Faced with more than $4 billion in unpaid bills, the Quinn administration is turning to Wall Street with a novel way to get the money, as traditional borrowing methods may be drying up.
The Illinois approach works like this: Investors take over the delinquent bills owed by the state to its vendors. Those vendors are due a 1% penalty each month after the state falls behind by 60 days. The financial investors make the vendors whole and are entitled to 1% monthly penalties until the state pays the investors back.
Borrowing is what got Illinois into this mess, so what is the answer? Create a new way of borrowing. But this should make politicians happy, because they can claim that they're not really borrowing, just being creative with cash management.