What’s in a backlog?
Monday, Nov 25, 2013 - Posted by Rich Miller
* From an SJ-R story on the state’s bill backlog…
[Comptroller Judy Baar Topinka’s spokesman Brad Hahn] said that a strong tax season this year allowed the office to “aggressively pay down bills” in April and May. By the end of May, the backlog was down to $5.8 billion and vendors were waiting a minimum of two months to be paid, half what they were waiting at the start of April.
That was, however, the high-water mark in the state’s efforts to pay bills on time. By the end of June, also the end of the state’s fiscal year, the backlog was sitting at $6.1 billion.
By Oct. 1, the backlog was up to $7.5 billion, including bills being held in state agencies prior to being given to Topinka’s office for payment. And as of late last week, the total was at $8.8 billion — an even higher number than at the start of April.
Hahn said the office believes the total will hit $9 billion by the end of December, exactly where Topinka predicted it would be last summer. It is the second year in a row the backlog will sit at about $9 billion at the end of the calendar year.
* Drudge had a little fun at Illinois’ expense today…
* But let’s define “backlog,” shall we?
According to the comptroller’s office today, $4.6 billion of that $8.8 billion “backlog” is less than 30 days old. I’m not sure how that can be defined as old bills.
Also according to the comptroller’s office, $1.6 billion of those bills are between 30-60 days old, so that’s not terribly horrible. But, $2.6 billion in invoices have surpassed the 60-day mark since the comptroller received the payment paperwork.
Yes, the trend is not good. But the problem isn’t as bad as reported.
- wordslinger - Monday, Nov 25, 13 @ 12:43 pm:
To me, it’s not a backlog til the juice kicks in. Thirty days from invoice is pretty standard in business.
- downstate hack - Monday, Nov 25, 13 @ 12:55 pm:
Does it really matter how it is reported, the bottom line is the State is broke, yet the legislative branch and the Governor has done nothing to really produce a truly balanced budget in this State for years.
- Bogart - Monday, Nov 25, 13 @ 1:00 pm:
downstate - I would not call raising our income tax from 3 to 5% “nothing” but if you meant any serious discussion on spending cuts, I agree “nothing”.
- steve schnorf - Monday, Nov 25, 13 @ 1:34 pm:
Good point, Rich. There are two parts to a backlog, how much and how long. We will move in the wrong direction for another 120 days or so but we almost always do at this time of the year.
- thechampaignlife - Monday, Nov 25, 13 @ 1:48 pm:
===I’m not sure how that can be defined as old bills===
Does that less than 30 days number include time spent being held at the agency or just time time spent at the comptroller?
Why are they held at the agency, anyway? Does interest not start until it hits the comptroller’s office?
- Ahoy! - Monday, Nov 25, 13 @ 1:49 pm:
I don’t believe this covers medical bills for employees which I believe is running over 300 days old.
- anonymouse - Monday, Nov 25, 13 @ 2:03 pm:
@Ahoy-I was told by a state retiree friend who lives in Fl that Cigna advised him he should be paid for his knee replacement surgery of Sept ‘12 maybe by Dec 2013. Florida Hosp. demanded payment up front.
- Demoralized - Monday, Nov 25, 13 @ 2:22 pm:
==Does interest not start until it hits the comptroller’s office? ==
The time clock for a bill starts when an agency receives the bill. Interest isn’t due until the bill is more than 90 days past due.
==Why are they held at the agency, anyway?==
Some are “held” because it takes time to process them at the agency. Others are held because there isn’t enough appropriation to pay for them.
- Downstater - Monday, Nov 25, 13 @ 2:49 pm:
“Yes, the trend is not good. But the problem isn’t as bad as reported” It’s only bad, if your someone waiting on the check to pay a bill.
I know, business people who are waiting months for their checks and have to make payroll. Their alternative. Go to the bank and borrow money.Rich, I would assume you would have no problem in not getting paid for 60 days or more for your work. I know, business people who are waiting months for their checks and have to make payroll. So, it is a big deal.
- walkinfool - Monday, Nov 25, 13 @ 3:10 pm:
JBT is smart and sensible.
Given the press’ ineptitude with numbers, and desire to show the worst possible picture — JBT should lead or headline her press releases on payables with the 30-day+ figure as “past due” (many companies only point out the 60+ accounts as worth mentioning), and then note the 90+ accounts which will incur interest penalties.
Those two numbers would make the most sense to the public. The rest of the numbers are not of much interest, and don’t need to be called out by her, even if they are required to be officially reported.
- thechampaignlife - Monday, Nov 25, 13 @ 3:27 pm:
===Others are held because there isn’t enough appropriation to pay for them.===
Wow, I didn’t realize agencies could obligate the State to spend money without the funding to pay for it. That seems like a poorly designed system. Theoretically, the funding could never come through and then a court would have to order payment for something the GA may not have wanted purchased. I know this doesn’t happen in practice but still…what exactly does the procurement code regulate if not that you have to have the money to spend before you spend it?!
- Demoralized - Monday, Nov 25, 13 @ 3:28 pm:
@Downstater:
You completely failed to grasp Rich’s point. He didn’t say it wasn’t bad. He said that the number reported as “bad” isn’t really as high as what is reported. Honesty is the best policy.
- Rich Miller - Monday, Nov 25, 13 @ 3:29 pm:
=== I didn’t realize agencies could obligate the State to spend money without the funding to pay for it. ===
You read too much into the other comment.
- Demoralized - Monday, Nov 25, 13 @ 3:29 pm:
@thechampaignlife :
Medicaid frequently has more bills than appropriation to pay for them.
- 100 Miles West - Monday, Nov 25, 13 @ 3:36 pm:
Maybe my memory is getting bad, but the current backlog is bigger, but not as bad as the early nineties when boxes and boxes of unpaid bills were stacked everywhere at Public Aid. Many local pharmacists were forced to sell out or close their businesses.
- Formerly Know As... - Monday, Nov 25, 13 @ 4:02 pm:
The standard for measuring the “backlog” has remained fairly constant for years.
A quick check of old posts indicate that media, politicians and commenters have used the term at least as far back as 2006, if not earlier.
From 2008, for example: “Hynes said the state is entering an “extraordinarily challenging period” because it failed to prepare for an economic downturn as it struggles to pay a backlog of bills.” https://capitolfax.com/2008/02/13/dont-look-now/
Or a 2006 JBT press release: “Even State Comptroller Dan Hynes - a Democrat - says Illinois backlog of unpaid bills is at an all-time high. Illinois is in that bad of fiscal shape, even though Blagojevich raided more than $2.2 billion from pension funds and borrowed more money than any Governor in Illinois history” https://capitolfax.com/2006/08/17/jbt-outlines-37-billion-in-cuts-over-4-years/
Generally speaking: if we owe it, we owe it.
The interesting thing, however, is that those bills don’t appear to be generally referenced as a “backlog” in common parlance until they really began piling up in early-mid 2000. Before then, they were mostly just referred to as the bills we owed, sans “backlog”.
In other words, it is not the means of measuring those bills that has changed. It is the amount owed on those bills that has changed.
Once we pay the total down again, or get all the payments back down to no more than roughly 30 days late, use of the term “backlog” and attention to the issue will gradually fade.
Until then, good luck to all of us.
- thechampaignlife - Monday, Nov 25, 13 @ 4:05 pm:
===You read too much into the other comment.===
===Medicaid frequently has more bills than appropriation to pay for them.===
Ah, so this is more like Medicaid claims that don’t have funding. That seems more reasonable than the “Let’s buy a new building!” situation I thought it meant. So does the backlog include other unfunded obligations like back pay for raises?
- Formerly Know As... - Monday, Nov 25, 13 @ 4:15 pm:
@100 Miles West - your memory does not deceive. The backlog hit numerous agencies and service providers around the early-mid 90’s.
Things got back to reasonable levels in the late 90’s, but then started slipping again in 2001. The snowball has continued rolling downhill since, albeit with a few ups and downs. Some useful context and background, should you care to read it:
www.pontiacdailyleader.com/article/20130504/NEWS/130509602/1006/NEWS?template=printart
www.ioc.state.il.us/index.cfm/resources/comptrollers-quarterly/edition-1-september-2001-slow-1st-quarter-revenues-exacerbate-cash-flow-problems/
- Demoralized - Monday, Nov 25, 13 @ 4:35 pm:
==So does the backlog include other unfunded obligations like back pay for raises?==
No, it would not include those.
- JI - Monday, Nov 25, 13 @ 5:40 pm:
Rich, did you answer the earlier question about what’s included in the voucher age? Saw a later comment, but might have missed your response somewhere.
Does this count only the time the voucher sits at the comptroller? Or does it also include the time spent at the agencies?
If it doesn’t include agency wait time, I’m not sure how valuable it really is, as it would essentially ignore all of the Section 25 loophole bills.