Restructure state’s debt and pay bills

I am pleased to see the press devote coverage to the issue of the state’s unpaid bills — this is a problem I have talked about since March. Now let’s give equal consideration to proposed solutions.

Working with the Greater Springfield Chamber of Commerce, the comptroller and bond market experts, I introduced legislation in May to refinance the state’s backlog of unpaid bills through the sale of bonds. Besides the obvious reasons, there are other equally significant reasons to pay our bills.

First, small businesses, knowing they have to wait months to be paid, simply don’t bid on state contracts, which means less competition and higher costs. Those who do bid increase their costs to cover the wait for payment. Second, the state is paying 12 percent interest on a portion of these unpaid bills. The bond interest rate is approximately 3 percent. Third, imagine the jobs we could save or even create if we put $6 billion into the hands of businesses right now.

Finally, paying off the backlog of bills through the sale of bonds will help stabilize the state’s budget, forcing greater fiscal discipline. Bond debt payments must be paid upfront — we make our loan payments first. Bond payments cannot be missed or pushed off into later years.

So why has the plan not garnered the support it needs? The answer is politics. Some have said this proposal is more borrowing and new debt. The real-life stories you reported over the past week and the stories I hear in my district reiterate what I’ve been saying: This is not new debt! This debt already exists and is carried on the backs of vendors who never intended to lend us the money. My plan would take existing debt, responsibly restructure it at a low interest rate and stabilize the state’s economy and overall finances.

State Sen. John M. Sullivan

47th District