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*** UPDATED x2 - Pritzker camp responds - Unappropriated spending was $2.8 billion *** This Is Illinois

Monday, Oct 16, 2017

* My Crain’s Chicago Business column

State agencies under the governor’s control are required to report the amount of unpaid bills they have not yet submitted to the state’s comptroller for payment.

The supremely goofy “Only in Illinois” part is, the agencies are required to make that report just once a year. And the information is always badly outdated by then.

Comptroller Susana Mendoza, the state’s bill-payer, can look at payment and revenue histories to approximate how many bills she has to pay every month and how much money may be available. But after more than two years with no budget and Gov. Bruce Rauner signing state contracts without official legislative appropriations, there are a lot of unknowns right now. Mendoza thinks there may be somewhere around $1.2 billion in spending that the General Assembly never approved. But she doesn’t know for sure.

To give you an idea of how ridiculous this process is, the state’s bill backlog unexpectedly grew by $1 billion one day in May when the governor’s Office of Management & Budget abruptly revealed the unpaid invoices.

The comptroller has to plan ahead to make the state’s bond payments so she doesn’t accidentally trigger a credit downgrade (which would put the state into junk bond territory). She has to make regular (and huge) state pension payments, and schools rely on their state funding to keep their doors open. So plopping $1 billion in new bills on her desk without warning can cause all sorts of very real problems.

Some of the state’s approximately $15 billion in unpaid bills qualify for an interest penalty, designed to help businesses and not-for-profit groups that aren’t being paid in a timely manner. But, in yet another “Only in Illinois” quirk, state law doesn’t require state agencies to tell the person who pays all the bills which invoices qualify for that penalty. So all Mendoza can do is guesstimate what is owed, and she thinks it may be nearing $1 billion.

In February, Mendoza had legislation introduced to require state agencies to tell her

Click here to read the rest before commenting, please. Thanks.

*** UPDATE 1 ***  Wordslinger noticed something in the GOMB presentation to bond buyers that I missed….

Approximately $2.8 billion in State General Funds operational liabilities were not appropriated in FY 2017, but these may be paid from future year appropriations

*** UPDATE 2 *** Pritzker campaign…

“$2.8 billion in unappropriated spending is just the latest cost of Bruce Rauner’s budget crisis,” said Pritzker campaign spokeswoman Jordan Abudayyeh. “Illinois is drowning in bills manufactured by this failed governor and his damage is done.”

* Related…

* State Comptroller’s Office: Checks Are in the Mail to Prevent Utility Shutoffs at Centralia Prison: “The bills have already been at the Department of Corrections for several months by the time they get to us. Most of the bills we’re paying for the state right now, we’re still paying bills from January to the state. So they talked about this being sort of an important bill they need to get paid right away so they can continue to get service at the prison so we bumped it up and paid those bills.”

* Editorial: Rauner’s DTA veto makes less sense by the day

* Our View: Debtor in denial

* Some Republicans may change their votes on bills governor vetoed

- Posted by Rich Miller        

19 Comments
  1. - @MisterJayEm - Monday, Oct 16, 17 @ 10:24 am:

    “Some Republicans may change their votes on bills governor vetoed”

    Normally, I’d read this as a sign that some Republicans will extract a higher price from Rauner to keep their votes; but how can GOP legislators have any expectation of a forthcoming quo for their quid pro votes after Rauner lied to so very many people about HB40?

    Illinois Republicans may have inadvertently entered a cash-only, payment-in-advance era of political horse-trading — and those cash-on-the-barrelhead deals ain’t near as easy to keep out of the papers.

    – MrJM


  2. - Rod - Monday, Oct 16, 17 @ 10:34 am:

    Mendoza also has indicated that last month there were about $7.5 billion in bills not forwarded to her office. So last month the total of outstanding bills was probably close to $22 billion along with on going pension debt of around $250 billion. That is a lot of money to put it simply.


  3. - wordslinger - Monday, Oct 16, 17 @ 10:35 am:

    An Oct. 2/3 presentation by GOMB to bond buyers estimates FY17 operations liabilities not paid and not appropriated at $2.8B. That’s on top of a $4.63B FY17 deficit.

    Sorry I can’t link with this gadget. But you can find a summary of the presentation in the Capital Markets section at the GOMB website (see Page 7 and footnote 3).

    By the way, the guvs peeps told bond buyers that the Illinois economy is “strong, diverse and robust,” Tier 3 is boffo pension reform and the tax increase shaped up the FY18 budget prettay, prettay, prettay good.


  4. - ughhh - Monday, Oct 16, 17 @ 11:08 am:

    –Approximately $2.8 billion in State General Funds operational liabilities were not appropriated in FY 2017, but these may be paid from future year appropriations–

    so what happens if those funds never get appropriated?


  5. - Langhorne - Monday, Oct 16, 17 @ 11:13 am:

    As always with rauner:

    Words–when not hampered by the GA, we have streamlined govt admin, saving hundreds of millions

    Deeds–hide the bills, and suppress the total, starve the beast

    Honest, timely, reporting is the absolute minimum. The reports should be required under penalty of perjury, signed by a ranking dept official, not some underling who might be subject to manipulation. Hopefully, this is already covered by the bill.


  6. - David - Monday, Oct 16, 17 @ 11:24 am:

    I think the courts have said it no appropriation no pay.


  7. - Undiscovered country - Monday, Oct 16, 17 @ 11:39 am:

    how does lapsed spending and the court of claims factor into that “paid for from future appropriations bit?
    last I checked, all bills not paid within the fiscal year plus lapse period get sent to court of claims (health care exempted) and under the court of claims, no approps? no pay!
    someone, please reconcile. isn’t this either a lie or a prayer that the GA will retroactively appropriate to save the Gov’s bacon?


  8. - zatoichi - Monday, Oct 16, 17 @ 11:42 am:

    So unpaid bills are $15B, the held back in agency bills are $7.5B and now %2.8 for inappropriated spending. Tapping $25B. Now that is some fine transparent bookkeeping. The actual cash needed to cover all that is where?


  9. - wordslinger - Monday, Oct 16, 17 @ 11:53 am:

    David. I think the courts have said “no appropriation, you still gotta pay about 90%” or so of normal GRF spending. Lot of court orders and consent decrees out there.

    What the $2.8B for FY17 is, only GOMB seems to know. Perhaps they’d like to share with the comptroller and the public, in the goo-goo interests of transparency, planning and accountability.


  10. - yep - Monday, Oct 16, 17 @ 12:01 pm:

    So, what happen to the loan to pay back invoices that vendors are waiting to be paid?? The vendors are on the hook for bad government.


  11. - illini - Monday, Oct 16, 17 @ 12:49 pm:

    $729,000 in delinquent utility bills owned by the Centralia Correctional Center and the DOC was sitting on these bills before sending then for payment?

    What about Murray Center?

    How many other state facilities are in similar situations?


  12. - Demoralized - Monday, Oct 16, 17 @ 12:55 pm:

    ==hide the bills==

    Nobody is hiding the bills. Not submitting to the Comptroller isn’t hiding anything. It’s because there isn’t an appropriation to pay for them. You can’t send bills over without that.

    ==last I checked, all bills not paid within the fiscal year plus lapse period get sent to court of claims ==

    Not true for this budget. You can pay invoices from any year from this year’s appropriation. They included language this year that gets rid of the fiscal year limitation.

    ==Honest, timely, reporting is the absolute minimum.==

    That’s insulting to those that work on this.


  13. - Demoralized - Monday, Oct 16, 17 @ 12:57 pm:

    ==DOC was sitting on these bills ==

    You can’t send a bill for payment without an appropriation to pay it.


  14. - Mouthy - Monday, Oct 16, 17 @ 1:34 pm:

    Why appropriate money at all if you don’t need to? What is says is that a Governor can spend whatever they want on anything (legal) and the State’s taxpayers are on the hook for it. It shouldn’t be legal to buy something if you don’t have an appropriation to pay for it..


  15. - illini - Monday, Oct 16, 17 @ 1:45 pm:

    @Demoralized - read the link to the CCC story.

    The Comptroller was not even aware of these bills until August when they were finally submitted for “expedited payment”.


  16. - anon2 - Monday, Oct 16, 17 @ 2:25 pm:

    McSweeney will help lead the veto override of the Mendoza bill. Good for him. And he’s not a lameduck like many of the other GOP Yes voters.


  17. - Undiscovered country - Monday, Oct 16, 17 @ 2:46 pm:

    @demoralized
    thanks for the clarification, that’s a BIG BIMP bill change. I wonder who exactly made that ask, could it have been some of those same vendor payment debt consolidators?


  18. - pawn - Monday, Oct 16, 17 @ 3:59 pm:

    So how is this unappropriated spending not a violation of the separation of powers identified in the Illinois Constitution???


  19. - 37B - Monday, Oct 16, 17 @ 4:35 pm:

    This is no way to run a rodeo….
    Rauner?
    Rauner?


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