The bill would reveal the true cost of the state’s bill backlog.
SPRINGFIELD – The Debt Transparency Act (House Bill 3649) is headed to Governor Bruce Rauner’s desk after it passed with bipartisan support in the Senate late Thursday. The House approved HB 3649 with bipartisan backing last month.
The measure requires more accountability from state agencies regarding Illinois’ bill backlog, which stands at a record $14.4 billion today. An estimated $6.6 billion of that is being held by agencies because of lack of appropriation or processing delays. The backlog number increased by $1 billion last week 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.
This increase makes evident the need for agencies to regularly report liabilities to the Comptroller’s office, including the late payment interest penalties associated with these outstanding bills. 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. “Just think how many sick people could get timely health care if we had $800 million to pay our past-due medical bills. Think how many more low-income Illinois students could get scholarships to attend college with that money.”
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.
The state’s 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 — at a growing cost to taxpayers. 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.
Senator Andy Manar, D-Bunker Hill, sponsored the bill in the Senate.
“This is not a hypothetical problem," Manar said. "Just last week, we 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,”
Representative Fred Crespo, D-Hoffman Estates, was the House sponsor of the bill.
“Illinois is facing unprecedented fiscal challenges, and in order to overcome them we must know how much debt state agencies are actually holding,” Crespo said. “This is a common-sense reform that will ensure government is being transparent with its taxpayers, and I am happy that it passed the House with bipartisan support.”
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.
“Governor Rauner should sign this bipartisan transparency initiative. 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,” Mendoza said.
You can view the PDF version of this release here.