Bryant sees savings in using bond sale to pay down state debt
The state of Illinois is advancing a plan aimed at paying down its nearly $17 billion in unpaid debt by prioritizing those bills eligible for federal matching funds, state Rep. Terri Bryant (R-Murphysboro) said in a recent 8 Facebook post.
The Illinois Comptroller’s Office said it will use revenue generated from Illinois' recent $6 billion general obligation bond sale to pay down the state’s $16.7 billion backlog, effectively putting an end to the avalanche of debt being accrued in late interest payments on unpaid bills, some of which date back to 2015, the posting said.
“The state owes an estimated $900 million in late payment interest penalties on its bill backlog,” Bryant said in the Nov. 8 post. “The bond sale effectively refinances future interest costs on the state's existing debt, saving taxpayers billions of dollars over the next decade.”
Estimates are the state will receive roughly $6.5 billion in bond proceeds, including a $480 million premium from the sale on top of the $6 billion initially offered, the posting said.
The plan calls for approximately $2.5 billion to be immediately spent on unpaid medical bills, with approximately another $4 billion going toward unpaid state health insurance claims.
In the days to come, the estimated $2 billion generated in federal matching funds is slated to be applied toward state medical bills.