Mendoza suggests Illinois due for credit upgrade
By PETER HANCOCK
Capitol News Illinois
phancock@capitolnewsillinois.com
SPRINGFIELD – Illinois Comptroller Susana Mendoza is asking the nation’s three major credit rating agencies to reconsider the state’s credit rating with an eye toward a possible upgrade.
In an April 28 letter to executives at Moody’s Investors Service, S&P Global Ratings and Fitch Ratings, Mendoza argued that Illinois has virtually eliminated its backlog of past-due bills while keeping current on its bond payments and pension obligations, all in the midst of a global pandemic.
“Please be assured that my office is doing everything possible in managing the current backlog of bills and addressing Illinois’ finances head on,” Mendoza wrote. “The Office of Comptroller urges your agencies to consider these positive factors and progress made paying down the backlog when evaluating Illinois’ credit worthiness.”
Illinois currently has the lowest investment-grade credit rating available from all three rating agencies, one notch above what is considered “junk bond” status.
Mendoza wrote that letter on the same day her office announced that the state’s bill backlog – actually, the sum total of all outstanding vouchers waiting to be paid – had been decreased to just $3.5 billion.
According to the letter, the oldest outstanding commercial voucher at that time was just two days old. The backlog was within the 30-day billing cycle that is common in the business world, Mendoza’s office said.
In fact, Mendoza said during an interview Tuesday that she believes the state now needs to come up with another word besides “backlog.”
“The key statistic here is that right now we are up to date with all of our commercial vouchers,” Mendoza said. “So there is no one waiting to get paid in my office. There could still potentially be some people that are waiting to get paid because their invoices might be at the agency level and they just haven’t sent them to us. But you’re talking about a minute group of people.”
Since Mendoza announced that the backlog had been paid down, the amount of outstanding vouchers has fluctuated daily, roughly between $3.5 and $4.5 billion. But she said the bulk of that is the result of interfund borrowing – when the state transfers money from other funds into the general revenue fund to meet short-term cash flow needs – as well as the normal “ebb and flow” of daily business in state government.
Apart from those expenses, though, the state does have significant short-term obligations coming due, including roughly $3.2 billion the state borrowed from the Federal Reserve during the pandemic, plus another $400 million borrowed from the state treasurer’s office.
Both Mendoza and Gov. JB Pritzker had said in earlier interviews that they wanted to use a portion of the roughly $8 billion in federal relief funds that Illinois expects to receive through the recently-passed American Rescue Plan to pay off the Federal Reserve loans. But new guidelines from the U.S. Treasury Department that were released on Tuesday specifically prohibit using those funds for “payment of interest or principal on outstanding debt instruments, including, for example, short-term revenue or tax anticipation notes, or other debt service costs.”
State Rep. Michael Zalewski, D-Riverside, who chairs the House Revenue Committee, said in an interview Wednesday that he does not believe the relief funds can be used to repay the Federal Reserve and that any repayment plan will have to be “part of a broader budget conversation.”
But Mendoza said in a statement Wednesday that she believes there may be room to negotiate with Treasury on the use of those funds.
“The Dept. of the Treasury said it welcomes feedback to the interim guidance on permitted uses of the stimulus funds,” she said in an email statement. “(The Governor’s Office of Management and Budget) and our office will be seeking to clarify with the Treasury that guidance against using these funds to pay debts unrelated to COVID-19 does not prevent their use for paying debts accrued for spending related to COVID expenses. Our office has made clear that stimulus funds will not be used to pay legacy costs such as pensions.”
During a separate news conference Wednesday, Pritzker insisted the state is committed to repaying the Federal Reserve loans one way or another, but said he believes the state should be allowed to use the relief funds for that purpose.
“Look, the federal government is sending us dollars and then telling us that we can’t then send those dollars back to the federal government to pay for the borrowing we took out last year. Clearly it doesn’t make a lot of sense and so we’ve talked to the Treasury Department about that,” he said.
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.
Local News
Hodgkins toasts village businesses
Spread the loveBy Carol McGowan Hodgkins Mayor Ernest Millsap and the Board of Trustees celebrated the village’s businesses at its annual Business Appreciation Breakfast on April 10. Over 100 people gathered at the Hodgkins Administration Center for a hearty breakfast hosted by the village. Representatives from many businesses that are located in or that work…
Pickleball courts coming to Palos Park
Spread the loveBy Jeff Vorva There will finally be outdoor pickleball in Palos Park. In a process that went longer than anticipated, the Palos Park Village Council was able give the green light to get a pickleball project started on the Village Green. The council voted April 8 to award the contract to U.S. Tennis…
First Secure Bank to host American Eagle gold coin sale
Spread the loveFrom staff reports First Secure Bank & Trust of Palos Hills announced its annual May sale of 1-ounce and ¼-ounce American Eagle Gold Coins, produced by the U.S. Mint, will take place from 10 a.m.to noon on Saturdays, May 4, May 11, May 18 and May 25. The sale will take place at…
Donate teddy bears to our local police
Spread the love. Peggy Zabicki Your correspondent in West Lawn 3633 W. 60th Place • (773) 504-9327 . Have you ever seen the 1955 movie The Night of the Hunter? The children in this movie show such bravery and acceptance in what life has thrown at them. They have to deal with unimaginable events and sadness. …
Boy Scouts collecting tattered flags for disposal
Spread the love. By Mary Stanek Your correspondent in Archer Heights and West Elsdon 3808 W. 57th Place • (773) 517-7796 . Goodbye April, hello May. Our American Flag, the symbol of our country, should always be treated with respect. But after bearing Chicago’s brutal winters and hot blazing summers along with being in the…
Oak Lawn trustee says village needs state grocery tax
Spread the loveBy Joe Boyle An Oak Lawn trustee said that Gov. J.B. Pritzker’s proposal to eliminate the state’s grocery tax will be costly for the village. Trustee William “Bud” Stalker (5th), accompanied by Mayor Terry Vorderer, recently returned from a fact-finding trip to Springfield where they learned more about the governor’s proposal to eliminate…
Palos Heights recognizes volunteers
Spread the loveBy Nuha Abdessalam Palos Heights handed out awards last week recognizing the services provided by volunteers through the years. The proclamations, which were read aloud during the city council meeting April 16, were a testament to the city’s volunteers and were handed out as part of Volunteer Recognition Week. Volunteers were cited for…
Boys Volleyball | Richards weathering struggles after run of success
Spread the loveBy Xavier Sanchez Correspondent After a tough weekend at the Smack Attack tournament, Richards got back into the win column with a two-set victory over Eisenhower in a South Suburban Red match. The Bulldogs made quick work of the Cardinals, winning 25-16, 25-15 on April 23 in Oak Lawn to snap a five-match…
SD218 puts on annual Arts Extravaganza
Spread the loveBy Kelly White The arts have become a major portion of the curriculum Community High School District 218. Showcasing those many talents, the Friends of CHSD 218’s Education Foundation proudly hosted its 15th annual Arts Extravaganza on April 5 at Eisenhower High School in Blue Island. “The Arts Extravaganza is a great event…
Neighbors
Man charged with child abduction in Stickney Township
Spread the loveFrom staff reports A Chicago man was charged last week with child abduction and luring of a minor after Cook County Sheriff’s Police detectives found he attempted to lure a minor into his vehicle, said Cook County Sheriff Thomas J. Dart. According to police, about 4:43 p.m. on Monday, April 22, officers responded…
Worth Library celebrates 60th anniversary
Spread the loveBy Kelly White The Worth Public Library has been around for decades. Resting in the heart of the village at 6917 W. 111th St., the library held an event focusing on its rich background story on April 23 with a historical photo exhibit. “It’s amazing because this library is still so important to…
Rose Zubik, Woman’s Club veteran, installed as 3rd District president
Spread the love Rose Zubik, of Palos Heights, the new president of the 3rd District General Federation of Women’s Clubs-Illinois, lights a candle during the installation ceremony held April 27 at Fox’s Restaurant in Orland Park. Heather Linehan, the outgoing president, is beside her.By Dermot Connolly A longtime member of the Palos Heights Woman’s Club…
Shots fired in Chicago Ridge Commons parking lot
Spread the loveFrom staff reports Shots were fired Wednesday night in the parking lot at Chicago Ridge Commons mall. Police said they received reports of the shooting about 9:45 p.m. No injuries were reported. Multiple witnesses told police four men were walking through the parking lot from the XSport Fitness area. They approached two vehicles…
Hair salon with a ‘flair’ marks first year in Chicago Ridge
Spread the loveBy Joe Boyle Melissa Kowalski wanted to do something meaningful to mark the first-year anniversary of her Flair With Hair Salon in Chicago Ridge. “We did not have a grand opening last year so I wanted to do something really special,” Kowalski said. “We wanted to say thank you to our clients.” Kowalski,…
Palos East fifth-grader wins Scholastic Storyworks writing contest
Spread the loveGabriel Chowaniec, a fifth-grader at Palos East Elementary School, has been named a winner of the Scholastic Storyworks Magazine writing contest. Gabriel, who is a student in Cathy Casey’s fifth-grade classroom, was named one of only five winners nationally for the December 2023/January 2024 competition. Garbriel’s submission for the nonfiction story “The Shattered Land,” “showed a strong understanding of the text along with the ability to author a well-organized…
Shepard celebrates Autism Week
Spread the loveBy Kelly White World Autism Acceptance Week is organized by the National Autistic Society in the first week of April and aims to raise awareness about the challenges autistic people face across all areas of society. Not missing out the opportunity to celebrate all-inclusion was Shepard High School, 13049 S. Ridgeland Ave., Palos…
Billions of cicadas get ready to raise a racket
Spread the loveBy Kelly White If you haven’t heard the buzz yet, you will soon. With 2024 marking a big year for periodical cicadas in Illinois, billions of the red-eyed buggers will soon be making an appearance. Periodical cicada broods XIII and XIX will be emerging throughout much of the state at the same time.…
‘A man of honor, a beacon of kindness’
Spread the love. Chicago weeps for Officer Luis Huesca . By Tim Hadac People across the Southwest Side shed tears earlier this week, as throngs of police officers and other filled the St. Rita of Cascia Shrine Chapel at 77th and Western for a funeral Mass for CPD Officer Luis M. Huesca. Officer Huesca was…