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* You may have seen this story on Drudge today about California Gov. Schwarzenegger warning that his state may need a $7 billion emergency federal loan.
Things aren’t nearly that bad in Illinois, but they aren’t that great, either…
Illinois finished the first three months of its budget year with a mountain of unpaid bills and record delays in payments, Comptroller Dan Hynes says in a new report.
Worse, the report said, with the state’s economy still faltering, the backlog of bills and payment delays “will experience an even greater increase by the end of the calendar year and beyond.” […]
As of Tuesday, the report said, more than $1.8 billion worth of bills were sitting in the comptroller’s office that couldn’t be paid because the state didn’t have the money. A year ago at this time, Hynes’ office had nearly $1.4 billion in bills waiting to be paid.
It’s also taking longer to pay those bills once they reach Hynes’ office. The payment delay is 42 working days, “a historical record at this time of year.” That counts only the time after Hynes office receives a bill for payment. Often, state agencies hold on to bills before submitting them to the comptroller’s office, which is responsible for writing the checks.
That last sentence is extremely important. The payment cycle is not what it appears to be because agencies “manage” their budget by holding onto invoices before submitting them to the comptroller for payment.
Read the comptroller’s report by clicking here.
* The state’s situation as of Thursday…
Unpaid bills – 100,913
Value of those bills — $1.822 billion
Days to pay those bills – 40 working days
* A southern Illinois facility has shut down because of the delayed payments…
The failure of the Illinois Department of Human Services to pay overdue bills of more than $400,000 to Human Services Center of Southern Illinois forced a shutdown on Monday, September 29, the agency announced at a press conference held Friday afternoon.
As of Monday, Human Services Center laid off 27 employees—32% of staff. The staff layoff has reduced mental health and development disability care to 100-300 current clients and denied care to the 35-40 new individuals who seek care each month. […]
“We have pleaded with the Department of Human Services and Secretary Carol Adams for payment of its overdue bills, and we have warned the state that we would have to fire staff, slash care, and turn people away without immediate payment,” said Gary Buatte, Executive Director. “The state has failed to pay—so that day has come.”
* And a central Illinois mental health facility tries to put things in perspective for the rest of us…
Delayed state payments to several social service agencies such as Crosspoint have prompted several to seek bank loans or use lines of credit to make payroll, organizers said.
Until recently, Crosspoint was on the brink of not being able to pay its 200 employees because of slow and delayed state payments.
But legislators intervened to speed up about $820,000 in state payments to the agency.
That, said Executive Director Thom Pollock, “takes us into November.”
If you’re a state worker, or work for a social services provider, please tell us your horror stories in comments.
* Related…
* Plunging state revenues may mean more cuts statewide
* State workers face bleak budget picture
* Money woes will force group home to close
* Aldermen ’still in dark’ on budget fixes
posted by Rich Miller
Friday, Oct 3, 08 @ 10:28 am
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A system in which payments are made when legislators complain is hardly optimal or even efficient. While state officials were responding to the legislators noted above, other bills likely weren’t getting attended to–and the squeakiest wheel isn’t necessarily the one with the highest priority.
And lest our fearless legislators be thinking of looking to us middle class taxpayers to resolve
this problem, think again. We middle class folks don’t have any money either. Even with the so-called bailout almost to certain pass today, there will not be instant economic nirvana. Many economists are prediction a two-to-three year slowdown, even longer.
So, what to do. We need a plan from Hairdo, one which prioritizes, cuts where possible (there
is always fat in government bureaucracies, ignore the wails about sensible layoffs), and insist that
nonprofits step up to the plate with their own cuts. Everybody could likely do with a little less money than they have been getting from our ever-generous Democratic government. But I agree that the pain should not necessarily all be concentrated on one or two agencies.
They are still collecting over 50 billion from taxpayers every year. Our Democratic “leaders,”
the ones who now run the state and have for years,
should earn their not inconsiderable compensation packages and figure out how to manage that 50 billion well for a change.
Comment by Cassandra Friday, Oct 3, 08 @ 10:45 am
A buddy of mine told me that this year the staff he works with is half the size it was in 2006. A lot of work just isn’t being done, but then, the agency itself can’t continue handling the workload it is mandated to do because the staff has been cut back so severly.
My neighbor has worked for DHS for twenty years and has been stressed out because Blagojevich demanded the agency sign up unqualified people for his expanded health care boondoggle. She was stuck between Blagojevich’s mandate and reality. Now that the judge has ruled that Blagojevich has overstepped his constitutional powers, she is now trying to figure out how to handle the thousands of Blagojevich-covered citizens now without coverage. She told me last year she knew he couldn’t get away with it and we spoke often about how the pressure was building at DHS over his fiasco.
This governor is destroying state government by administrating it so poorly. He should be impeached based simply on his shocking legacy of incompetence. Governors are important, and Blagojevich couldn’t even caretake Illinois, let alone be a leader.
If you can imagine hiring an arsonist as your baby sitter, that’s pretty much what we got with Rod Blagojevich over the past seven years.
Comment by VanillaMan Friday, Oct 3, 08 @ 10:53 am
I work in a SBDC and had a non-emergency medical transport agency come in June. They showed me their receivables due from the state and I was appalled. As Rich emphasized, the 42-day cycle is only after the agency turns it over to get paid. Over half of this company’s bills were over 90 days past due and a month’s worth of payroll was over 120 days due—and this is when fuel prices were exploding to well over $4/gallon. Did they make it? I’ll let you guess on that one….
Comment by Vote Quimby! Friday, Oct 3, 08 @ 10:54 am
Van Man, I believe the agency you refer to is HFS, not DHS, but the point is right on.
I do feel for people who have worked for those agencies for many years who are now being forced to promote programs they know are, for all practical purposes, fraudulent.
I suppose they could always quit, but in this economy, when you have to keep a roof over your head and food on the table, that’s easier said than done.
Comment by Secret Square Friday, Oct 3, 08 @ 11:00 am
{The failure of the Illinois Department of Human Services to pay overdue bills of more than $400,000 to Human Services Center of Southern Illinois forced a shutdown on Monday, September 29.
“We have pleaded with the Department of Human Services and Secretary Carol Adams for payment of its overdue bills, and we have warned the state that we would have to fire staff, slash care, and turn people away without immediate payment,” said Gary Buatte, Executive Director. “The state has failed to pay—so that day has come.”}
{Until recently, Crosspoint was on the brink of not being able to pay its 200 employees because of slow and delayed state payments.
But legislators intervened to speed up about $820,000 in state payments to the agency.}
So this begs several questions; first who are the legislators that represent the Central Illinois area where Cross Point provides services, and who intervened on their behalf?
Next, who are the legislators that represent the Southern Illinois area where the Human Services Center of Southern Illinois is located that either did nothing, or were ineffective at intervening on behalf of their local agency?
Was there any corollary relationship to the state’s inability or unwillingness to disburse $400,000 to Human Services Center of Southern Illinois and the fact that the state did release $820,000 to Crosspoint of Central Illinois?
Finally; has anyone asked Comptroller Hynes to provide an explanation of the bill payment cycles in terms of who gets paid first; and in what priority?
Basic fairness would suggest that all bills be treated equally, and paid on a FIFO basis, unless there are are urgent circumstances of some bills being paid sooner than others, even though they were submitted later. It seems like in this case; an investigation is in order, and it also appears as though the Southern Illinois has no juice.
It also looks as though these agencies are now not only competing for scarce appropriation dollars, but then they are also forced to compete with each other to try to get paid first.
Comment by Equal Justice Friday, Oct 3, 08 @ 11:01 am
Lot’s of talk about massive layoffs at I.D.O.T. and Illinois Tollway.
Looks like McPartlin’s timing was great, he got his golden parachute a week ago. The heck with all the little people.
Comment by I.D.O.T. Bleachers Friday, Oct 3, 08 @ 11:08 am
Muni Bonds, Industrial Revenue Bonds are not finding a market. As a result people are having to come up with CASH to cover. They can’t and defaults are happening. Expect a surge in these over the next couple of weeks.
Get a bucket and start bailing…
Comment by Flying Indictments Friday, Oct 3, 08 @ 11:08 am
We need to have a meaningful debate as to what the “core mission” of state government means in this changing economy. Conditions will likely get worse before they get better and once things settle down we might be looking at a completely different fiscal landscape. The state and us taxpayers that support it can no longer afford all of the “government” we currently have. Rather than look at delaying payments, making politically targetted budget cuts and promising the moon when we don’t have any money, we need our governor and legislative leaders to sit down and take a good hard look at what the state needs to invest in for our future, what are essential services that it should be the state’s responsibility to provide, and what is simply fat that must be cut. Unfortunately, the likelihood of this occurring is almost nil. Pity.
Comment by Bluefish Friday, Oct 3, 08 @ 11:09 am
IDOT Bleachers, if they lay off amy more people at the Schaumburg office, there won’t be too many left to attend to business. Of course, IDOT are planning to replace one entire bureau up there with consultants, who will probably be making $100-150 an hour per person with all the overhead figured in. Good for the industry and profession, but probably not the best long-term in the state’s interests. BTW, hope those consultants have a good line of credit when their invoices become due.
Comment by Six Degrees of Separation Friday, Oct 3, 08 @ 11:25 am
Don’t worry southern Illinois, IDOT and the traffic safety division are on the way to save your economy.
Comment by Leave a light on George Friday, Oct 3, 08 @ 11:32 am
Maybe we could ask for a federal “bailout” as California is doing right now. Maybe federal
bailouts are about to become the next big thing.
Comment by Cassandra Friday, Oct 3, 08 @ 11:36 am
Let’s start with the human service agencies, with which I am quite familiar. The non-profit organizations that help the mentally ill, the addicted, the aged, the developmentally disabled and others are doing the work of the state so the state does not have to.
It is an ethical imperative to pay for services rendered. In years of watching state government, I have found few people, whether in the executive or legislative branch, who don’t realize this.
Rod doesn’t get it…or, more likely from my very rare interactions with him, he truly doesn’t care.
He’d rather promote glitzy, undeveloped and unaffordable programs for his own aggrandizement than to support the essential infrastructure upon which this state–or any state–is built.
Instead of sharing the pain with a workmanlike, defensible across the board budget cut to try to preserve as much of the infrastructure as possible, he chooses targets (historic sites, substance abuse, DCFS) which he knows will arouse enough anger to sic the masses on his State House archrival. But, as always, he miscalculates.
It is a pathetic, intellectually dishonest and antisocial way to use authority. And it damages, in some cases fatally, those not-profits that take on the crises whose existence most people in the state don’t want to acknowledge.
Comment by ilrino Friday, Oct 3, 08 @ 12:38 pm
Glad to see the not-for-profit groups getting some recognition for the situation they have been forced into. For the all stories emphasizing DHS or DCFS getting hit with staff cuts there are many more people losing their jobs at not-for-profits as they adjust staffing to meet to problems related to a lack of payment.
Some community agencies are doing OK (OK being a very flexible term) but payment cycles as long as 120-140 days have hurt many others. Most not-for-profits are local groups who have often been in existance for many years and work with local boards, United Ways, and state agencies. Some have grown very large over the years, while others remain small. Many are funded 85%+ by state dollars to provide residential services, case management, mental health, vocational services, health care, crisis, and other services and have worked closely with state agencies to provide quality services to a wide range of people. Bake sales, golf outings, and local fund raising are great local projects but they cover a sliver of the real operating costs. Most of these groups have 3-10 weeks cash in the bank, while a much smaller number may have 6 months.
State funding has moved away from grant funding to fee for service. Under grants, groups were often paid before services and adjustments came later. Banks knew lines of credit would be good. Under fee for service payment comes only after services are provided and often with delayed payments. Same as any retail business, but the state determines the rate it will pay for services so there are not any real price increases. What does happen is cost adjustments. Programs get changed to fit the payment structure. The rate paid by the state has fallen significantly behind the inflation impact. If the GA provides increases of 0%-3.0% while inflation is 3.5%-5.5%, do the math for several years. Add in the current planned scenarios of rate cuts and payment reserves being held back. The picture does not look fun. If the Ameren basic rate goes up 10%, that increase comes from some other part of the organization like any other business. Bills and salaries have to be paid to keep going.
There are thousands of not-for-profits throughout the state. They represent many thousands of employees and they serve many more thousands of people with some type of need. As a whole, not-for-profits are often an ecomomic force in a community in terms of employment, housing, food, retail, and helping others meet those same needs.
Many not-for-profits are seeing more difficult times coming. Illinois funding ranks as some of the lowest in the country based on per capita. The people working at not-for-profits are not getting rich, but the reality is No Margin = No Mission. If you cannot pay the bills, you simply will not exist. While there will be more mergers, partnerships, buyouts, and simple closures as community groups face the economic reality like many other businesses, the people these groups serve are not going away. Is most of this avoidable? Yes. Simply pay the bills on a timely basis and stop using these groups as a chess pawn. Based on the current politics and state financial status the future of many not-for-profits looks grim.
Comment by zatoichi Friday, Oct 3, 08 @ 2:27 pm
Here is a generic description of the priority of state bills to be paid each month:
1. State payroll
2. Debt service obligations
3. All other bills
Also, in terms of having a backlog of $1.8 billion in unpaid bills and the “42 day” payment cycle… one must realize that the $1.8 billion represents only the bills the Comptroller hass. This total is more than likely bigger once you count the bills being held by the actual agencies. Second, after a bill is deemed vaild for payment, if it is not paid within 25 days, the bill then begins to collect interest at the rate of 1% per month (I believe this is still current law under the Prompt Pay Act). In other words, the state is in such a terrible cycle it will take either many years, or a substantial tax increase, to pay off all existing bills PLUS the interest owed.
Comment by unclesam Friday, Oct 3, 08 @ 2:34 pm
What is being forgotten here is that, in ADDITION to the funds which the state has been months-on-end slow to pay for services rendered, these agencies have also been crippled by the loss of general state funding slashed by Elvis’ amendatory veto pen.
The loss to developmentally disabled, mentally ill and addicted individuals and their families through unavoidable service cuts by the agencies upon which they depend had been devastating. At the same time, our educational system is FUBAR and in desperate need of additional funding. All the while, we are in recession, homes are in foreclosure, people are losing their jobs, and the State’s income cannot realisticly be expected to rise to meet all of these challenges.
That means that meaningful cuts of unnecessary expenditures need to be made, and quickly. This crazy deficit “spending” can’t happen anymore. And I put “spending” in quotes because, as we all know, the money isn’t being “paid” by the state. It’s a shell game to mask DEBT.
We need reforms, and we need them NOW!
Comment by Snidely Whiplash Friday, Oct 3, 08 @ 3:01 pm
Okay, I’ve worked on both sides of this. And now, I work at a state agency that co-exists with a community agency that serves people I work with. The double edged sword that is state government at work is horrible right now, especially if you are a person who depends on other people for assistance (MI, DD, etc.).
The community or non-profit agencies have asked for COLAs for staff, but these keep getting cut or stopped in Springfield. No extra money for staff, less staff to serve people. And now it takes longer to get the small amount of money they do get in order to pay staff and to assist the people that they are in business to take care of. HUGE cuts are taking place and Illinois is near last in the country as far as funding goes anyway for this part of society.
Then you have us in the state system conveniently getting blamed for the mess (look at those in Springfield not the people doing the actual work, please). The majority of people in DHS, etc., are working mandated hours of overtime because there are fewer people and we’re working with human lives, not machinery. After, oh 4 years, it’s gotten really old and tiring. Yet, we’re called greedy, etc. Most of us enjoy it. But we can’t hire anyone because the STATE won’t let us, because there’s no money to hire (but there is to pay OT). Do you have any idea how hard it is to stay sane yourself when you work 40 hours or more overtime a pay period over an extended time and you’re dealing with human lives? People that don’t often understand what they are doing?
The mess that we, on both sides, have been put in, is not a good one. And for either side to point blame at the other doesn’t do us any good. The way the system is funded needs to change. Illinois needs to stop being last in funding the services for those who can’t help themselves. But we also need to get the people who can make the changes to do what’s right.
Wow. Sorry. For someone who never posts anymore, I can still write a lot.
Comment by Wickedred Friday, Oct 3, 08 @ 3:42 pm
The Human Services Center in Southern Illinois is located in Randolph county, a very small rural county, that normally votes republican. This should explain why no-one is stepping up to the plate and asking for intervention. Where is that man who said he would work for the little guy and change things in Illinois? Oh, just another campaign promise…
Comment by sneaker Friday, Oct 3, 08 @ 3:43 pm
We just experienced a $700 Billion management by crisis episode and it worked so well that Illinois government is now adopting it. All are to be surprised and astounded when one day they suddenly become aware of a huge shortfall thus giving birth to the “crisis” and the poorly thought out crisis/emergency management decisions that follow.Guv sacrifices sacred cows and makes punitive slashes in various budgets of political enemies. This is what passes for governing now and it is not acceptable nor is it competent.
Comment by A Citizen Friday, Oct 3, 08 @ 4:27 pm
WOW!
With all these challenges, don’t you wish we still had a community organizer as great as that old ACORN guy Barack Obama?
What’s he be up to now-a-days?
Comment by VanillaMan Friday, Oct 3, 08 @ 4:44 pm
As an employee of the state, I am watching as the gov’s “MONEY SAVING SHARED SERVICES” robs us blind. After confiscating all of our computer equipment - from mice to servers - all paid for by my agency - CMS grows fatter and fatter, bolder and bolder. They are now CHARGING US to use OUR OWN equipment and as that equipment ages, we are being forced to accept “leased” equipment, which in the end costs us far more than the actual cost. We are being charged for each email account, and are being forced to surplus our equipment - at an exhorbatant rate through a private firm - PREMIER of MOLINE. Then there is always the management installed by RODDY PYTHON AND HIS FLYING CIRCUS. Inexperienced, naive, bleeding heart liberals all. I watch as we lose grant after grant due to inept grant writers. I watch as we lose MILLIONS AND MILLIONS of federal matching funds due to indecision, missed rollout dates and penalties for faulty administration of programs. And most important of all I watch my co-workers, one by one burn out, become cynical, and more and more stressed - not only at work but at home, not just because of the workload, the mandated overtime and the frustration of doing not only their job, but the jobs of perhaps 2-3 more employees who have been lost to budget cuts, but most importantly, this governor’s war AGAINST state employees. His constant threats of shutdowns, layoffs, and continued mandating of irrational programs has left all but the Tuesday Morning/Thursday afternoon travelling Chicago circus exhausted to the breaking point. Impeachment, imprisionment, detention in a bunker cannot come to soon. We are losing the backbone of the state in increasing waves. In some areas, there is no knowledge base left. Those left behind are managing as best they can, but you can only “WING IT” for so long, before the bottom falls out. As it is, the “RETIREMENT CLASS OF 2009″ is growing by leaps and bounds and I intend to be one of those “graduates”. After 30 years of service - I can no longer watch an agency that I dearly love and proudly serve, die a slow and horrible death at the hands of an insanely egotistical little despot.
Comment by Sweet Polly Purebred Friday, Oct 3, 08 @ 8:19 pm
I should mention that, while I am a self professed political junkie, I belong to no particular political party and never have.
Comment by Sweet Polly Purebred Friday, Oct 3, 08 @ 8:21 pm