State paying bills, but not late-payment interest

During the Illinois budget crisis, private companies borrowed billions of dollars to pay government vendors on time with the promise that state repayment would come with late fees.

Posted: Apr 23, 2018 3:58 PM

SPRINGFIELD, Ill. (AP) - During the Illinois budget crisis, private companies borrowed billions of dollars to pay government vendors on time with the promise that state repayment would come with late fees.

Now the participants in the Illinois vendor-assistance program say they're not getting hundreds of millions of dollars in late-payment interest they're owed.

The financiers told legislators Monday that lending banks might discontinue participation.

A $6.5 billion bond issue last fall helped the state comptroller pay down what was $16 billion in past-due bills.

But Gregory Gac of Illinois Financing Partners says it is still owed $115 million. Brian Hynes says his firm, Vendor Assistance Program, is owed $250 million.

State law requires interest be paid "within a reasonable time."

A spokeswoman for Comptroller Susana Mendoza did not immediately comment.

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