Illinois to borrow $1.4 billion to pay waiting agencies, schools

SPRINGFIELD - Illinois will borrow $1.4 billion to make payments to schools, health care providers and others who've been waiting months to be reimbursed by the state.

The deal, which does not need lawmakers' approval, could be completed within weeks and potentially free up cash to pay backlogged bills by month's end.

"Especially in this poor national economy, Illinois needs to make sure that we can pay the businesses that provide the state with the goods and services which help families in these tough times," Gov. Rod Blagojevich said in a statement announcing the borrowing plan, which was agreed to by Comptroller Dan Hynes and Treasurer Alexi Giannoulias.

The state's delinquency in paying billions of dollars in bills has caused havoc with budgeting at schools, hospitals and other health care providers.

For example, school district officials in DuPage and Kane counties have recently said transportation and special education services were in danger because of a three-month delay in state payments.

"Now we're moving money around just to cover our expenses and keep our relationships with our vendors," Naperville Unit District 203 Superintendent Alan Leis told the Daily Herald earlier this week.

Additionally, health care and early-intervention providers have also complained about excessively late state payments.

"It's like going to your job and never knowing when you will be paid," said Algonquin physical therapist Nicole Molinaro, one of thousands who work with children in the state's early intervention program.

The governor's move to borrow $1.4 billion to pay late bills is one leg of a plan to help cover the state's budget shortfall of more than $2 billion this year. The plan also calls for cuts of up to 8 percent in spending cuts, including education. The governor has yet to move to make those cuts as lawmakers debate ways to bring in more tax dollars or cut programs.