* I asked the comptroller’s office last week to explain the state’s pile of unpaid bills. This is most of what I received via e-mail on July 18th…

(W)e have a General Funds backlog here of $5 billion and we estimate there is another $1.8 billion in the HIRF. So the overall backlog has actually had an uptick to around $6.8 billion.

When the Comptroller gives backlog estimates, she is talking about the unpaid bills being held by the state - not using a technical term “past-due.”

We started the day with unpaid vouchers totaling $3.829 billion in the General Revenue Fund.

In addition to the $3.829 billion backlog in the General Revenue Fund, there is another $1.1170 billion in the School Funds for a total General Funds Backlog of $4.999 billion.

Our oldest regular voucher is 25 June 2013, those vouchers are 16 working days in arrears.

Our oldest medical voucher is 17 June 2013, those vouchers are 21 working days in arrears.

I was also told last week that “Nothing in GRF is older than 30 days.”

* But here’s an example of how the official backlog doesn’t mean that there are no extremely past-due obligations…

Though state aid to the public school system has dwindled in recent years, that alone does not paint the whole picture of districts’ financial woes. Some school districts are waiting on grant money that is in some cases is six months late.

Grants and other “categorical” funds for school functions such as transportation and special education are a part of the $6.8 billion backlog of unpaid bills in Illinois. Without the funds, districts are being forced to tap into other funds and put an even larger strain on their tax levies.

* Meanwhile, this is from a recent Washington Post editorial…

A new survey by scholars at Boston College finds that state and local pension plans have $3.8 trillion in unfunded liabilities, even assuming strong rates of return.

That sentence was eventually corrected…

A new survey by scholars at Boston College finds that state and local pension plans have $3.8 trillion in liabilities, $1 trillion of which is unfunded.

* The mistake was initially caught by Dean Baker at the Center for Economic and Policy Research, which puts the problem into perspective…

)(T)o put this in terms that may be understandable to Post readers, the unfunded liabilities are 0.22 percent of projected GDP over the next 30 years. And, as I noted in my earlier post, most state and local governments are already funding at levels that are consistent with making up this shortfall so there will no required tax increases or spending cuts to meet these future obligations.

* Paul Krugman added his two cents…

But how big is that $1 trillion anyway? It still sounds like a big number, doesn’t it? Dean tries to compare it with projected GDP, which is one way to scale it. Here’s another.

You see, the Boston College study doesn’t just estimate assets and liabilities; it also estimates the Annual Required Contribution, defined as

normal cost – the present value of the benefits accrued in a given year – plus a payment to amortize the unfunded liability

And it compares the ARC with actual contributions.

According to the survey, the ARC is currently about 15 percent of payroll; in reality, state and local governments are making only about 80 percent of the required contributions, so there’s a shortfall of 3 percent of payroll. Total state and local payroll, in turn, is about $70 billion per month, or $850 billion per year. So, nationwide, governments are underfunding their pensions by around 3 percent of $850 billion, or around $25 billion a year.

A $25 billion shortfall in a $16 trillion economy. We’re doomed!

OK, there are some questions about the accounting, mainly coming down to whether pension funds are assuming too high a rate of return on their investments. But even if the shortfall is several times as big as the initial estimate, which seems unlikely, this is just not a major national issue.

* It’s still obviously a local issue, however. But the constant comparisons between Detroit and Chicago/Illinois need to stop…

Elizabeth Foos, municipal credit analyst at Morningstar Inc., said Chicago is seeing a job rebound in areas such as a banking, financial services, transportation and health care.

By some gauges, Detroit barely functions. Foos said 40 percent of the city’s streetlights don’t work and more than half of property owners didn’t pay taxes owed in 2011.

Debt levels: Chicago’s property and sales tax revenues are improving with the economy and the city’s debt load is manageable. Foos has published reports on both cities indicating that if their debts are compared to the taxable value of their property, Detroit’s burden is more than twice that of Chicago.

Population: Detroit has lost 60 percent of its population since its 1950s peak. For the first decade of the 21st century, Detroit was down 25 percent. For the same time periods, Chicago lost 25 percent and 7 percent of its population.

* In other news, this is from a press release…

Illinois Department of Human Services (IDHS) Secretary Michelle R.B. Saddler today announced that the state was awarded a $4.1 million bonus for its effective administration of the Supplemental Food and Nutrition Program (SNAP). Illinois was recognized for its accuracy rate of 98.3 percent, which ranked sixth in the nation in fiscal year 2012.

That’s a pretty darned high accuracy rate, but not good enough for some folks…

Since Illinois has seen an explosion in the number of people receiving food stamps, even a slight error costs taxpayers millions.

In this instance, a mistake rate of less than 2 percent means $50 million is misspent.

That’s the hard truth behind the press release lauding Illinois for having a 98.3 percent accuracy rate for its Supplemental Nutritional Assistance Program. […]

“The more people you add and the bigger the program gets, the more cumbersome it gets. The more difficult it gets to manage. And you have money being given away that shouldn’t be given away,” said Ted Dabrowski, vice President of policy for the Illinois Policy Institute.

Dabrowski’s point doesn’t make a whole lot of sense. The state has a pretty darned high accuracy rate as the program increases in size.

* Related…

* Illinois Comptroller Talks to Not-For-Profits About Budget: “We have taken all of our not for profits and we’ve moved them up. So when it comes to money in the till we’re going to pay you first,’ said the Comptroller.

* Sole buyer in state vendor program says business is good: Although VAP has been in the program since its inception, Reape said it has only really ramped up in the past six months. He said the company has purchased about $130 million worth of receivables from more than 100 vendors.