Measure would reveal true cost of Illinois’ bill backlog

AWM05152017An effort to force state agencies to be more upfront and accountable with the Illinois comptroller about the bills they owe to vendors is headed to the governor’s desk, and Senator Andy Manar (D-Bunker Hill) is urging him to sign it.

The Debt Transparency Act, sponsored by Manar and Representative Fred Crespo (D-Hoffman Estates), passed with bipartisan support last week. It 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.

Illinois’ bill backlog currently stands at a record $14.4 billion. An estimated $6.6 billion of that is being held by state agencies because of lack of appropriation or processing delays.

The backlog amount jumped by $1 billion recently after the Governor’s Office of Management and Budget reported additional bills for medical, corrections, state group health insurance, human services and other state agencies.

The problem is that state agencies are not required to regularly report their liabilities, including the late payment interest penalties associated with outstanding bills, to the comptroller’s office.

“This is not a hypothetical problem,” said Manar, chairman of a key Senate appropriations committee. “We just learned of $1 billion in additional bills that state agencies suddenly reported. This is a terrible way to monitor the state’s ledgers, and it isn’t fair to taxpayers.”

The comptroller’s office projects that Illinois will owe at least $800 million in interest and penalties on its overdue bills by the end of the current fiscal year.

“That’s $800 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,” Comptroller Susana Mendoza said.

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.

Illinois’ bill backlog has nearly tripled in the past two years, making it all the more urgent that policymakers receive timely reporting of the consequences of not having a budget. Without accurate reporting about what the state owes, it’s impossible for the comptroller to precisely report interest charges.

Crespo said he is pleased the legislation passed with bipartisan support.

“Illinois is facing unprecedented fiscal challenges, and in order to overcome them we must know how much debt state agencies are actually holding,” he said. “This is a common-sense reform that will ensure government is being transparent with its taxpayers.”

Current 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. But the agencies already have the personnel and infrastructure in place to compile the data.

“Gov. Rauner should sign this bipartisan transparency initiative,” Mendoz said. “Taxpayers deserve to know the true scope and cost of the state’s bill backlog, and policymakers need this vital information as they are making budget decisions.”

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