Rauner Says Cash-Strapped State Needs To Borrow $480 Million
By aaroncynic in News on Jan 4, 2016 8:55PM
Illinois governor Bruce Rauner last February in Chicago. (Photo by Scott Olson/Getty Images)
Illinois Governor Bruce Rauner plans to borrow $480 million to pay for road construction projects this month. According to the Chicago Tribune, the state will conduct a general obligation bond sale on January 14th, in the hopes the borrowed cash for new construction projects will boost the economy.
"Road construction and transit improvements are key factors in growing the Illinois economy, which is why Illinois is planning a bond sale in January,” said Rauner spokesperson Catherine Kelly.
Illinois has been without a state budget since June 2015, and could continue to go without one until spring, Rauner hinted last month. By the time the 2015 budget year comes to a close, the state could be $8 billion in debt. According to an estimate from the Civic Federation, the state pays out around $33 million more than it takes in per day.
Illinois also has the lowest credit rating of any state in the U.S., which makes it more expensive for the state to borrow money. In October, Moody’s Investors Service downgraded Illinois to its lowest tier, and last month, said that pensions are the state’s “greatest challenge,” reports Bloomberg.
Rauner’s office did not estimate what the cost of the bond would be, but told the Tribune it would take the lowest rate and that there are “sufficient dedicated revenues to cover the payments." According to the AP, the governor said borrowing the money for the projects, which would not be for day-to day operations, is "very appropriate."