Frerichs repeats ‘alarm bells’ over need to pass state budget

Posted on May 18, 2018
State Treasurer Michael Frerichs says while he is not a participant in the budget process, he can point out how much the lack of a budget can cost the state. (WJBC file photo)

By Greg Halbleib

BLOOMINGTON – Illinois Treasurer Mike Frerichs is again sounding alarm bells about how much more the lack of a state budget will cost.

Frerichs told the WJBC Afternoon Report that the state’s credit already dropped drastically during the period without a budget, and a repeat occurrence will severely damage the state’s finances.

“If we make it into July without a budget in place, it is very likely we will be downgraded to junk bond status. Illinois would be the first state in the country to be rated at junk bond status,” Frerichs warned. “A lot of times you want to be number one. This is not one of those examples.”

Frerichs is in charge of investing the state’s money. He said he’s improved investment income for the state, but that could be offset by what the state would have to pay in overdue bills.

“We try to bring in more interest to the state. We’ve quadrupled our investment income,” Frerichs said. “But if the state is going to quadruple the interest it’s paying on debt, then it’s really going to cancel out the work we’re doing.”

The legislature has until June 1 to pass a budget with a simple majority.

Greg Halbleib can be reached at [email protected]. 

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