COMPTROLLER MENDOZA RELEASES SECOND DEBT TRANSPARENCY REPORT

The report lays out the consequences of going two years without a budget and reveals liabilities that Governor Rauner must address in his budget proposal

SPRINGFIELD, IL — Comptroller Susana A. Mendoza has released the state’s February Debt Transparency Report. The report lays out the consequences of going two years without a budget and reveals liabilities that Governor Rauner must address in his budget proposal.

The Debt Transparency Report provides a detailed monthly snapshot of the state’s bill backlog by compelling state agencies to comprehensively disclose liabilities they are holding, including late payment interest penalties, bills at the agency level and unappropriated liabilities and obligations.

“The Governor’s own budget office recently cited the first Debt Transparency report in a Senate budget hearing. Clearly, it is a useful resource for him and lawmakers as they begin the budget process for the next fiscal year,” Comptroller Mendoza said. “It is my hope that because the Governor is fully aware of the fiscal challenges our state is facing, he will address them in his budget plan. He can’t deny the numbers reported by his own state agencies.”

Comptroller Mendoza issued the report in time for lawmakers to have the most up-to-date numbers as they evaluate the Governor’s budget proposal today.

“The Comptroller’s Debt Transparency Report is an important resource for lawmakers as they set about crafting a smart, realistic state budget for next year,” said state Senator Andy Manar, D-Bunker Hill, who is chairman of one of the Senate’s two appropriations committees.

“It’s Budgeting 101,” Manar said. “We must be able to analyze past spending and the debt that already exists if we are going to attack the state’s fiscal problems and make sound decisions about cuts and revenue going forward.”

The state’s general funds bill backlog stood at $9.231 billion on Jan. 31, 2018 with $2.876 billion of that total at state agencies. The Debt Transparency Report indicates that as of Jan. 31, the state owed a total of $946 million in late interest penalties. The amount of interest owed is expected to grow as payment delays continue.

“These reports have made it very clear that Governor Rauner’s talk of fiscal discipline is nothing more than political rhetoric,” state Rep. Fred Crespo, D-Hoffman Estates, said. Crespo is chairman of the House General Services Appropriations Committee. “If the governor continues to play games, the General Assembly must move forward cooperatively to address the billions of dollars in damage done by the budget crisis. Taxpayers deserve no less.”

Eighty-three of the 84 state agencies and universities required to report responded for the reporting period ending Jan. 31, 2018. Illinois State University failed to submit by the publication deadline and was in non-compliance with the state statute. The university has since submitted its report.

State agencies reported an estimated total of $554 million in late payment interest penalties. Another $362 million in late interest vouchers was pending at the Comptroller’s office, an increase of $246 million from the December reporting period, mostly due to CMS submitting late payment interest penalty bills to the Comptroller’s office.

Agencies with the largest late payment interest penalty totals were the departments of Healthcare and Family Services with $236 million; Central Management Services with $249 million; and Corrections with $51 million.

There continues to be $2.3 billion in unappropriated liabilities held at state agencies. (This number should be viewed as a separate data point from the bill backlog projection. Agencies are reporting insufficient appropriations when compared to estimated total fiscal year liabilities, so there is some overlap with the bill backlog estimate, but it is also likely that not all of this amount is captured in that total.)

These unappropriated liabilities are due to actions taken by the Rauner administration during the impasse when state agencies entered into contracts with providers and businesses without the legal authority to spend. Until appropriations for these liabilities become law, these bills cannot be submitted to the Comptroller’s office for payment. They will remain at the agencies, and many of them will continue to accrue late payment interest penalties.

“This is the Rauner administration’s spending, and the Governor needs to tell lawmakers today how he plans to pay for it,” Comptroller Mendoza said.

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You can download the PDF version of this release here.