Illinois is chasing a moving target as it tries to dig out of the nation’s worst budget crisis, and a review obtained by The Associated Press shows $7.5 billion worth of unpaid bills — as much as half the total — hadn’t been sent to the official who writes the checks by the end of June.
Although many of those IOUs have since been paid, a similar amount in unprocessed bills has replaced them in the last three months, Comptroller Susana Mendoza’s office said Monday. That’s in addition to $9 billion worth of checks that are at the office but being delayed because the state lacks the money to pay them.
The mound of past-due bills tripled over the two years Republican Gov. Bruce Rauner and Democrats who control the General Assembly were locked in a budget stalemate, which ended in July when lawmakers hiked income taxes over Rauner’s vetoes.
In some cases, agencies were waiting to send their receipts to Mendoza because lawmakers haven’t approved the spending. For example, the Department of Corrections had $471 million in unpaid bills on hand as of June 30 largely for that reason.
“Ascertaining the precise nature of the state’s past-due obligations and liabilities is an essential component of responsible cash and debt management,” the Democratic comptroller wrote in a letter to Republican Rep. David McSweeney, a budget hawk from Barrington Hills who requested the review.
Mendoza and McSweeney plan to use the findings to urge lawmakers to override Rauner’s veto of legislation that would require monthly reporting of bills not yet submitted for processing. The measure, authored by Mendoza’s office, would include a breakdown of how old each bill is and which ones have received legislative approval to be paid.
“The governor supports more transparency on the state of our finances,” Rauner spokesman Hud Englehart said in an email to AP. “He vetoed this bill because the State does not have adequate technology in place to cost effectively provide this information monthly.”
The age of bills is important because many that are 90 days or older face a 1 percent-per-month late-payment fee; about $5.5 billion of the current $15.9 billion backlog is subject to the penalty. Mendoza estimates the state will ultimately pay $900 million in late-payment fees on the existing pile of debt.
The Department of Central Management Services, which handles personnel, procurement and employee health care, has most of the June 30 bundle, with $5.8 billion. That’s mostly doctor’s bills owed to employee medical providers under the state group health insurance plan.
McSweeney’s call for the overview coincided with the current Oct. 1 deadline for publicizing the amount of bills held at agencies at a fiscal year’s end. McSweeney said with Illinois swimming in debt, including a $130 billion shortfall in what’s needed to pay employee pensions and other long-term borrowing, check-writers need more exact information.
“With a $16 billion backlog of unpaid bills, and $200 billion in total liabilities when you add in the pension debt, I don’t trust this governor, I don’t trust this administration,” McSweeney said. “We need monthly reporting.”
Typically, when a governor and Legislature agree on a budget, the legislation authorizing it includes appropriations bills. If money is spent that isn’t approved, lawmakers must do it after the fact in a supplemental appropriation. Rauner has complained that the budget legislative Democrats approved in July is $1.7 billion short of being balanced. Democrats have countered that the governor spent money last year that wasn’t approved. Neither side has elaborated.
Democrats have signaled they plan to attack Rauner’s budget management during his 2018 re-election campaign
Mendoza, who beat Rauner’s hand-picked candidate in a special election for comptroller last fall, has wrangled with the governor over issues related to the deficit and the backlog, including one spat over which fund to use to pay particular bills.
The Legislature returns for its fall session Oct. 24.