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Mendoza releases first “debt transparency report”

Monday, Jan 22, 2018

* Press release…

Comptroller Susana A. Mendoza today released the state’s January Debt Transparency Report. The report, for the first time, provides a detailed monthly snapshot of the state’s bill backlog by compelling state agencies to comprehensively disclose liabilities they are holding, including late payment interest penalties, bills at the agency level and unappropriated liabilities and obligations.

Eighty out of the 84 state agencies and universities required to report responded for the reporting period ending Dec. 31, 2017. The four agencies that failed to submit and remain in non-compliance with the state statute are the Department of Children and Family Services, the Council on Developmental Disabilities, the Human Rights Commission, and the Sex Offender Management Board.

The Debt Transparency Report confirms the Comptroller’s estimate that as of Dec. 31, 2017, the state had incurred more than $1 billion in late payment interest penalties.

The agencies with the largest late payment interest liabilities accrued thus far include the Department of Central Management Services with $434 million and the Department of Healthcare and Family Services with $236 million. Agency totals ($741 million) combined with interest payments already made in 2017 ($143 million) and pending payments at the Comptroller’s office ($116 million), show that the state incurred $1.03 billion in late payment interest penalties in 2017, primarily caused by the record two-year budget impasse that ended in July of last year.  

“This report will be an effective cash-management tool for my office and provides a much greater level of transparency for taxpayers and policymakers,” Comptroller Mendoza said. “Now we can all see a clearer picture of what Illinois owes to small businesses, universities, community colleges, social service providers and others. The Debt Transparency Report takes the politics out of the numbers to provide meaningful data.”

The fiscal information submitted by state agencies to the Comptroller’s office demonstrates the need for the Debt Transparency Act, which became law in November when Republican and Democratic lawmakers came together to overwhelmingly override Governor Bruce Rauner’s veto of Comptroller Mendoza’s legislation.

Other key findings from the report, which compiles and aggregates data from state agencies as of Dec. 31, 2017:

The state’s general funds bill backlog stood at $9.246 billion on Dec. 31 with $2.476 billion of that total at state agencies.

The report also confirms that there are $2.3 billion in unappropriated liabilities held at state agencies. The agencies with the largest unappropriated liabilities include the Department of Corrections, which has $420 million in unappropriated liabilities, and the Department of Human Services, which has $118 million in unappropriated liabilities. The Department of Healthcare and Family Services (HFS) has a $443 million shortage in General Revenue Funds transfers to be deposited in the Healthcare Provider Relief Fund for medical programs administered by HFS.

Until appropriations for these liabilities are approved by the legislature and become law, these bills cannot be submitted to the Comptroller’s office for payment. They will remain at the agencies, and many of them will continue to accrue late payment interest penalties. 

“The bipartisan Debt Transparency Act is already providing the people of Illinois with valuable financial information,” Republican Rep. David McSweeney, a chief co-sponsor of the act, said. “Governor Rauner needs to immediately tell us what his detailed plan is for addressing the over $2 billion of unpaid bills that have not been appropriated.”

Today, the state’s bill backlog stands at an estimated $8.835 billion. That number is down from a record high of $16.675 billion. The bulk of that reduction came through a debt restructuring program pushed for by Comptroller Mendoza. With the proceeds of a $6 billion bond sale, she brought in $2.2 billion in federal matching funds and saved taxpayers billions of dollars by stopping the clock on more than $8 billion worth of bills that were accruing late payment interest penalties.

The January Debt Transparency Report accentuates the challenges facing policymakers as they work to pass a budget for the next fiscal year.

“It is incumbent upon the Governor to meet his responsibilities and present a balanced budget plan,” Comptroller Mendoza said. “When Governor Rauner took office, he inherited, through no fault of his own, a bill backlog of $5 billion. Through a debt refinancing plan, our office recently paid down more than $8 billion worth of bills, covering what he inherited and then some. There is no disputing that the Rauner administration owns the remaining $8.835 billion backlog, which is a product of deficit spending and failing to budget for the state’s true liabilities during his tenure. As part of his budget address, he needs to present taxpayers with a detailed proposal for paying off the operating debt and interest penalties his administration ran up.”

Click here to see the report.

* In other news

The Illinois Toll Highway Authority on Friday withdrew a proposal to pay almost $9 million to a consulting firm to finish work on a technology upgrade after the plan was questioned by the state comptroller.

But Tollway officials said the decision was not the result of Illinois Comptroller Susana Mendoza’s complaint, but rather because of discussions with the state’s independent chief procurement officer on the best way to finish the job.

The Tollway had already agreed to spend $7.9 million for a contract with Deloitte Consulting to implement the State’s Enterprise Resource Program, a technology project to help manage state finances. The Tollway had asked for the additional $9 million to finish the work, and it was on the agenda for an upcoming committee meeting. The agenda item had referred to the amendment as a “tollway emergency.”

Mendoza, who manages the state’s checkbook, on Thursday called for a review of the proposal by independent procurement officials, saying in a news release that “failing to properly estimate cost and overspending is not an emergency — it’s poor project management.”

- Posted by Rich Miller        

  1. - Arsenal - Monday, Jan 22, 18 @ 10:58 am:

    So, an extra $2.3 billion on the debt. I don’t ever want to hear Rauner whine about anyone else’s fiscal mismanagement.

  2. - A Jack - Monday, Jan 22, 18 @ 10:58 am:

    So Bruce, don’t forget about that $8.83 billion in your “balanced” budget proposal for the next fiscal year.

  3. - Whatever - Monday, Jan 22, 18 @ 11:03 am:

    ==But Tollway officials said the decision was not the result of Illinois Comptroller Susana Mendoza’s complaint, but rather because of discussions with the state’s independent chief procurement officer on the best way to finish the job.==

    Translation - she caught us, so we asked the procurement officer if there was any way around it and were told “No.”

  4. - Langhorne - Monday, Jan 22, 18 @ 11:11 am:

    “The report also confirms that there are $2.3 billion in unappropriated liabilities held at state agencies.”

    Boggles my mind, and i am not easily boggled.
    Budget address should be quite full of magic beans.

  5. - A Jack - Monday, Jan 22, 18 @ 11:18 am:

    If only we had a chief executive in charge of those pesky state agencies we wouldn’t have all of those unappropriated liabilities. You know, someone like a governor.

  6. - Annonin' - Monday, Jan 22, 18 @ 11:19 am:

    Hey GovJunk is busy announcin’ a new sausage factory and meddlin’ in PTAB activities for take your dopey report and shove it.

  7. - Norseman - Monday, Jan 22, 18 @ 11:27 am:

    === “The report also confirms that there are $2.3 billion in unappropriated liabilities held at state agencies.” ===

    This is clearly malfeasance on the part of Rauner and his administration. A lot of people have been hurt and will continue to be hurt by the Rauner con job.

  8. - pawn - Monday, Jan 22, 18 @ 11:32 am:

    “$2.3 billion in unappropriated liabilities…”

    Isn’t this a violation of separation of powers? How can the executive branch create liabilities for the state? Isn’t that a de facto appropriation? I’m not suggesting that Illinois walk away from these debts. Just noting that if we believe that Illinois should pay these bills — and I do — then didn’t the Governor in a way “appropriate” the money?

  9. - City Zen - Monday, Jan 22, 18 @ 11:39 am:

    ==our office recently paid down more than $8 billion worth of bills, covering what he inherited and then some==

    That’s a strange allocation. Since Bruce’s debt is two-thirds of the $16.675B balance, shouldn’t two-thirds of the bond proceeds be applied towards “his” debt? The beginning balance was $5B, not zero.

    Either way, debt is debt. We all own it and Bruce can’t manage it.

  10. - Anonymous - Monday, Jan 22, 18 @ 11:49 am:

    See a businessman will always put a fiscal house in order.

  11. - Arthur Andersen - Monday, Jan 22, 18 @ 12:12 pm:

    Lotta data to digest here. I’m wondering how much of that late payment penalty cash went to vendors directly vs. the various vendor support companies.

    Also, and albeit this is a tiny fraction of the $2.3 billion in unappropriated spending, but I don’t know that it’s fair to make Rauner wear the jacket for Chicago State University blowing its budget due to “higher than expected boiler rental and utility costs from crumbling infrastructure.” NEIU also overspent, but the reasons were not specified.

    In any case, kudos to the Comptroller for staying the course on this initiative.

  12. - wordslinger - Monday, Jan 22, 18 @ 12:27 pm:

    –The Debt Transparency Report confirms the Comptroller’s estimate that as of Dec. 31, 2017, the state had incurred more than $1 billion in late payment interest penalties.–

    Some sharpies are getting fat on the sweet juice provided by our “fiscally conservative” governor.

  13. - kimocat - Monday, Jan 22, 18 @ 12:34 pm:

    “I’m wondering how much of that late payment penalty cash went to vendors directly vs. vendor support companies.” So do I. I’d also like to report that a doctor who forced me to pay up front for his services a year and a half ago, is now refusing to hand over the interest money to me.

  14. - Blue dog dem - Monday, Jan 22, 18 @ 12:34 pm:

    Again I volunteer my services to help the governor present a real balanced budget.

  15. - Blue dog dem - Monday, Jan 22, 18 @ 12:42 pm:

    Of the eighty state agencies that reported, I wonder how much money was spent to prepare said reports.

  16. - wordslinger - Monday, Jan 22, 18 @ 12:46 pm:

    –I wonder how much money was spent to prepare said reports.–

    Is that you, governor? That was his pathetic spin on trying to keep a lid on how much money is really owed.

    You claimed to have been some businessman/manager back in the day. Did it take a lot then for you to come up with how big the nut was? That wasn’t in your head every moment?

  17. - Demoralized - Monday, Jan 22, 18 @ 1:03 pm:


    You may not think so but I can tell you preparing the report was a “pita.” There’s not some report out there you can print. I’m not saying the report isn’t a good idea, but that fact doesn’t mean it’s not a huge administrative burden because it is.

    I’m also not sure how accurate the report is. I don’t doubt the number is big but most agencies came up with numbers using estimating techniques.

  18. - Blue dog dem - Monday, Jan 22, 18 @ 1:05 pm:

    Wordy. You mistake me for a Rauner apologist. I am far from it. He purposefully plays money games. Mendoza is rubbing his nose in it for political purposes. Kudos as long as it doesnt cost taxpayer dollars. My business successes were minimal, but we survived(barely) by watching every penny we spent.

  19. - My New Handle - Monday, Jan 22, 18 @ 2:19 pm:

    These reports are part of government transparency and part of what tax dollars are spent on, just like FOIA responses. Agencies, boards and commissions spent much of their time and our tax dollars generating reports, ideally in the interests of an informed public.

  20. - Arthur Andersen - Monday, Jan 22, 18 @ 2:40 pm:

    Demoralized, I can see where assembling this report for the first time could have been a “pita” to use your verbiage, but won’t it be easier now that you’ve done it once? Also duly noted that a number of agencies footnoted the use of estimates.

  21. - walker - Monday, Jan 22, 18 @ 3:15 pm:

    Political or not, this is worthwhile info, for those who care about the state’s finances.

  22. - Blue dog dem - Monday, Jan 22, 18 @ 3:26 pm:

    Does anyone, other than Rauner and Mendoza, not understand where our states finances have been and where they are heading? It’s almost beyond comprehension. But this governor still thinks he presented a balanced budget. Is this what an Ivy league education yields?

  23. - Sonny - Monday, Jan 22, 18 @ 4:08 pm:

    Any agency director not aware of their agency’s bottom line and obligations does not deserve their title. Asking them to jot it down isn’t like requiring them to master the back flip. It shouldn’t vary much from month to month. Expect a little more from your bureaucrats and your state.

  24. - Oswego Willy - Tuesday, Jan 23, 18 @ 7:28 am:

    It’s reports like this these next few months that will be damaging to Rauner as the real costs of his purposeful damage is weighed and measured.

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