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Illinois' Billions in Unpaid Bills: Who Gets Paid, and When?

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Illinois' Billions in Unpaid Bills: Who Gets Paid, and When?

Dan Hynes is Illinois’ outgoing comptroller. (AP/file)

Unpaid bills keep stacking up at the Office of the Illinois Comptroller. Not enough tax revenue is coming in to cover what the state is spending, so the backlog grows. Non-profits and social service agencies sometimes wait many months before getting what’s owed to them. And so do small businesses that - in a tough economy - are in no position to turn down work, even from a deadbeat state. We look at the problem, and the not-so-scientific way the state decides which bills get paid when.

Right now, there are at least $4.6 billion dollars in bills owed by the state of Illinois just waiting to be paid. As some checks get written, new bills arrive and the backlog remains. Revenues coming in are not adding up to the money state agencies promised their vendors.

Meet Susan Claassen.

CLAASSEN: I’m the office manager for Claassen Construction.

Claassen Construction is a tiny operation based in Rushville, in central Illinois about an hour from the Mississippi River.

CLAASSEN: Couldn’t really tell you how many people are here. Just a very small - everybody knows ya - type of town.

Last fall, Claassen Construction won a contract from the state to build a ramp to help a young girl with cerebral palsy get to the school bus.

CLAASSEN: We built a ramp going off their kitchen onto their deck. According to specs, of course, with hand-rails, the stairs, whatever.

It was a nice score: off-season work, $3,000 government contract. But there was a catch.

CLAASSEN: So we waited. And it’s like, you know, February and we still hadn’t gotten paid. And it’s March, and we still hadn’t gotten paid.

And all that time, Claassen Construction’s own bills started piling up. The company had to pay for the lumber it used to make that deck.

CLAASSEN: Our vendors are companies from in the town or maybe outside of the town. Everybody knows who you are. You know, word gets out. And maybe we’re not going to get the next job, because, you know, Claassen Construction doesn’t make good on their payments.

Claassen had to pay her vendors out of pocket, and she kept calling the agency that awarded her the job, asking about the payment. Eventually, she was told to write a letter to the Illinois comptroller, whose office actually writes the checks, to plead her case.

HUDZIK: When did you actually end up getting the money?
CLAASSEN: It was actually right after that. It was actually after I wrote the letter...

...right after she wrote the letter. Within days. These letters are actually an important part of how the state decides when to pay bills. The comptroller’s office calls them “hardship” letters, and they’re basically a business or group saying, “Hey. I’ve waited long enough. I need this money. Please move my bill to the front of the line.”

The letter Claassen wrote was among several dozen the comptroller’s office sent us in response to a Freedom of Information request. Another hardship letter concerned an arts program for kids in Chicago that claimed its landlord had locked it out because the rent hadn’t been paid. The state police wrote a letter urging expedited payment to the postal service, because their P.O. box was in danger of getting canceled. And a state agency said the air conditioning unit at a mental health center was on the fritz, but the repair company wouldn’t fix it until it got paid for a previous job.

KNOWLES: It’s really, very much a triage situation, trying to keep operations afloat as much as we can.

Carol Knowles is spokeswoman for Comptroller Dan Hynes. She says when determining which bills to pay first, the comptroller’s office asks state agencies to prioritize. Some do, some don’t, and the ultimate call on whether to grant a hardship request is made by the comptroller’s office.

KNOWLES: At times it is a judgment call, and it’s a very difficult decision. We’re not able to help everyone in an emergency when we need to, and even the emergency situations may need to wait weeks before there’s sufficient revenue to come in.

Some bills start at the front of the payment line. Payroll for state employees has to be paid on time. And the state’s borrowed a lot of money, and those interest payments are prioritized. So is general state aid to schools. And some Medicaid bills have to be paid quickly or the state loses out on federal money.

Whatever bills are left over can take months and months to get paid.

KNOWLES: Six months or more, in very tight times.

And these are very tight times. Just ask Anita Richardson from north suburban Skokie.

RICHARDSON: I am an attorney, so I practice law on a full-time basis.

And for over ten years, that included doing some contract work for a little-known agency called the State’s Attorneys Appellate Prosecutor’s Office. When someone convicted of a crime appeals, the office responds on behalf of prosecutors.

RICHARDSON: So, I am representing essentially the people of the state of Illinois.

For $50 an hour. Not exactly market-rate wages for an experienced Chicago-area attorney. But Richardson enjoyed the work, so she did it a few times a year.

RICHARDSON: You almost always learn something. Even the law may be fairly settled, but there’s a little wrinkle in the facts of the case, or there’s a part of statute that hasn’t been interpreted before. So for me that’s a lot of fun.

What was not a lot of fun was waiting to be paid. Ten years ago, Richardson would only have to wait a couple months at most to get her money. The delay started growing about three years ago. And this past year...

RICHARDSON: It started really stretching out. And the last two cases that I did, it was eight to nine months for one, and six months for the other.

The appellate prosecutor’s office eventually told Richardson to write a letter requesting the $4,000 payment, and passed it on to the comptroller. One day later, the check was issued. But Richardson has decided to turn her focus now to private work.

RICHARDSON: I am not going to continue doing timely, quality work for the state of Illinois, if I’m not going to be paid timely for it. I don’t take it personally. I didn’t resent it. I just said, “I’m not going to do it anymore.”

That is not a luxury that Claassen Construction, the small business in Rushville, can afford. Susan Claassen says despite the delays, despite problems paying her company’s own bills, despite all the frustration, she will still go after state business in the future.

CLAASSEN: Yeah, we would. I know, isn’t that sad to say? It’s just the economy is hurting so bad - especially the construction business right, you know, what the home building construction is like right now. I don’t know anybody that’d turn down a job, unless they’re stupid.

The delay doesn’t just hurt businesses like Claassen’s or drive away experienced contract workers like Richardson; it also hits taxpayers. Both Claassen and Richardson are owed interest from the state for their long overdue bills. Not surprisingly, that interest hasn’t yet been paid.

In recent years, the comptroller’s office has become basically the complaint office for many of the state’s fiscal woes. And the way it prioritizes payments and handles hardship requests could change in a few months, when the incumbent, Dan Hynes, leaves.

The Democrat trying to replace him, state Representative David Miller, says he wants to streamline payments to vendors working in underserved areas. That’s a suggestion dismissed by the Republican nominee, Judy Baar Topinka, who - in a statement - says, “Comptroller is not a social engineering office, it exists to manage state finances.”

Those state finances will continue to include a lot of hardship, as long as they remain so far out of whack.

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