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*** UPDATED x1 *** State complies with court order on DD payments

Friday, Aug 28, 2015

* From Ed McManus…

The State of Illinois now says that it has paid providers for July and August developmental disability services–a total of $120 million. Late this morning, attorneys for the Rauner administration and comptroller Leslie Munger complied with U.S. District Judge Sharon Coleman’s order, which was issued Wednesday after attorneys for the people with disabilities asked her to hold state officials in contempt of court.

“As of Aug. 28, the Department of Human Services has processed all vouchers for community-based services . . . that would have been provided in July and August 2015″ on the same schedule as in previous years,” the lawyers for the state said, and “as of Aug. 28, the comptroller has paid all of the vouchers.” (State’s filing attached)

Ed McManus, a Wilmette-based consultant to many of the providers, said it is good news. “But we never should have had this payment crisis in the first place,” McManus said. “These agencies serving some of the state’s most vulnerable residents have waited two long months, ever since the new fiscal year began July 1, providing group-home and home-based services without getting paid a nickel. Many of them had exhausted their reserves and maxed out their lines of credit, and they were on the verge of collapse, which would have left the thousands of people they serve homeless. What kind of a state do we live in, where our government would allow this to happen?”

Attorneys for the state said between Aug. 18 and 27, the comptroller has made $786 million in payments to entities not covered by the Ligas consent decree–including state employee payroll, debt service, aid to schools, state retirement systems, child care, foster care and Medicaid providers. Details of those payments were submitted to the judge.

“The payments in this case do not exist in a vacuum,.” the state said. “They compete against the state’s other obligations, many of which are also covered by court orders. The state is operating at a deficit of a minimum of $300 million per month to make payments necessary to cover all of the state’s priority obligations. . . . Because of the state’s cash flow problems, the comptroller must evaluate on a daily basis the amount of cash on hand and determine which payments may be made. While the state will continue to diligently process payments to providers under the Ligas consent decree, it is not possible for the state to commit to making each of many specific payments on specific days.”

State officials face “extraordinarily difficult circumstances posed by the state’s current budget crisis and cash-flow problems,” the lawyers said, and therefore the judge should deny the request for a contempt order. Also, the judge should “clarify that compliance does not mean doing the impossible.”

The state had said at a court hearing Wednesday that $76 million in bills had been paid. The additional $44 million was paid since Wednesday, they said.

* From the state’s filing, which is here

Per this Court’s August 26 Order, a list of payments the Comptroller has made since August 18 to entities not covered by this Court’s June 30 and August 18 Orders is provided in Exhibit B and the attachment thereto.

In broad terms, between August 18 and August 27, the Comptroller has made $786.4 Million in payments to entities not covered by this Court’s June 30 and August 18 Orders.

Of this amount, approximately $194 Million was for State employee payroll per court order, $101.8 Million for debt service, $188.4 Million for General State Aid to schools for K-12 education, $233.7 Million for State retirement systems, $8.2 Million for child care, $0.7 Million for foster care per court order, and $10.6 Million for payments to Medicaid providers per court order.

*** UPDATE *** “Exhibit B” can be read by clicking here.

- Posted by Rich Miller        

  1. - Precinct Captain - Friday, Aug 28, 15 @ 1:59 pm:

    Superstar management!

  2. - Oswego Willy - Friday, Aug 28, 15 @ 2:03 pm:

    The fact that the Executive Branch of Illinois’ government is in front of a Federal judge and… dragging into this… another constitutional office… to reassure monies are paid, not because a budget is passed, but a court order is followed isn’t a successful way to run an Administration.

  3. - Politix - Friday, Aug 28, 15 @ 2:08 pm:

    Headlines of the Future: Rauner forced by courts to support developmentally disabled

    Doesn’t bode well for that presidential campaign.

  4. - Thoughts Matter - Friday, Aug 28, 15 @ 2:16 pm:

    If we only had a budget. The administration is the one using the Turnaround Agenda as the prerequisite to a budget. As OW says, they own this publicity mess. Get the budget- worry about the Turnaround Agenda afterwards. Stop concentratin’ on the evil unions, evil state employees, and evil Madigans.

  5. - PublicServant - Friday, Aug 28, 15 @ 2:18 pm:

    ===the judge should “clarify that compliance does not mean doing the impossible.”===

    I agree. Compliance can not mean doing the impossible. The judge, might just show the state how possible it is by implementing increased revenues. The state ought to be very careful telling a judge to clarify a ruling in that doing so might just open the door for judicially improved tax increases to make sure adequate revenues are available to pay court-ordered payments.

  6. - Salvador Dali - Friday, Aug 28, 15 @ 2:18 pm:

    Just not enough money. It’s math. This calamity has been years in the making and all the smart folks know that. The coming pain is inevitable for all of us. We can only hope that a few smart, courageous altruistic folks step up and guide us through this mess to the other side………from the perspective off all the people of the state , rather than a continuation of competing special interests trying to maintain the status quo at the expense of everyone else.

  7. - PublicServant - Friday, Aug 28, 15 @ 2:19 pm:


  8. - Big Muddy - Friday, Aug 28, 15 @ 2:20 pm:

    So we have a 3.6 billion dollar per year structural deficit (300m x 12) and The courts say keep spending? Goodbye Illinois, it was good to know ya!

  9. - Jack Stephens - Friday, Aug 28, 15 @ 2:25 pm:

    @big muddy

    Yeah probably cheaper to put them in an IDOC facility….save the taxpayers some dough!


  10. - The Dude Abides - Friday, Aug 28, 15 @ 2:29 pm:

    @Big Muddy, you are being overly dramatic. Illinois’s problems can be fixed and we can be put back on the right track. The legislature has some ideas that if implemented, will get us moving back in right direction again. What is missing is political will. The biggest problem is a Governor that will not discuss moving forward until he extracts big concessions that will have ill effect on middle income workers. So far the Democrats aren’t willing to throw many in the middle class under the bus.

  11. - Anonymous - Friday, Aug 28, 15 @ 2:36 pm:

    Munger dismissed the opinion from Frerichs’ office as ridiculous. “I wish he had contacted us before making such an absurd statement…” Who looks ridiculously absurd now, Ms. Munger? Seems like the money was there all along. Did someone hide it? Where did you find it? Under Rauner’s pillow?

  12. - A guy - Friday, Aug 28, 15 @ 2:51 pm:

    New receipts come into the state every single day. It’s possible and even probable that a couple of days make a huge difference i.e. I’ll catch up with you on payday.

    The state is maxed out on it’s credit cards and living paycheck to paycheck to keep up. Ms. Munger is the latest to have to deal with this mess, but she’s certainly not the cause of it. The cause is upstairs from her office on both the second and third floor.

  13. - zatoichi - Friday, Aug 28, 15 @ 2:52 pm:

    After the election, who asked that the income tax rate be allowed to drop to 3.75% on Jan 1, 2015 because he would be able to manage the budget and increase the funding for K-12 education?

  14. - Oswego Willy - Friday, Aug 28, 15 @ 2:53 pm:

    - A Guy -

    Ounce of Prevention might want you yo call Gov. Rauner on that fault thing…

  15. - A guy - Friday, Aug 28, 15 @ 2:59 pm:

    Willy, give’em my contact info. I’ll do what I can to offer a Pound of Cure.

  16. - is it just me? - Friday, Aug 28, 15 @ 3:02 pm:

    Any additional info on the $3.8 million expenditure/receipt transfer to “Correct an error”??

  17. - is it just me? - Friday, Aug 28, 15 @ 3:03 pm:

    that error is reference on page 7/
    the spreadsheet

  18. - Rich Miller - Friday, Aug 28, 15 @ 3:05 pm:

    ===Any additional info on the $3.8 million expenditure/receipt transfer to “Correct an error”?? ===

    Did they finally catch up on all my overdue subscription payments?


  19. - The Velour Nail - Friday, Aug 28, 15 @ 3:05 pm:

    Funny how the prospect of a day in the pokey makes judgment debtors just find money . . . .

  20. - Oswego Willy - Friday, Aug 28, 15 @ 3:07 pm:

    - A Guy -

    I think they just want you to call the Governor’s Office and tell them to get to work kinda thingy.

    You can cut out the middle man (Ounce) and just call like they suggest…

  21. - Buzzie - Friday, Aug 28, 15 @ 3:14 pm:

    When will the Governor learn that his rhetoric and personal wealth cannot hide is politically incompetent actions?

  22. - Michelle Flaherty - Friday, Aug 28, 15 @ 3:25 pm:

    A fitting final day for Ms Arduin.

  23. - Rod - Friday, Aug 28, 15 @ 3:29 pm:

    I am pleasantly surprised that the Rauner Administration did not try to take the non-payment issue up to the 7th Cir Court of Appeals. I suspect even Rauner’s lawyers/advisers figured that would be a loser.

  24. - rural observer - Friday, Aug 28, 15 @ 3:33 pm:

    To “A Guy” New receipts every day huh? Yeah, that’s it, new receipts. Comptroller didn’t have a clue what the cash flow was. Couldn’t anticipate diddle. She must be another Rauner “Superstar”. Pure coincidence that the new receipts came in just as a federal judge was contemplating contempt citations. Wow, weren’t we lucky! Got a bridge in New Jersey I would like to sell you too.

  25. - A guy - Friday, Aug 28, 15 @ 3:39 pm:

    rural, I’m not sure you know exactly how the money flows there. 2 days makes a difference. I seriously doubt you have a bridge anywhere. I can believe you live under one though.

  26. - JS Mill - Friday, Aug 28, 15 @ 3:46 pm:

    =So we have a 3.6 billion dollar per year structural deficit=

    That number isn’t even close to the reality. The number changes, but the last I heard the backlog of unpaid bills was hovering around $5 Billion. Neither the Governor’s nor the Democratic budgets account for that. You have to add that in to their “unbalanced” and come up with something that is actually north of $8 billion. That is your actual deficit. Ugh.

    If anyone knows the current backlog number please jump in and fix my math.

  27. - Jay R - Friday, Aug 28, 15 @ 3:50 pm:

    I’ll take “It’s all Mike Madigan’s Fault” for $100 please.

  28. - Mama - Friday, Aug 28, 15 @ 3:53 pm:

    I want to know where the money (that they didn’t have before the judge’s order) came from to pay DD. I hope it didn’t come from the pension funds.

  29. - Juice - Friday, Aug 28, 15 @ 4:45 pm:

    Rich, if you cancelled all of the State subscriptions because of lack of payment, maybe that would be the catalyst to get the various parties to get past this impasse.

  30. - sal-says - Friday, Aug 28, 15 @ 4:45 pm:

    The Tribbies have a story @ 4pm Friday, headline:
    “Rauner administration to judge: ‘Impossible’ to hit payment deadlines”

    Continuing: “Attorneys representing Gov. Bruce Rauner’s administration and the state comptroller told a federal judge Friday that it is “impossible” to comply with a court-ordered timeline for making payments to providers who care for the disabled because of a cash flow problem caused by the budget stalemate…”

    Geez. Maybe the Governot’s so-called ‘administration’ might just do a teeny bit to resolve the ’stalemate’ the Governot created? And actually take SOME responsibility?

    Yeah, I know, too much to expect.

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