Today’s number: $700 million
Monday, Jan 30, 2017 - Posted by Rich Miller
* Tribune…
The state has a record stack of unpaid bills that’s expected to hit $15 billion by July if nothing is done, and it must fork over interest when it’s late paying them. Putting a hard dollar figure on those interest costs is difficult, however.
A bipartisan budget-forecasting group says the state owes at least $370 million alone in interest on bills for state employee health care during the 18-month stalemate. The Democratic comptroller’s office estimates the state will have to pay $700 million on interest based on what it’s spending in the current budget year, a number more than twice the state’s previous high water mark. The Republican governor’s budget office declined to provide any estimate, saying it “cannot speculate” on future costs. […]
Rauner’s office has declined to put a figure on what the state will owe in interest due to the impasse. And until early December, Rauner was able to make that stick because the comptroller, Leslie Geissler Munger, would not provide an estimate either. Rauner appointed Munger to the job, but she lost to Democrat Susana Mendoza in the November election.
Mendoza’s office puts the state’s interest costs from this year’s budget at $700 million, acknowledging the ultimate figure is a “moving target” depending on how much more the state spends in the coming months.
The estimate is based in part on last year’s spending, when state government operated without a full budget but continued to spend money based on court orders, laws and spending agreements. Illinois is in a similar position this year, as a temporary six-month budget expired with the new year, once again leaving universities, social service providers and prisons without funding.
Not that I’m all that confident about this particular comptroller’s projections, but the governor’s budget office does cost projections all the time, so it’s kinda weird that they won’t do projections on this topic.
Every year, for instance, it has done a five-year cost and revenue projection. It also projects costs in every budget it puts together. And it only recently projected next fiscal year’s cost for the Senate’s grand bargain.
- Precinct Captain - Monday, Jan 30, 17 @ 11:12 am:
It is more than “kinda weird” that Rauner’s GOMB can’t come up with basic projections for interest payments. And their even weirder statement that they “cannot speculate” on future costs logically applies to their quest to invalidate the so called ‘grand bargain’ and whine constantly about health insurance and worker’s compensation insurance.
- Last Bull Moose - Monday, Jan 30, 17 @ 11:24 am:
As the reality worsens it becomes more important to hide facts and honest estimates.
- wordslinger - Monday, Jan 30, 17 @ 11:26 am:
–…so it’s kinda weird that they won’t do projections on this topic.–
It’s not weird at all. The projected new revenues of the Turnaround Agenda does not even cover the juice, much less the principle, on the increased backlog of bills.
Hard to keep your reputation as a “fiscal conservative” among some Chicago media types if that news gets around.
- RNUG - Monday, Jan 30, 17 @ 11:26 am:
The Governor’s office isn’t going to give Rich any numbers … because he actually reads them and does the math.
- Finally Out - Monday, Jan 30, 17 @ 11:46 am:
The interest amount has to be huge. As an example, I was just reimbursed a couple of weeks ago for dental work done in the fall of ‘15. Last week I received the interest check for $130.42! One claim for one person over a year old. We need a budget!
- Sir Reel - Monday, Jan 30, 17 @ 11:48 am:
Remember, this $700 million or whatever it is will be paid by taxpayers. What a waste.
- Anonymous - Monday, Jan 30, 17 @ 11:49 am:
“Rauner-controlled state agencies often hold on to vouchers for months before turning them into the comptroller’s office for payment, so how much the state will have to pay in interest this year depends on how much further Illinois falls behind on its bills.”
Clumsy attempt to minimize the deficit by the Frat Boys?
- Anon - Monday, Jan 30, 17 @ 11:51 am:
I’m sure there are many small vendors who don’t like going without payment for their work. But I’ll bet there are some big ones, probably friends of Bruce, who are enjoying the impasse for the interest. If someone billed the state for $100 million two years ago that’s about $18 million in profit at 9% per year.
- Steve - Monday, Jan 30, 17 @ 11:55 am:
The great moments of balanced budget provisions , in the state of Illinois.
- Blue dog dem - Monday, Jan 30, 17 @ 12:10 pm:
I wonder if their cost and review projections use declining populations.
- WhoKnew - Monday, Jan 30, 17 @ 12:15 pm:
- Last Bull Moose -
‘As the reality worsens it becomes more important to hide facts and honest estimates.’
I was gonna’say figures lie and liars figure, but your message is more on point!
- Earnest - Monday, Jan 30, 17 @ 12:22 pm:
A Governor who wanted a budget passed would be putting pressure on from a money perspective instead of touting accomplishing such as increasing state spending (schools). Wouldn’t be hard to post on a daily basis how much the lack of a balanced budget is adding to the ultimate cost to people of Illinois. That would have people focused on the passage of a balanced budget rather than who is speaker of one chamber of the legislative branch or to whom he gave clocks.
- PublicServant - Monday, Jan 30, 17 @ 12:27 pm:
===Rauner’s office has declined to put a figure on what the state will owe in interest===
Rauner’s office seems very adept at not putting figures on things…like his TA. He learned his lesson with Rich, I suppose.
- Menard Guy - Monday, Jan 30, 17 @ 12:29 pm:
Let’s see now, $700 million in interest to save $300 million in turnaround? Good lord, what have we allowed these people to do??
- P. - Monday, Jan 30, 17 @ 12:45 pm:
Just to get the editorializing part straight, the two-month-old comptroller’s office isn’t credible and the governor’s office is kinda weird since they are punting when it comes to critical budget stats resulting from the a crisis they have been steering for two years?
- Dan Johnson - Monday, Jan 30, 17 @ 1:03 pm:
Can we amend the Prompt Payment Act so the Fortune 500 companies who are owed lots of money don’t collect 18% interest a year? I appreciate the little guy could use the juice, especially to get a loan from one of these companies that have popped up, but the big guys really don’t need the interest. Maybe we only pay 18% on the first 20 million and after that we just pay the prime rate?
- Demoralized - Monday, Jan 30, 17 @ 1:18 pm:
==Rauner-controlled state agencies often hold on to vouchers for months==
==Clumsy attempt to minimize the deficit==
This isn’t a new thing, though it is much larger in scale than before. You can’t send a bill to the Comptroller for payment if there is no money to pay it. You have to hold it at the agency until there is money to pay it.
- Anonymous - Monday, Jan 30, 17 @ 1:18 pm:
Wife, a State retiree, just got reimbursement on a dental from June, 2015. Yes, 2015! Bill was $150: interest she got was about $22.
- CapnCrunch - Monday, Jan 30, 17 @ 1:52 pm:
“Can we amend the Prompt Payment Act so the Fortune 500 companies who are owed lots of money don’t collect 18% interest a year? …”
How about allowing the State retirement systems to purchase all these accounts receivable from vendors. The vendors get paid on time and the retirement plans earn the 18%. It’s as safe as buying US Treasury bills.
- Annonin' - Monday, Jan 30, 17 @ 2:00 pm:
Here is a surprise that seems to be missing from Tribbie piece. The amount of interest is in part tied to who gets into the vendor assistance and when
- Dan Johnson - Monday, Jan 30, 17 @ 2:17 pm:
Great idea CapnCrunch, but it’s still taxpayers shelling out money we don’t need to.
- CapnCrunch - Monday, Jan 30, 17 @ 2:55 pm:
You’re right Dan. But as long as this mess exists the $$ at least are going to help pay a debt that taxpayers are ultimately responsible for rather to the pockets of private investors. And we get the economic effect from the circulating $$.
- Rabid - Tuesday, Jan 31, 17 @ 7:26 am:
Tax boost Bruce will have quite a record to run on for reelection