After Illinois lawmakers patted themselves on the back and told taxpayers the budget they passed this year was balanced, a bond issuance tells potential buyers that the state budget is $1.2 billion in the red.
Even using the proceeds of a $5 billion income tax increase passed in 2017, and assurances from lawmakers it was balanced when they passed it in May, a state filing for bond buyers notes that the “Fiscal Year 2019 General Funds budget has an estimated underlying structural deficit of $1.2 billion.”
The governor’s office said the two series of bonds, one a $656.5 million issuance that matures in 2033, and a second for $263.7 million that matures in 2032, is not borrowing, it’s swapping interest rates that are variable with fixed interest rates. That rate is not yet known.
Illinois’ credit rating, which is the worst in the country at one notch above junk status, could affect that interest rate, possibly costing taxpayers more. Click here to read more