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Hynes: Effective bill backlog now almost $9 billion

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Illinois

* Comptroller Dan Hynes’ office has just released a shocking new report on the state’s finances. It’s pretty much hopeless…

Hynes said Illinois had $5.1 billion in unpaid bills at the end of December. Add to that $2.25 billion in short-term loans the state must repay soon, and another $1.4 billion in unpaid health care bills that have not yet been sent to the Comptroller’s Office, and the state’s effective bill backlog climbs to more than $8.75 billion. [Emphasis added]

Yikes.

The payment delays are horrendous…

Suppliers of goods and services to the state, including health care providers and other critical social services are waiting 92 business days to be reimbursed – or more than 4 ½ months. That delay is almost double the 48 business-day delay at this time last year.

Oof.

A few backlog details…

The backlog includes grants to school districts and pre-school programs totaling $1 billion, university and community college payments in excess of $775 million and local government and transit district payments of more than $478 million.

If this keeps up for much longer, the ripple effect down the governmental chain will turn into a tidal wave.

There’s just no good news here…

The state’s cash flow position already has declined by $4.1 billion over the past year, Hynes said. He identified several factors in the decline of the state’s cash flow position, including continued weakness in the state’s economy-driven revenues, a structural imbalance in the enacted FY2010 budget, and the failure to address the deficit in the FY2009 budget, resulting in the state using its first $3.9 billion in revenues this fiscal year on last fiscal year’s bills.

Though there is evidence of improved economic conditions nationally, further declines in Illinois’ economy-driven revenue sources this year continue to threaten the state’s financial stability. State corporate income tax receipts were down 16.3 percent, sales tax receipts decreased 12.6 percent and individual income tax receipts fell 7.6 percent, compared to the same period last year

A prediction…

“Without major changes in the way Illinois collects revenues and how it spends those dollars, the state will enter FY2011 on July 1 with the largest amount of unpaid bills from the prior year in its history,” Hynes said.

The Bond Buyer reported today on that upcoming lapse…

Illinois must repay about $2.25 billion of cash-flow certificates in the coming months that Fitch warned would leave the state with nearly $6 billion of accounts payable at the end of fiscal 2010 on June 30. [Emphasis added]

That’s up from the $3.9 billion lapsed at the end of last fiscal year.

I’m not sure which company this analyst is with, but he’s in for another big surprise if he believed that fairy tale about action during last fall’s veto session…

Rating agencies have taken the state to task for the delay, citing it as a factor in negative rating actions because it has exacerbated the government’s growing liquidity problem and poor financial performance.

“We were anticipating some movement towards improving the state’s financial picture by October or November,” said analyst Edward Hampton. “The planned deferral of legislative action to address fiscal 2010 imbalances until at least February or March leaves little time in the fiscal year to take actions to materially reverse the trend of financial weakening.”

February or March? Ha!

Read the full Hynes report by clicking here.

posted by Rich Miller
Wednesday, Jan 6, 10 @ 3:41 pm

Comments

Governor Patrick J. Quinn is expecting to continue serving his time for an additional four years.

Upon consideration of the time he has now served, plus the good behavior he has exhibited while serving his time, we, the Illinois electorate, do hereby announce that he should be furloughed January 2011.

Comment by VanillaMan Wednesday, Jan 6, 10 @ 3:58 pm
I wouldn’t want to be in incumbent in this year’s elections. Legislative or Executive branch.

Comment by Deep South Wednesday, Jan 6, 10 @ 4:01 pm
Just curious…a couple of weeks ago Quinn came up $24 million to help UPS out. Where did that money come from?

Why is Quinn still creating layers of government? Do we really need an assessment of MGT? With all the problems that Illinois faces the last thing we need to worry about is the net benefit of shaving a few months off an inmates prison sentence. besides, the magnitude of problems of Illinois prisons requires a comprehensive approach that will require GA action to truly reslove.

Comment by Will County Woman Wednesday, Jan 6, 10 @ 4:01 pm
I’ve come to the conclusion that any more short-term borrowing is out. It’s just time to buckle up.

According to the comptroller’s report, there are five specific dates between March 23 and June 10 when we have to make debt service payments. We have to squirrel that money away; we can’t risk defaults if we’re going to issue bonds for capital projects to put people back to work.

We are going to do that, aren’t we?

Comment by wordslinger Wednesday, Jan 6, 10 @ 4:08 pm
The state is so far behind on making those payments to health care providers that patients are being billed in full for services rendered as far back as this summer. This mess has gotten no where near the attention it deserves. Women are being charged $30,000 for delivery / maternity care. Older folks are chosing to forgo treatments, including oxygen - per a report I read from SUAA - because they can’t afford the bill. And if the patient doesn’t pay — it gets sent to a collection agency. Can you believe that? The state can’t pay their bills and retirees, state employees of all ages are getting dinged in their credit report. If we pay in full, it is the equivalent of giving the state a loan. supposedly the state is to pay back the patient with interest. Are you kidding me?? The fifth largest state??

Comment by just a name Wednesday, Jan 6, 10 @ 4:11 pm
This is an incredible mess. State government spending including entitlements must be immediately cut drastically and then we still need a tax boost. No way the State legislature and Quinn have the stones. Disaster is inevitable with Illinois facing real insolvency even faster than California.

Comment by curious Wednesday, Jan 6, 10 @ 4:12 pm
The state won’t go bust, but folks who have contracted with the state might.

Comment by wordslinger Wednesday, Jan 6, 10 @ 4:13 pm
How is this Quinn’s fault?

The General Assembly has the power of the purse.

The Republicans are running on fantasyland accounting. Neither Quinn nor Hynes is really putting pressure on the legislators.

When people dismiss voting for minor party candidates they usually label the minor party candidates as “not serious”.

But what have the Democratic and Republican candidates said and done on the budget shortfall to show they are serious?

Comment by Carl Nyberg Wednesday, Jan 6, 10 @ 4:15 pm
Any bets on how many school districts are going to have to end school before the end of the normal school year.

Comment by OneMan Wednesday, Jan 6, 10 @ 4:16 pm
We’ve gone beyond the point where even a significant tax increase will solve the problem. Quinn needs to start making significant cuts instead of continuing to make promises the State can’t afford to keep. The longer he waits, the worse these cuts will be.

Comment by Pelon Wednesday, Jan 6, 10 @ 4:22 pm
Over/under on when state employees start missing paychecks?

Comment by Secret Square Wednesday, Jan 6, 10 @ 4:28 pm
it’s a least partially quinn’s fault for not using political savvy to pass the the tax increase. by throwing down the gauntlet and throwing social services under the bus, he turned off any normal productive fruitful dialogue. he didn’t call any legislators in the spring to win over their support. he just blew it.

Comment by just a name Wednesday, Jan 6, 10 @ 4:29 pm
SS –
At some of the private service organizations they already are.

Comment by OneMan Wednesday, Jan 6, 10 @ 4:30 pm
The grim fiscal reality further exposes the GOP fantasyland about not needing new revenues to pay the State’s bills and to balance the budget.

Comment by Reformer Wednesday, Jan 6, 10 @ 4:30 pm
Reformer, perhaps but lets remember what party controlled everything when we ended up in a situation that would be described by my 8 year old as…

Suckage

Comment by OneMan Wednesday, Jan 6, 10 @ 4:43 pm
New revenues? At this point of the game, how much more can you tax business and individuals for new revenue? People are hurting, tired and scared - you can’t take much more from them at this point. The state has to continue to cut and we need to look at charities, community organizations and churches to take over some social functions the government can not fund/support anymore.

Furthermore, when am I going to hear that legislators - state (and federal) are going to take furloughs, negate pay raises, or just plain refuse a month’s pay? (I understand that this is not the complete answer, however, it’s time to stop getting those automatic pay increases especially at the federal level when the rest of the population is forgoing theirs involuntarily.)

Comment by 2010 Wednesday, Jan 6, 10 @ 4:44 pm
Reformer et al. the republicans are lying. Soemthing like 89 percent of the republican base do not want taxes raised. The GOP guv candidates, the credibile ones at least, are just courting their voters when they say no taxes. We’ve seen a couple of them chamge their story only to go back to the no taxes, but rest assured that should a credible republican become governor, he will push to raise taxes. In fact, assuming that the GOP nominee is a credible one he will start talking about the inevitablity of raising taxes BEFORE the general election.

Comment by Will County Woman Wednesday, Jan 6, 10 @ 4:47 pm
–The state has to continue to cut and we need to look at charities, community organizations and churches to take over some social functions the government can not fund/support anymore.–

Who do you think the contractors being stiffed are?

It’s long past time to put on the big-boy pants. Severe cuts, major revenues.

Comment by wordslinger Wednesday, Jan 6, 10 @ 4:47 pm
I’m taken aback by all this: it seems to have all just come out of nowhere. Why hasn’t anyone warned us about this?

Comment by steve schnorf Wednesday, Jan 6, 10 @ 4:53 pm
How do you spell relief?

TTBO.

Comment by dupage dan Wednesday, Jan 6, 10 @ 5:01 pm
Well, as has been pointed out Hynes tried to warn people about this, but was in effect called an “ankle biter” for it and/or it just feel on deaf ears.

If you read Mike Lawerence’s guest editorial in Sunday’s Tribune it goes all the back to when Hynes was trying to warn Blago’s administration and continued right on into the Quinn administration. By it I mean the ankle biter comment/ warnings falling on deaf ears.

Comment by Will County Woman Wednesday, Jan 6, 10 @ 5:11 pm
–”I’m taken aback by all this: it seems to have all just come out of nowhere. Why hasn’t anyone warned us about this?”–

LOL, Steve. But I do remember when Quinn and others were trying to warn us, loud n clear, but were told to turn the rhetorics down.

Comment by Cindy Lou Wednesday, Jan 6, 10 @ 5:11 pm
Any chance we can scrape some cells from inside the cheek of Mitch Daniels and clone him?

Comment by Cloner Wednesday, Jan 6, 10 @ 5:26 pm
Talking about lack of income whats the status of the Wirtz Lawsuit Rich. Since we are going to begin selling bonds that are already poorly rated by all bond firms. Just wondering anybody.

Comment by HERE YOU GO Wednesday, Jan 6, 10 @ 5:35 pm
Some posters around here take the cake.

Democrats control all the power in this state government. Democrats call all the shots. Democrats govern us.

And somehow it is the fault of Republicans? Republicans are to be ridiculed for this preposterously sad state of affairs? A sad state of affairs presided over by . . . Democrats?

Good luck with that one.

At this point the proposed tax increases wouldn’t have solved the problem. Come to think of it, the proposed tax increases wouldn’t have solved the problem last June. At best they would have helped kick the can down the road a bit longer.

Now that we have reached a complete dead end . . .

Comment by Louis G. Atsaves Wednesday, Jan 6, 10 @ 5:52 pm
Cloner, you’d be better off with Indiana’s 3.4% individual income tax rate and 8.5% corporate income tax rate.

Comment by wordslinger Wednesday, Jan 6, 10 @ 6:25 pm
So will the legislature go to Springfield in the spring and solve the problem or will they ignore their responsibilities and not address the issue. If so, no one in office should be re-elected, not going to happen, but still.

Comment by Jimmy Joe Wednesday, Jan 6, 10 @ 6:27 pm
“All this has happened before: all this will happen again.”

That’s Illinois. Republicans get too complacent, stop listening to constituents, dems take over, dems run up huge debts, repubs put up resistance, the whole thing crashes, repubs come in and re-apply some fiscal responsibility, then they get complacent again…

Any politician that says we don’t need to/won’t raise taxes to fix this mess is a liar. If they pledge not to raise taxes, they are liars or insane. There is no other option left, the couch cushions have been plumbed, the credit cards are maxed out, everything that can be pawned is already in the shop. Stop lying to us, pols, and get your heads together on a tax increase and a budget that WORKS.

Comment by Commander Adama Wednesday, Jan 6, 10 @ 6:34 pm
The Governor during budget crisis last summer vowed to make cuts and require the unions to take furlough days or he would reduce the workforce. There must be a Democrat Primary going on because I have not heard if of the unions taking furlough days. Bottom line is the MAJORITY party cannot govern. Specifically this inept Governor.

Comment by Gold Fish Wednesday, Jan 6, 10 @ 6:51 pm
Well that is Great News

Gov. Rod and his crew were the Great NEW HOPE ??

( LIKE Obama ??? )

Changing past PRACTICE ???? NOT

I ask YOU again the VOTERS

WHERE ARE ALL THE GOOD PEOPLE WHO
VOTED FOR THIS ADMINISTRATION

WHERE ARE YOU NOW ????

WHERE IS JAY HOFFMAN ?????

Comment by grategul Wednesday, Jan 6, 10 @ 6:58 pm
Actully, Goldfish, the asking was furloughs, give back wage increase, give up next increase(s) and still lay workers off. There was never any promise of no layoffs. Union(s) can not stop layoffs/reduction in staff, they can only see that contract process/bargaining impact of such are followed.

Comment by Cindy Lou Wednesday, Jan 6, 10 @ 7:05 pm
Ugh. Just read Hynes’ report. Too much short term borrowing. No rainy day fund. Just debt, debt, debt and more debt.

Comment by Emily Booth Wednesday, Jan 6, 10 @ 7:53 pm
How is proposing that charities, community organizations and churches provide “social functions” going to solve the problem? Many charities, community organizations and churches have programs that rely on state funding to provide the “social functions” that the state no longer has the revenues to support.

Comment by Jess69 Wednesday, Jan 6, 10 @ 8:08 pm
Community organizations in general need to work harder at their own fundraising.

Comment by rudy Wednesday, Jan 6, 10 @ 8:48 pm
The sky has been falling for quite some time now. These numbers are comparable to the outlook the General Assembly used to pass the 2010 state budget, so really there shouldn’t be any real surprise. Some truly painful cuts have to be in the works and there can’t be any sacred cows, with the possible exception of public healthcare entitlements, which will almost certainly be expanding under Obamacare.

Comment by Budget Watcher Wednesday, Jan 6, 10 @ 9:10 pm
I am curious, though I have been a public servant at the Fed, State and Local levels for over 35 years: Why would anyone want to be Governor now. Apparently Lisa is smarter than anyone gave her credit.

Comment by Anonymous Wednesday, Jan 6, 10 @ 9:20 pm
Mr. Schnorf- LOL
and on a personal note, I was “laid off” in 2009 with over 35 years in experience and replaced by someone making over 10K more annually than I was with less than one year experience in state governement. How can any of us expect those with little experience but only yes man qualifications, to do anything but make this budget mess worse? They all just want to save their phoney baloney jobs-apologies to Mel Brooks.

Comment by really? Wednesday, Jan 6, 10 @ 9:40 pm
I blame Daley. I blame the double dippers and the multi=pensions. We put Obama in, make him print more money! SIMPLE! http://www.youtube.com/watch?v=gEWml3t8mCo

Comment by Patrick McDonough Wednesday, Jan 6, 10 @ 10:09 pm
We have all seen this coming for a very long time. The same reports every quarter from the comptrollers office, more and more debt, less and less revenues. It angers some that I encourage people, with the ability to do so, to move out of this state if possible. That is not a joke, and its not snark. If you can find work somewhere else then do it. This state is so far gone that there is no fixing the problem without major, drastic cuts in social service and programs along with a massive tax increase that is going to smother small business and continue the tax death spiral that we are in.

If this state were a patient, its time to start planning the funeral.

Comment by Moving to Oklahoma Wednesday, Jan 6, 10 @ 10:55 pm
How much did the legislature actually approp for medicaid last year and how much 12 month liabilty was actually incurred. I keep hearing we have caught up with Medicaid bills due to stimulus MOE requirments but Hynes still says there is 5b in back bills. Having Medicaid off the book is masking the real amount we are spending and making it impossible to deal with the eligibility and rate rollbacks that need to be made.

Comment by can someone find out Wednesday, Jan 6, 10 @ 11:11 pm
A little less than a year ago (2/4/09), Dan Hynes said that this was where we would be…one point for Dan. He went on Fox Chicago Sunday (2/8/09) to discuss the issue and refused to discuss a tax increase…this is where he lost me.

http://www.myfoxchicago.com/dpp/about_us/Fox_Chicago_Sunday_Feb_08_09

Comment by Pot calling kettle Wednesday, Jan 6, 10 @ 11:36 pm
Steve…You had to know this budget mess, and worse, were coming and the mess will only get worse as we stumble bum throughout the rest of this year. In fact, anyone with a modicum of state budget experience knew. The key legislators knew. Gov Quinn knew, but decided to go along with a bogus budget last summer rather than fight it out with Madigan. In fact, Speaker Madigan, by requiring republican votes last spring for any tax increase set in motion an irreversible Quinn suicide mission—run state government while carrying a $12 billion GRF deficit. It’s Mission Impossible, but Quinn didn’t have the management good sense to stand up and say….”No, I won’t do it!!! I won’t play your pasty Speaker Madigan. I won’t continue a 20 year budget charade by stealing from the state employee pension system and dig my deficit hole deeper. It’s a financial mess, and I am here to clean it up.”

Comment by Louis Howe Thursday, Jan 7, 10 @ 5:26 am
WOW!! Just like Stroger is beating his own drum for the transparency and accountability measures he put in place at the County level, as well as the NEED for the 1 penny…All correct moves..Hynes AND Blago called it months ago but no one cares about facts..just political oportunity and the media buys into it and spreads the crap even more.

Comment by blackdem Thursday, Jan 7, 10 @ 9:33 am
MovingtoOK: I have to acknowledge much agreement. If my family weren’t here, if I didn’t own a significant amount of property here, and if I wasn’t already in a good job I liked, I’d be long gone. I know some that plan to leave IL when they retire. A very wealthy relative of mine already makes it a point to spend more than half the year in Florida for tax reasons. Illinois is controlled by Chicago politicians with bad policies and apparent corruption. Makes it easy to understand why people move to other states. The eternal optimist in me has been beaten almost to death by the pragmatist who has watched the game for years.

Comment by TiredofGamesmanship Friday, Jan 8, 10 @ 4:24 pm
[…] This is particularly galling considering the fact that our wonderful State O’ Illinois is behind on its bill-paying by almost $9 BILLION, and climbing. This includes back payments for Medicaid providers, hospitals, nursing homes and pharmacies. […]

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