If the Illinois financial picture looks grim now, just wait until a recession, which will happen sooner or later.

That’s the warning from a Standard & Poor’s analyst who reviewed the Illinois’ fiscal outlook as the state gets ready to borrow more than a billion dollars next week.

News of the state’s plan to borrow, by selling bonds, triggered a downgrade from S&P last week. It’s the second downgrade for Illinois this year, to the lowest rating S&P has assigned any state in the last 30 years. 

Part of the logic: Since the last time S&P reviewed the state’s credit, Illinois has actually racked up a billion dollars in new debt — to its vendors. At the end of June, the state had $7.7 billion in unpaid bills, according to figures from Comptroller Leslie Munger’s office. By early October, that figure had climbed past $8.7 billion.

That amounts to tacking on debt through a kind of back-door.

“The end result is a false sense of security … and there’s no consequence,” said John Sugden, a senior director at S&P.

He said Illinois is digging itself a deeper hole at a time when the national economy is in relatively good shape.

“We’re not necessarily forecasting a recession at this point,” Sugden said. “But at some point we’ll have a recession.”

When that happens, tough choices — like raising taxes and cutting government services to pay debts — become tougher.

“When we go through a recession, the state loses billions of dollars in cash-flow,” said Richard Ciccarone, president of Merritt Research Services.

Tax revenues go down because people and businesses have less income to pay tax on, and spending on services for the poor goes up, because more people are poor.

At the height of the last recession the state lost $6 billion a year, Ciccarone said.

“That’s a huge number,” he said. “We can’t afford a $6 billion decline in cash-flow.”

Dan Weissmann is a staff reporter for WBEZ. Follow him @danweissmann.