State revenues have increased this fiscal year, but there’s still billions of dollars in backlogged bills to contend with. The Senate president still thinks debt restructuring is the way to go. Debt restructuring is another way to say borrowing money to pay down old debt at a lower interest rate. Cullerton says the last time he checked, the state still owed $6 billion.
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“We could borrow that six, refinance it, and pay it off in seven years by paying $1 billion a year in interest, and avoid costs that we make by paying when we’re in violation of the Prompt Payment Act,” he says. Cullerton says most Democrats are on board with that plan, but Republicans have held up negotiations as they want no new borrowing, instead opting for more spending cuts. However, a borrowing plan failed in the Senate during last spring’s legislative session, receiving just 19 votes. There are 35 Democrats in the Senate.