Sullivan Seeks to Refinance State Debt
State Senator John Sullivan plans to try again to get approval of his plan to refinance the state's massive backlog of bills.
The Rushville Democrat said the state must pay its vendors in a timely manner. He said it also has a duty to reduce its debt.
He said, “I'm working with my colleagues, talking to them about, at least, if we can't do the full amount let's look at something less that makes sense.”
He said the state is paying 12% interest to the vendors it owes. He said the state could issue new bonds at about 4% interest and use the money to pay the vendors. The interest difference would save the state millions of dollars.
Sullivan introduced a similar measure last year to refinance the state's debt. It failed to garner widespread support in the legislature. This time, Sullivan said, he would, work for paying off part of the debt, if not the whole amount owed vendors.
The plan was criticized as new debt for the state. Sullivan insists the bond issue would restructure exisiting debt and would not create new debt.
He estimates the state is paying 12% interest on a third of its bills.