Latest Post | Last 10 Posts | Archives
Previous Post: A game of tax hike chicken
Next Post: *** UPDATED x1 *** State gets a brief reprieve
Posted in:
* ICPR…
Right now, the oldest bills held by the Illinois Comptroller’s office date back to July 1, 2015, when the budget impasse began. Bills being paid on a day-to-day basis still date back to October of 2016. The Comptroller estimates that there are over 188,000 bill requests from state agencies waiting for payment in her office.
Whew.
Just let that sink in for a bit. The oldest bills date back to 7/1/2015.
Unreal.
…Adding… From the Wall St. Journal…
The state owes Illinois dentists $225 million, and some of those bills go back 23 months, according to the Illinois State Dental Society. Some dentists in college towns or other areas with lots of state workers are selling their receivables to keep their heads above water. Others are asking state employees to pay in cash, says Ronald Lynch, a dentist in Jacksonville.
“There are dentists who have to do this just to survive,” says Dr. Lynch. “It’s very stressful.” Dr. Lynch, who hasn’t asked for such cash payments, says he is owed about $250,000, forcing him to forgo a salary so he can continue to pay bills and his employees.
Health care is the capital’s biggest employer apart from the state itself. Springfield’s two hospital systems — Memorial Health and HSHS St. John’s — say they together are owed more than $200 million by the state. Edgar Curtis, Memorial Health’s chief executive, says he has put off a $100 million capital-expansion project because of the uncertainty. “We hate to see projects being shelved because of what is going on at the state level,” he says.
* Onward…
When payments to vendors are not completed on time, there are financial consequences for the state. The Illinois Prompt Payment Act is a state law that sets mandatory penalty interest payments for most bills over 90-days past due. For most expenses, the interest penalty is 12% per year.
Since the beginning of the year, Illinois has paid $181 million in interest on late payments alone from debts created in previous years. An estimate from the Illinois Comptroller’s office says the state will have accrued $800 million in penalty interest this year that must be made in future fiscal years. The state must pay interest on every bill from the backlog, leaving less revenue left over for other bills in the queue.
That’s $800 million that can’t be spent on social services, schools, universities, public safety, you name it.
* A look at other states…
Habitually paying “late fees” through interest rates is not a practice used in other highly populated U.S. states. Other states have similar “prompt payment” laws that set late payment dates and penalties for debts in those states. These laws generally give states between 25 and 45 days to pay bills, and penalties range from 5% to 10% annually.
However, no current significant bill backlogs have been reported in California, Texas, New York, Florida, or Pennsylvania. While they each have their share of financial challenges, Illinois’ unprecedented lack of a budget has created a concept that simply does not exist in other states: $15 billion in unpaid bills.
posted by Rich Miller
Wednesday, Jun 28, 17 @ 10:36 am
Sorry, comments are closed at this time.
Previous Post: A game of tax hike chicken
Next Post: *** UPDATED x1 *** State gets a brief reprieve
WordPress Mobile Edition available at alexking.org.
powered by WordPress.
Honest questions- How many of those bills are still held by the original vendors? How many are due to entities that have had to fold, e.g. social service providers? And how many are held by entities that have bought out the vouchers from the original vendors and are hoping to make money on the interest paid?
Comment by Anon221 Wednesday, Jun 28, 17 @ 10:45 am
How was that interest rate set? Can it be lowered through legislation? If I was a vendor that had a good cash flow from other sources, I would be GLAD to find an “investment” that returned 12%!
Comment by weary Wednesday, Jun 28, 17 @ 10:45 am
None of this is worth just the ballooning bill backlog. A budget should be done every year, as required. There’s so much other time to fight over and debate other issues and legislation.
I believe this is a very important lesson for young people and others who want to run for office. It’s to make sure that government functions fiscally. Nonbudget items can most certainly be introduced to budget negotiations, but there has to be a cutoff point if they can’t get passed, where the losses start to outweigh the gains.
Comment by Grandson of Man Wednesday, Jun 28, 17 @ 10:46 am
For all of you who think this is all Rauner’s doing read the article on page 1 today’s WSJ. The problems predate Rauner by eons and yes his refusal to perpetuate the BS Illinois has practiced for decades may have brought some additional inconvenience - name one other Pol who has tried to make the State spend only what it takes in.
Comment by Sue Wednesday, Jun 28, 17 @ 10:46 am
And just a reminder, the entities that were buying state receivables from vendors (”factoring”) have stopped buying medical receivables.
The proverbial canary in the coal mine is now “claws up”.
Comment by Downstate Wednesday, Jun 28, 17 @ 10:47 am
@Anon221: I’m a state employee, and I visited the dentist in July 2015. I’m covered by dental insurance and have paid my premiums on time every month. My bill was more than $1,000, and I paid my dentist directly. I am still waiting to be reimbursed by the state. So some of those bills are held by individual citizens, just waiting.
Comment by Annie P. Wednesday, Jun 28, 17 @ 10:48 am
Sue:
It’s not all Rauner’s fault. But he does share blame for the past 2 1/2 years. And seriously? Spend what it takes in? If he wanted that he would have negotiated a budget by now.
Rauner is not a victim. He’s a perpetrator.
Comment by Demoralized Wednesday, Jun 28, 17 @ 10:49 am
===…and yes his refusal to perpetuate the BS Illinois has practiced for decades may have brought some additional inconvenience -===
By nearly every measure, Illinois is worse off since Rauner became governor.
“…may have brought some additional inconvenience…”
Your utter lack of understanding is noted. I’ll pass on this ignorance to the closed social service organizations.
Comment by Oswego Willy Wednesday, Jun 28, 17 @ 10:50 am
“For most expenses, the interest penalty is 12% per year.”
Considering what one can barrow money at today, the ’spread’ between the interest rates appears to potentially be a highly profitable opportunity.
Comment by Small town taxpayer Wednesday, Jun 28, 17 @ 10:51 am
===For all of you who think this is all Rauner’s doing read the article on page 1 today’s WSJ===
How did you get that from the WSJ story? Seriously. There are some mentions about our stupid and mismanaged past, but it’s almost all about the current situation.
Comment by Rich Miller Wednesday, Jun 28, 17 @ 10:53 am
“his refusal to perpetuate the BS Illinois has practiced for decades”
Like when the Governor advocates for shorting current pension payments?
Comment by Anonymous Wednesday, Jun 28, 17 @ 10:54 am
Annie P.- Thank you for reminding me, and the rest of the readers here, of that. I did not intentionally mean to overlook the individuals and families that are having to pay out of pocket more and more and more for their healthcare that should be covered, at least in part, by the insurances they are contributing to with each and every paycheck.
Comment by Anon221 Wednesday, Jun 28, 17 @ 10:58 am
I would argue that the oldest bills would be the money owed to thousands of State Employees that had been denied wages during the Quinn Administration.
The courts have already ruled that they are supposed to pay the employees with interest; however, it needed to have the funds appropriated.
To this date, nothing has been done and it has been swept under the rug.
They do not owe me money… but I think anyone would be upset not being paid their agreed wages for hours worked.
Comment by OpenYourEyes Wednesday, Jun 28, 17 @ 10:59 am
===name one other Pol who has tried to make the State spend only what it takes in.===
Sue, I agree that the mess isn’t solely Rauner’s doing. But c’mon, don’t tell me he’s been applying fiscal discipline to Illinois when he’s spending $39 billion per year while we’re only collecting $32 billion per year.
And he campaigned on turning things around, did he not? How’s that working out? How would you grade his performance so far?
Comment by 47th Ward Wednesday, Jun 28, 17 @ 10:59 am
– name one other Pol who tried to make the State spend only what it takes in.–
Are you claiming Rauner has done that? The backlog of bills has gone from $4.5B to $15B during his tenure, and is still a runaway train.
For crying out loud, the state isn’t even paying its utility bills, much less for contracted services. It’s a historic deadbeat.
Seriously, Sue, I’ll have what you’re having, but only on weekends after I’ve put the car in the garage for the night.
Comment by wordslinger Wednesday, Jun 28, 17 @ 10:59 am
You can’t argue with a koolaid drinker. People idolize rauner.
Comment by Iron Wednesday, Jun 28, 17 @ 11:00 am
“Name one other Pol who has tried to make the State spend only what it takes in.”
Your basic premise is flawed. Rauner has not suggested that we spend only what we are currently taking in. His last budget included more revenue under the dubious “Grand Compromise” entry. If he was arguing for a budget based on current revenues, I may not agree with it, but I would at least consider it a sincere effort.
You need to spend some time researching who Rauner really is instead of listening to his campaign commercials and other propaganda.
Comment by Pelonski Wednesday, Jun 28, 17 @ 11:05 am
My dentist has told me it takes 18-24 months to get paid by the state.
Comment by Chucktownian Wednesday, Jun 28, 17 @ 11:16 am
The TV Commercial Star/Governor is supposed to submit a Constitutionally Mandated Balanced Budget.
The best he can say or do is “blame Madigan”. Just saw one of his 30 second shows.
Send him back to managing the soft drink fountain at the nursing home.
Comment by Mike Cirrincione Wednesday, Jun 28, 17 @ 11:31 am
A friend works for the state. They have money taken out every check for healthcare. She has had her credit ruined by collections agencies and has to pay cash to see a doctor. All because she does her job and pays her share of insurance payments on time. This article and issue has not gotten the publicity it deserves. The not for profits closing doors is worthy of headlines. This issue needs more exploration. There are many of thousands of state workers that are in this position. Do you have healthcare if you pay for it and can’t use it?
Comment by Echo The Bunnyman Wednesday, Jun 28, 17 @ 11:44 am
Man, they should just pass a law that allows collections agencies to go after the state. It’d be an absolute mess, but can you imagine the Repo Man hitching up a State Trooper?
That’d get the two sides talking.
Comment by ChrisB Wednesday, Jun 28, 17 @ 11:54 am
It seems that many of Rauner’s supporters think that all they needed to do was vote Rauner in and then support him without reading, listening, or considering the job he’s done since 2015. They view it all like they bought a Showtime Rotisserie Oven and believe that their problems would magically manage themselves.
HEY! HELLO? Care to catch up on what your governor did AFTER taking office?
1.) Rauner’s “reforms” could NEVER return to us the money needed to fix our state, let alone offset the fiscal damage he created. We could adopt 100% of Rauner’s propsals but still be hurting, yet what Rauner did up to now in political fights has made our situation far worse than what Quinn and Blago did.
2.) Rauner never made the sale. He never told us how his Agenda would fix Illinois. Rauner turned out to be like a door to door salesman who just stands at your door and threatens to burn down your house if you don’t buy from him.
3.) Rauner never governed. We have a governor who claims he’s impotent, powerless and unable to govern because of an Illinois legislator elected as Speaker. Rauner hasn’t governed even in areas not requiring Madigan’s approval.
3.) Rauner proved that broken government is better than him as governor. His failure blew up and discredited solid conservative policies that could have worked with a governor who wasn’t obsessed with Madigan. Edgar did it. Thompson did it. Ryan did it, but Rauner FAILED to even try.
Comment by VanillaMan Wednesday, Jun 28, 17 @ 11:59 am
That’s some seriously impressive economic development Bruce. I guess the squeeze the beast tactic applies to the private and public sector with Baron Von Carhartt.
Comment by Saluki Wednesday, Jun 28, 17 @ 12:01 pm
I just received a check from my dentist for service I had in June 2015
it included 10% interest. I have Delta Dental thru the state insurance I got when I retired. The State can’t pay on time but they can pay 10% interest.
Comment by GLG Wednesday, Jun 28, 17 @ 12:12 pm
VanillaMan pretty much nailed it. He said how everyone pretty much feels. Here’s hoping he doesn’t blow up the deal again and that Madigan doesn’t help him by moving the goals posts. Again.
Comment by Ginhouse Tommy Wednesday, Jun 28, 17 @ 12:19 pm
Rich WAJ article clearly states Rauner inherited this mess. Your lack of objectivity on Rauner is apparent every day
Comment by Sue Wednesday, Jun 28, 17 @ 12:56 pm
Ratzo- are you saying Rauner is worse then Blago- why because he won’t cave in - most of you who inhabit this space are truly loons
Comment by Sue Wednesday, Jun 28, 17 @ 1:07 pm
By this time next week, will have paid out nearly $7,000 in dental care fees that have not yet been reimbursed. 2 days ago, I got a bill for $31,000 for a medical procedure my wife needed. And yet, Captain Carhartt doesn’t seem to mind deducting the health care premiums from my paycheck.
Comment by Scooteriffic! Wednesday, Jun 28, 17 @ 1:10 pm
- Sue -
In the 229+ years of “American Statehood” in the Union, only a sole governor led a state without a budget for 2 consecutive years.
Even Rod never had “that” distinction.
So, there’s that…
Comment by Oswego Willy Wednesday, Jun 28, 17 @ 1:10 pm
Sue - Okay, here’s your chance…please name ONE bit of policy or legislation that Governor Rauner has passed which benefits the fiscal position for the State of Illinois?
The loons are those whom blindly follow this man even though he leads you off a cliff.
Comment by Captain Illini Wednesday, Jun 28, 17 @ 1:14 pm
It needs repeated that the social service agencies do not earn interest on their long overdue grant payments. The payment delays and uncertainties in even getting reimbursed are horrible.
I’d like to see legislation adding social service providers to the ones who are paid interest and providing some assurance of payment if they sign an agreement and perform the services in good faith (even if subject to appropriations).
Comment by logic not emotion Wednesday, Jun 28, 17 @ 1:19 pm
Scooterific… You make my point so clearly. The kids and families hurt by the non profits closing get the headlines. I am not saying they should not. But, how many State workers pay for insurance deductions and can’t use the insurance because it’s either not accepted or have to pay cash? How many families and kids are affected by that? Rauner is actually being compassionate by squeezing these entities, at least he’s not collecting money from them and not providing the service. That’s a story that isn’t pretty enough for the press to cover, I would love to see some numbers in the state in your position.
Comment by Echo The Bunnyman Wednesday, Jun 28, 17 @ 1:25 pm
Sue, “name one other Pol who has tried to make the State spend only what it takes in.” You’re defending Rauner as if he is matching his spending to revenue. As pointed out, he’s not. Not by a longshot. Feel free to explain what it is that led you to this opinion.
Comment by Original Rambler Wednesday, Jun 28, 17 @ 1:31 pm
Is it any wonder why people and businesses are abandoning Illinois. This entire budget fiasco is so absurd it is frightening Madigan and Rauner need to disappear from the negoitiations and let the rank and file do their jobs.
Comment by downstate hack Wednesday, Jun 28, 17 @ 1:43 pm
Rich -
Allow me if I might to inject a “deep thought” into this thread.
The 1% interest per month penalty was supposed to be a stick to ensure the state paid its bills on time.
The stick isn’t working.
Instead, we have created a cottage lending industry where deep-pocketed investors lend money to starving providers who are required to sign over the prompt payment interest.
That lending industry is self-perpetuating.
Or - I believe - you have even more deep-pocketed providers that are more than happy to see the state struggle to make ends meet because it means they essentially get to lend the state money at 12% interest per year, far more than they could hope to garner on the market.
Paradoxically, I think non-profit provider in particular would be better off if the interest rate were linked to the treasury bond rate/commercial lending rates, BUT state law absolutely required the bill be paid within 90 days of the end of the fiscal year.
I appreciate your consideration, ant reader who made it to this point.
You may now return to your regularly scheduled arguments.
Comment by Free Set of Steak Knives Wednesday, Jun 28, 17 @ 2:07 pm
Not surprised. I have travel vouchers from IDOC submitted in January of 2016 that still haven’t been paid. The part I don’t understand is I know some of the other agencies manage to have their vouchers paid within a month. Isn’t there suppose to be sone sort of “wait line” in which these things are paid in order?
Comment by Seats Wednesday, Jun 28, 17 @ 2:13 pm
==Rauner inherited this mess==
Are you dense or just ignoring reality? The Governor does bear some responsibility for the last 2 1/2 years. It’s not debatable. It’s a fact. He’s the Governor for crying out loud.
==Your lack of objectivity on Rauner is apparent every day==
Oh grow up. You see what you want to see and ignore everything else. There are plenty of things written on here that prove otherwise. Stop being a victim all the time.
== most of you who inhabit this space are truly loons==
If being a loon means I don’t buy into your garbage then count me as a loon
Comment by Demoralized Wednesday, Jun 28, 17 @ 2:19 pm
==are you saying Rauner is worse then Blago==
I wouldn’t say that. But when a guy says he’s happier than he’s been in 20 years and he judges his success by how many standing ovations he gets in African American churches he’s approaching Blagojevich territory
Comment by Demoralized Wednesday, Jun 28, 17 @ 2:28 pm
I’ve posted this before, but my wife and I both work in higher ed. Our daughter was born 7/8/15. We still randomly get stray bills from that. Try planning a budget when any day may randomly deliver a $600 bill to you for services provided 2 years ago
Comment by JohnnyPyleDriver Wednesday, Jun 28, 17 @ 2:32 pm
I have $6000 due in dental claims, going back yes, to 7/1/15. I used my HELOC to pay the dentist, but many not so fortunate.
Comment by OldIllini Wednesday, Jun 28, 17 @ 4:07 pm
This wasn’t rocket science - after Rauner was elected and the Dems temp tax rates expired- in the absence of a budget spending remained at pre- Rauner levels mostly due to court orders and union contract requirements. This is explains the 16 billion in unpaid bills. The Dems- Madigan refused to reduce spending and Rauner stood by his reform nonsense. In short- Raunerinherited spending at Quinn levels and the tax revenues didn’t support it-on top of this Illinois’ economy lagged the national recovery. If you want to assign blame most of it falls on the Dem legislature who rigged spending and never really anticipated that their Temp tax was what they classified it i.e. Temporary
Comment by Sue Wednesday, Jun 28, 17 @ 5:57 pm
–MikeFlanneryFOX32@PoliticalEditor
Wish we could put US Judge Lefkow’s court on live TV. Today’s hearing exposed immoral depravity of #IllinoisImpasse , unpaid bills.–
All “depravity” is “immoral,” but that’s a pretty strong shot from a lifer like Flannery.
Comment by wordslinger Wednesday, Jun 28, 17 @ 5:58 pm
===The Dems- Madigan refused to reduce spending and Rauner stood by his reform nonsense.===
This makes zero sense.
There was no budget in 2 fiscal years.
You can’t control spending outside court orders without a budget.
Ugh.
Comment by Oswego Willy Wednesday, Jun 28, 17 @ 6:00 pm
===If you want to assign blame most of it falls on the Dem legislature who rigged spending and never really anticipated that their Temp tax was what they classified it i.e. Temporary===
Rauner asked and thanked the GA for letting it expire.
Keep up. If you knew that, then your willfull ignorance is noted.
Comment by Oswego Willy Wednesday, Jun 28, 17 @ 6:01 pm
FYI nonprofits do not get to sell their unpaid bills like for profit providers. So they do not benefit from the folks who earn the 12% interest.
Comment by Chicago Barb Thursday, Jun 29, 17 @ 10:29 am