Wednesday, April 28, 2021
SPRINGFIELD – What does it mean that Illinois’ backlog of unpaid bills has fallen from $16.7 billion in 2017 to $3.5 billion this week?
For the first time in many years, the state of Illinois can pay its bills as they come in. The oldest commercial vouchers owed to most vendors and providers of goods and services in the office right now are dated April 26 – Monday.
There remains $3.5 billion in interfund transfers owed to other branches of government, group health insurance bills with limited appropriation authority, and invoices at state agencies that have not yet been forwarded to the Office of Comptroller for payment. Comptroller Mendoza has said that when the backlog gets down to $3 billion in a $42 billion budget, that’s essentially within the 30-day payment cycle common in private industry.
“This is a remarkable day that I have been working toward since I took office in December 2016 amid the budget impasse when the previous administration was paying nursing homes and hospice centers up to a year late and they let the backlog climb to $16.7 billion,” Comptroller Mendoza said.
“Today’s achievement is the result of diligent daily management of the state’s cash flow by my office, supported by state agencies that now provide monthly updates on the number of bills and late payment interest penalties they are holding at their offices.”
The Debt Transparency Act, resulting in monthly Debt Transparency Reports, was a hallmark initiative of Comptroller Mendoza’s in 2017. It has eliminated costly surprises and has allowed for more effective management of the state’s checkbook.
Paying down the backlog has been aided by steady revenue receipts, even during the pandemic. April, when state residents and businesses pay their taxes, is generally the best revenue month for the state. Though the deadline for filing was moved back to May 17 this year, it appears many filers may have stuck with the April 15 deadline.
Comptroller Mendoza cautioned that today’s low bill backlog does not mean the state has overcome its fiscal challenges.
The backlog does not reflect the more than $3.6 billion Illinois borrowed mainly from the Federal Reserve to pay state medical bills during the worst days of the COVID-19 pandemic and return money to Illinois’s economy. She again stressed that American Rescue Plan funds must be used first to pay back that borrowing.
“I’ll say it as often as I need to: Illinois must craft a balanced state budget for fiscal year 2022 without depending on the one-time federal relief money the state received,” she said. “Responsible budget-making directs the fate of the backlog as we continue making headway with our finances and show taxpayers and the credit rating agencies that we’re serious about restoring Illinois’ financial stability.”
The Comptroller’s Office has informed the bond rating agencies of this positive development and assured them it is doing everything possible to manage the current backlog of bills and address Illinois’ finances head on. Comptroller Mendoza has asked the agencies to consider these positive factors and progress made paying down the backlog when evaluating Illinois’ credit worthiness.
The Illinois Comptroller’s website has more information about the history of the state’s bill backlog.
Find the most recent Debt Transparency Report here.