* AP Chicago…
Days ahead of Gov. Pat Quinn’s State of the State address, his budget director has sent lawmakers a letter detailing “encouraging” developments on Illinois’ billions in unpaid bills.
The Sunday letter says the backlog will be $5.6 billion by fiscal year’s end, down from roughly $10 billion. Budget chief Jerry Stermer says if progress continues Illinois will be in line with “private-sector benchmarks.” […]
A budget spokesman says there isn’t a connection between the letter and Quinn’s Wednesday speech. He says Quinn will later outline budget issues.
It’s AP Chicago, and it’s a quickie Sunday story, so those unfortunate realities make this story worth a closer look to see if it’s actually true.
* From Stermer’s letter…
I am writing to you today with encouraging news. Over the past five years we have worked together and made progress on many critical issues, from reforming our pension systems to overhauling Medicaid, and we have made tough choices and focused on policies that drive our economy forward. Thanks to this collaboration, we are projecting that the state’s backlog of bills will be down to $5.6 billion at the end of this fiscal year. That is more than 43 percent lower than the $9.9 billion backlog at the peak of the recession. […]
If the outstanding bills are paid down – and not allowed to pile up again – the amount of bills making their way through the state’s payment system in any 30-day period ($3 billion or 10 percent of the state’s general-funds budget) will be in line with private-sector benchmarks. Thank you for your collaboration and feel free to contact me with questions.
* But if you look at the accompanying charts, you’ll see that the governor’s budget office actually projects that the bill backlog will be about $400 million higher at the end of this fiscal year ($5.6 billion) than it was at the end of last fiscal year ($5.2 billion).
And this is old news. At the end of March, 2013, the backlog stood at about $9.1 billion. It dropped to $5.5 billion by the end of April, 2013. It’s stayed pretty much constant since then, rising a little, falling a little, rising a little. It was as low as $4.7 billion last July, and stood at $6.4 billion by the end of this past December.
So, why tout this old news? Well, despite the denials above, this is all about setting the stage for the governor’s State of the State address. He’ll probably outline some grand new ideas and he needs to show that, fiscally, things are looking up.
In reality, it looks like the state did a good job last April paying down bills, but they remain stubbornly high now and in the foreseeable future. The budget office says they were “conservative” with their end of fiscal year projections, but it is what it is. The pile was reduced nine months ago, and it’s remained at about the same height ever since.
* Meanwhile, along those same lines, Gov. Quinn’s office touted some new pension numbers…
The Quinn administration highlighted another part of the new estimates: if the pension law withstands a legal challenge from unions, the state will see its $100 billion pension debt immediately drop by about $24 billion instead of the previous $21 billion estimate. The better-than-expected projection is being driven by last year’s improved performance of the billions of dollars the pension funds have invested.
New calculations show the state will save about $15 billion less than initially projected from the controversial major government worker pension overhaul that lawmakers and Democratic Gov. Pat Quinn approved last month. […]
Last month, House Speaker Michael Madigan championed the pension overhaul as saving $160 billion over 30 years. But when the financial minds at the pension systems covering state workers, teachers outside Chicago and public university employees took a look, the savings estimate came out to $145 billion.
The full report that the story is based on can be accessed by clicking here.
* Quinn sure to tout pension deal in State of the State
…Adding… The Tribune has changed “The Quinn administration highlighted another part of the new estimates” to “Legislative supporters highlighted another part of the new estimates.”
Can’t speak for the Tribbies, but the Quinn administration is pointing at those unfunded liability numbers behind the scenes.