills,” Ryan said. “Many vendors find themselves in a crunch because of a delay in payments from the state. Thanks to the commitment of Treasurer Topinka and Comptroller Hynes, that’s all about to change.”
The majority of the overdue bills is from health care providers for Medicaid patients. Short-term borrowing also helps the state avert interest penalties for late payments.
Under the plan, the state would issue $1 billion of short-term certificates in July and set aside re-payment funds throughout fiscal year 2003. The certificates will mature on or before June 30, 2003.
The certificates will be issued through a competitive, sealed-bid process. The state expects interest on the certificates to approximate 2 percent. In the just-concluded legislative session, the General Assembly and the Governor allocated $15 million in the state’s budget for the interest payments on the short-term borrowing.
Comptroller Hynes said, “We look forward to alleviating the pain that delayed payments have caused the state’s providers, many of whom are already facing lower reimbursements. In the process, we will save the state millions of dollars in late penalties.”
Treasurer Topinka said, “I am supporting this agreement because I believe it preserves our state’s good credit rating, includes a timely repayment plan and provides some immediate relief to the businesses and companies who have gone out on a financial limb to provide goods and services to this state.”