Illinois’ budget stalemate is costing the state’s investment portfolio millions of dollars every month.
State Treasurer Michael Frerichs said the ongoing gridlock in Springfield doesn’t allow him to invest $12 billion of state money in a way that would maximize returns. He estimates Illinois will lose about $31 million in a year in investment income if no budget compromise is reached. “Instead of longer-term, higher-yielding investment tools, we’ve had to move money into shorter-term, less lucrative investments.”
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Frerichs said the two main reasons his office would need cash on hand are unplanned court-ordered spending and potential sweeping of funds from special accounts to pay bills. Frerichs said the cost is eventually passed down to taxpayers. “This uncertainty rips money out of the pockets of every resident in the state of Illinois.”
The treasurer said that while he would prefer a long-term budget, he thinks a stopgap measure would be better than no budget at all. “Two, one-year budgets would be the best path forward, but a stopgap budget would be preferable to doing nothing.”
Gov. Bruce Rauner took $1.3 billion from special accounts to pay bills after the General Assembly failed to pass a balanced budget last year.