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Mendoza releases school funds, warns about growing interest on $15 billion bill backlog

Thursday, Sep 7, 2017

* Comptroller Mendoza…

Just after midnight Thursday morning, Comptroller Susana Mendoza’s office began transmitting $541 million in General State Aid to schools around the state. These are the funds that were supposed to go out on August 10th and 20th, but were delayed because the Governor vetoed the School Funding Bill.

The next payment of $264 million will go out tomorrow, Friday, to cover the first September payment due Sunday, Sept. 10. That means a total of $805 million will be going out to schools this week.

“I am grateful legislators were able to forge a bipartisan compromise to allow passage of the school funding bill which finally puts the state on a path to equitable school funding,” Comptroller Mendoza said. “The start of the school year should be about kids happy to see their classmates again and resuming the learning process — not worries about whether schools will have to close midyear. Parents, children and teachers can finally have the confidence and peace of mind to know that their schools will not only open on time, but more importantly, stay open for the full academic year.”

* Comptroller Mendoza…

Two months ago today, the General Assembly authorized Governor Bruce Rauner to refinance a portion of Illinois’ $15.4 billion bill backlog.

Two months later, his inaction on this common-sense budget mandate has cost taxpayers at least $120 million. Currently, the state is paying up to 12 percent interest on a large portion of its bill backlog at a cost of $2 million a day in late payment interest penalties.

This simple, bipartisan refinancing provision is no different than when a homeowner swaps out a higher mortgage rate for a lower one, but we have yet to see any movement on it from the Governor’s Office, Comptroller Susana Mendoza said Wednesday.

“Over 12 years, this refinancing plan will save taxpayers between $6 billion and $8 billion, or between $550 million and $650 million annually. Right now, we’re paying $2 million dollars a day for the Governor’s inaction,” she said. “This is money that will never go toward early education, to our public universities, toward job creation, or to our struggling social service providers. Stalling on the bonds is fiscally irresponsible and taxpayers should be outraged.”

By law, the refinancing must be applied to the state’s bill backlog. It will give relief to not only taxpayers, but also thousands of service providers and businesses awaiting payment from the state. Over the past two years without a budget, many entities owed money by the state have had to exhaust their lines of credit, lay off employees, turn away Illinois citizens in need of services and, in some cases, close for good.

Last week, the Comptroller visited the Orthopaedic Institute of Southern Illinois in part because they are owed about $6 million from the Group Health Insurance program that covers public employees, including university employees.

The state’s backlog of bills is about $15 billion. Of that, about $5 billion are bills from group health. Those bills, along with other medical bills, incur some of the highest late interest penalties.

“Three days’ worth of late payment interest penalties could pay off the Group Health Insurance bills owed to the Orthopaedic Institute of Southern Illinois,” Comptroller Mendoza said. “Until Governor Rauner moves to refinance this debt, Illinois is burning money that could be used to pay businesses and providers what they are owed and inject stability into the Illinois economy.”

* Related…

* Illinois Officials Push Governor Rauner to Sell Bonds to Cut Unpaid Bills

* Illinois Democrats: Borrow money for past due bills

- Posted by Rich Miller        

14 Comments
  1. - Red Rider - Thursday, Sep 7, 17 @ 9:32 am:

    Ok let’s go to China and Japan, when I get back we will talk about it.


  2. - Ward Heeler - Thursday, Sep 7, 17 @ 9:37 am:

    Can Comptroller Susana Mendoza sharpen a pencil or use a paper clip to fasten sheets of paper together without issuing a press release?


  3. - igotgotgotgotnotime - Thursday, Sep 7, 17 @ 9:41 am:

    Occam’s razor tells us the Governor is invested in the ruin of the state, not it’s fiscal health.


  4. - Everybody Look At Me - Thursday, Sep 7, 17 @ 9:46 am:

    Hope the Comptroller doesn’t hurt herself while patting herself on the back. Oh, Susana. You had nothing to do with this. Get over yourself already.


  5. - Anotherretiree - Thursday, Sep 7, 17 @ 9:57 am:

    My oldest Dental bills are now past the 2 year mark. I want to thank our head businessman for the minimum 24% interest I will receive someday…


  6. - Mr. K. - Thursday, Sep 7, 17 @ 10:00 am:

    I gather this news will be offset by the “hundreds of businesses” that Rauner promised he would bring to Illinois.

    And the jobs. I assume the job growth has already started as of two weeks ago? Employers are hiring more folks now that a budet has stabilized things?

    This is all very good news. After two plus years of campaigning, I now look forward to 2 years of governing.


  7. - Workin' - Thursday, Sep 7, 17 @ 10:02 am:

    Worth notin’: if the Governor had refinanced the state debt as soon as the budget was enacted, he would have saved enough interest to pay for the new private school tax credit.


  8. - DuPage - Thursday, Sep 7, 17 @ 10:06 am:

    @- Anotherretiree - Thursday, Sep 7, 17 @ 9:57 am:

    ===My oldest Dental bills are now past the 2 year mark. I want to thank our head businessman for the minimum 24% interest I will receive someday…===
    We don’t receive the interest, the DENTIST does.


  9. - Anotheretiree - Thursday, Sep 7, 17 @ 10:16 am:

    ==Dupage We don’t receive interest==
    My dentist always required up front payments. I will receive the interest. Thinking back, my oldest bill might be over two years so it might be 30% on the oldest one.


  10. - Oh Boy - Thursday, Sep 7, 17 @ 10:25 am:

    “Burning money” is an appropriate phrase from the Comptroller. Continuing to pay 12% interest when you could be paying 5% makes no sense.

    How long does it take to do that math?


  11. - Sonny - Thursday, Sep 7, 17 @ 10:26 am:

    Issuing press releases about $1 billion in education funds that had been delayed at the peril of public schools and another about how right now the Governor’s dislike of the budget foisted on him is costing taxpayers $2 million a day, on top of the $800 million his budget crisis cost taxpayers, is reasonable.


  12. - Rod - Thursday, Sep 7, 17 @ 11:41 am:

    What is very clear from what Rich has posted is that Comptroller Susana Mendoza believes that she has some type of mandate to pay K-12 funding before all other funding. I know of no such Constitutional mandate for in Section 17 of Article V of the Illinois Constitution.

    U.S. District Judge Joan Lefkow ordered back in June the state to pay $586 million a month for Medicaid vouchers that come in after June 30. On top of that, Lefkow ordered the state to pay another $2 billion toward the more than $3 billion Illinois owes to managed care organizations, which process payments to Medicaid providers.

    By the end of July Mendoza made payments that were only able to reduce Medicaid backlog by 18 percent. Just because the Memisovski v. Wright case is not in the news right now doesn’t mean it is not a consideration in all of this. Illinois is currently just shifting money around and claiming a great victory for school funding due to the enactment of PA 100-0465 which is now a significantly unfunded state mandate all be it one with good intent. The solution of borrowing or not borrowing to pay off the Medicaid providers is beyond the authority of her office, ordering the payments coming out of the Treasury is her decision and she has made it clear where her priorities are at.


  13. - OldIllini - Thursday, Sep 7, 17 @ 12:01 pm:

    ==My dentist always required up front payments. I will receive the interest.==

    I just got paid by Delta Dental on a 7/2015 dental bill +18% interest, so 9%/yr.


  14. - JS Mill - Thursday, Sep 7, 17 @ 12:43 pm:

    =Two months later, his inaction on this common-sense budget mandate has cost taxpayers at least $120 million. Currently, the state is paying up to 12 percent interest on a large portion of its bill backlog at a cost of $2 million a day in late payment interest penalties.=

    Is this how successful businesses work?


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