Marking an end to Fiscal Year 2022 on June 30, Comptroller Susana A. Mendoza is pleased to report good news on Illinois’ fiscal recovery since fighting through a state budget impasse and a global pandemic.
The state fiscal year ended with a General Funds accounts payable balance of $1.8 billion for the first time in more than a decade – and a General Revenue Funds payment cycle of ZERO days for the first time in decades. This means the office is caught up on all bills related to Medicaid, the state’s Group Health Insurance program, K-12 schools, higher education and other government operations and programs.
With the payment cycle down to ZERO days, it means the office was able to pay the Mandated Categorical Grants (MCAT) for K-12 schools on the very day they were due at the end of the fourth quarter. This is a far cry from when Comptroller Mendoza first took office in 2016, inheriting a General Revenue Funds average payment delay of 210 business days and an MCAT delay of more than six months. Today, K-12 schools don’t even wait one day.
On July 1, the first day of the new fiscal year, the Illinois Office of Comptroller (IOC) is paying the remaining $200 million of the $500 million in additional funds earmarked for the five state pension funds to lower long-term pension liabilities by $1.8 billion.
Over the past year, the IOC paid off the $2 billion owed to the Federal Reserve two years early, saving $82 million in interest, paid off $928 million owed to other state funds and paid off $900 million owed to Group Health Insurance bills.
After decades of consecutive downgrades, Illinois earned six credit rating upgrades in the past year, and delivered stability and predictability to our state vendors and providers that they hadn’t seen in years. This action has been most meaningful to our health-care industry partners, educators and small businesses who bore the brunt of the ongoing pandemic and the effects of the 2015-2017 budget impasse.
Most importantly, the state’s bill backlog was eliminated, paid down to $3 billion a year ago, without using any American Rescue Plan Act (ARPA) federal stimulus dollars, and is now an accounts payable of $1.8 billion today with a payment cycle of ZERO days.
Yesterday, the Comptroller joined Governor J.B. Pritzker and legislative leaders showcasing Illinois’ recovery and returning $1.8 billion in relief to taxpayers to help them as they face record levels of inflation and rising gas prices.
“This tax relief is possible because we’ve balanced our state budgets, eliminated our bill backlog and are paying our bills on time. We are saving money for a rainy day and working to better stabilize our pension liability. We’ve worked very hard to put Illinois on much stronger financial footing, allowing us to provide this tax relief to Illinois working families and individuals when they need it most,” Comptroller Mendoza said.
Later this year, Comptroller Mendoza’s office is prepared to process the $1.1 billion in property tax and income tax rebates administered by the Department of Revenue beginning the week of September 12.
Today’s fiscal report means that Illinois is better poised to face upcoming challenges to state finances as the nation experiences record levels of inflation.
The Comptroller and her office faced great uncertainty when she came into office in 2016 during the worst budget impasse in the state’s history, with a bill backlog nearing $17 billion, followed by a global pandemic impacting state revenues throughout the country two years later.
“I’m battle-tested and have proven my ability to successfully navigate us through these fiscal crises, and I have worked hard to prepare and get us to this level of financial stability so we can better address challenges that may come our way,” said Comptroller Mendoza.
“The fact that we’ll have a billion dollars saved in our Rainy Day Fund to help us during adverse downturns certainly helps, but Illinois must save more when we are able to with stronger-than-expected revenue receipts so that we strengthen our ability to weather through these unexpected crises.”
Comptroller Mendoza has proposed legislation, HB 4118, sponsored by State Representative Michael Halpin, to lessen this uncertainty by fortifying the state’s Rainy Day Fund and the state’s Pension Stabilization Fund, implementing automatic triggers for future deposits into both funds. With additional savings, the state will be able to better prepare to weather the uncertainty of potential fiscal downturns.