* Press release…
An innovative proposal from State Senator Heather Steans could help businesses and state government at the same time by paying down Illinois’ backlog of bills more quickly.
Steans’ measure would allow the state treasurer to take over debts more than 90 days old, pay the vendors and clear the bills from the state’s ledgers. The approach would enable Illinois to pay off old debts more quickly, slow the accrual of interest penalties and inject money into local economies where businesses have been harmed by the state’s ongoing budget difficulties.
“This is a winning strategy to make more headway on the bill backlog. Every taxpayer benefits,” said Steans, a Chicago Democrat and a Senate point person on budget matters.
“If the treasurer has funds sitting there unused, why shouldn’t that money logically be available for this need? It won’t solve the entire bill backlog problem, but it will get us to a resolution more quickly.”
The proposal, Senate Bill 2858, would allow the state treasurer to pay bills more than 90 days old if the vouchers in the comptroller’s office exceed funds available by $1 billion. It would save the state additional money by implementing a 0.3 percent monthly late payment interest penalty – rather than the 1 percent under current law – on balances paid off by the treasurer’s office through the Vendor Payment Program.
Last year, Illinois paid more than $1 billion in late interest penalties – an outrageous and inefficient use of taxpayer dollars that could have been directed to other needs, Steans said.
“This legislation will help stop the accrual of interest on late payments and enable us to turn around payments to companies that do business with the state in a more reasonable amount of time,” Steans said.
Senate Bill 2858 passed the Senate today and now advances to the House for further consideration.
* Treasurer’s website…
The Treasurer’s Office manages the State Investment Portfolio, with assets of approximately $12-$15 billion, providing the necessary liquidity to meet the state’s daily obligations while investing remaining funds in authorized short/long-term investment opportunities.
* The Question: What do you think of Sen. Steans’ proposal?