Manar03152017SPRINGFIELD – Taxpayers bear the cost of hidden interest on Illinois’ enormous bill backlog with no real clarity about how deeply in debt the state is, how much interest is accruing on overdue bills and how long it will take to pay off the penalties.

Senator Andy Manar, a Bunker Hill Democrat, and Illinois Comptroller Susana Mendoza hope to change all of that with Senate Bill 1652, the Debt Transparency Act. The measure requires more accountability from state agencies regarding Illinois’ bill backlog, which today is more than $12.4 billion.

An estimated $4.9 billion worth of overdue bills is being held by agencies because of lack of appropriation or processing delays, and the comptroller’s office projects that Illinois will owe at least $700 million in interest and penalties on those overdue bills by the end of the current fiscal year.

“That’s $700 million of taxpayer money we are just throwing away – it’s not helping kids get day care or go to college. It’s not helping seniors get meals on wheels or keep their home health care,” Mendoza said. “Just think how many state employees could get timely health care if we had $700 million to pay our past-due medical bills. Think how many more Illinois students could get MAP grants to attend college with that money.”

But without accurate reporting on what the state owes, it’s impossible for the comptroller to precisely report interest charges. The Debt Transparency Act would require state agencies to report monthly to the comptroller the bills they are holding and estimate the amount of interest that will be paid on those bills.

“There are consequences when anyone fails to clear out old debts, whether they’re overdue credit card payments, student loans or medical bills,” Manar said. “When state government builds up billions in unpaid bills and interest, the consequences are devastating and affect generations. Taxpayers deserve accurate, timely information from the state and straight answers about what they’re being asked to kick in and why.”

The state’s Prompt Payment Act, which assigns a 1 percent per month penalty to bills that are 90 days past due, applies to a currently unknown number of bills being held by state agencies. Some bills, including claims from health care providers, accrue interest at 9 percent a year after 30 days. State law only requires agencies to report on Oct. 1 of each year the aggregate amount of bills being held on the previous June 30. The information is outdated by the time it is received, Mendoza said.

“My office right now has to estimate just how many bills are stacked up at agencies and how much is accruing in interest penalties. This is a crucial tool to get a better handle on this,” she said of the measure, which is sponsored in the House by Representative Fred Crespo (D-Hoffman Estates).

The Debt Transparency Act is scheduled to be heard at 1 p.m. today (Wednesday, March 15) in the Senate’s State Government Committee in Room 409 at the Capitol.

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