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After failing to make payments to state vendors for the past three years, Illinois is now $4 billion in the hole, Bloomberg reports. At least 8,000 vendors have been waiting for months for the state to pay its bills. Many have been forced to lay off workers, cut services and secure loans and lines of credit to keep business going while they wait for the state to pay up.
Creditors owed include government health and education agencies, schools, charities, funeral homes, hospitals, and contractors. There’s also the matter of an $11,300 unpaid bill to La Roma Pizza in Canton, Ill.
Last month, Illinois lawmakers rejected Gov. Pat Quinn’s plan to pay off the debts through a bond sale. The state borrowed $3.7 billion to make its annual pension payments early this year.
A 67% state income tax and 46% corporate income tax increases approved last January will not cover the backlog, which means the debt will roll over to another fiscal year on July 1.
The mounting bills have driven up the cost of insuring $10 million of Illinois bonds against default by 28% since May 20.
We called La Roma Pizza in Canton to find out why the state owes them so much money. It appears the company is actually a food distributor, not a “downstate restaurant,” as Bloomberg reports, which may explain the size of the debt. No one was available to comment on what the $11,300 bill is for.
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