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Sen. Daniel Biss (D-Evanston) today called on Gov. Bruce Rauner to seek to renegotiate lucrative interest-rate swap deals that send $6 million in taxpayer money to big banks every month at the expense of Illinois’ poorest residents and struggling college students.
An alarming new report indicates the state of Illinois is engaging in the same kinds of interest-rate swap deals that crippled the finances of the City of Chicago and Chicago Public Schools. So-called “swap” arrangements perversely penalize the state for low interest rates caused by the global financial crisis.
Illinois has spent $618 million on such swaps already, and the total cost to taxpayers could climb to $1.45 billion by 2033, when the deals are set to end. In addition, according to the report, taxpayers could be on the hook for $124 million in termination penalties as soon as November, depending on how long budget negotiations are delayed.
Biss noted that a great deal of harm is being done to the state’s most vulnerable residents – the poor, the elderly, the disabled and struggling college students – as a result of the current budget impasse.
“In this environment we have an obligation to pursue every possible avenue to relieve fiscal pressure, and if seniors, children and the disabled are being forced to sacrifice, then there’s no reason for Wall Street to remain untouched,” Biss said. “We in the legislature have a responsibility to the people of Illinois to explore these questions and do our best to recover any legally available funds.”
Click here to read the ReFund America Project report, “Turned Around: How the swaps that were supposed to save Illinois millions became toxic.”