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Comptroller Nixes $500 Million Loan for Bill Payment
The state will not be able to borrow $500 million to pay some of its backlog of bills.

Comptroller Dan Hynes exercised his veto power over the proposal Friday, saying the state is already up to its eyeballs in short-term debt. "Borrowing alone is not going to solve this problem," he said in rejecting the proposal. "We've borrowed $2.25 billion already."

The state is four months behind in paying its bills, and owes its creditors $4 1/2 billion. $500 million of that is owed to Medicaid providers. The plan would have allocated $250 million to pay half of those bills, and $250 million to pay off a small portion of the remaining $4 billion.

The amount of the borrowing plan has fluctuated in the weeks since the governor proposed it. At one time, the proposal was for just under $1 billion.

Gov. Pat Quinn says the state must meet that responsibility, even if it means borrowing. Quinn says the state can borrow at a cheaper rate than state vendors can. He's asking Hynes to reconsider.

Borrowing of this nature requires the assent of the governor, comptroller and treasurer, so the comptroller's rejection is effectively a veto.

Hynes and Quinn are running against each other in the Democratic primary for governor. Quinn says Hynes' rejection of the borrowing scheme is political, because Hynes has approved borrowing of this nature 11 times before.

(Illinois Radio Network)
12 04 09 by Newsroom
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