Illinois “Fix” to Unpaid Bills Could be a Financial Bomb

 

The St. Louis Post-Dispatch article describes the State’s Vendor Support Initiative program that that pays vendors 90% of what is owed by State-designated financial lenders.  Once the State pays, the vendor receives the final 10%.  The State-designated financial lenders receive 1% per month on receivables 90 days past due and unlimited late-payment fees-now approaching 20%.

The article states that the amount of the overdue bills could reach $13.5 billion, or 40 percent of available operating revenue by June 30, 2017.

Who are these “State-designated financial lenders?”  The article indicates that the firms include Citibank N.A. and Bank of America Corp., a distressed debt investor tied to Governor Rauner campaign donor and political insiders, including Hillary Clinton’s 2008 campaign manager and a former two-term Illinois governor.

St. Louis Post-Dispatch article