Comptroller says unpaid bills could exceed $8.5 bill by end of year

CHICAGO — Comptroller Leslie Geissler Munger announced Wednesday that if the state continues its current rate of spending without a balanced budget, Illinois’ backlog of unpaid bills to schools, hospitals, businesses, social services and other vendors will exceed $8.5 billion by the end of the calendar year.

Munger said court orders, consent decrees, and statutory continuing appropriations (including debt service, pension payments, tax refunds and lawmaker salaries) are funding 90 percent of the state’s bills even though the General Assembly and Governor have been deadlocked on a budget since July 1.  The problem is, the spending is based on FY 15 levels while revenue is based on FY 16 levels, which is running considerably lower due to the sunset of the temporary tax increase in January.
The unpaid bill estimate does not include payments for higher education, employee-retiree health insurance, student MAP grants, some Lottery winners, commercial spending, and other bills that will not be processed until a budget in place. Those expenses could account for an additional $4.3 billion in spending annually.
“Just over two months ago, I stood before you to warn that if the General Assembly and Governor were unable to pass a balanced budget, there would be severe consequences for the state,” Munger said. “Today I’m here to say that those consequences have come to pass and the situation will become more dire the longer we try to fund state services without a budget.”
At the end of August, the state’s unpaid bills to schools, hospitals, businesses, social service agencies and others totaled about $5.5 billion. That number has grown to $6 billion today. If there is no budget in place and the state’s spending trajectory continues, it will enter the New Year on January 1, 2016 owing an estimated $8.5 billion in unpaid bills. As the backlog grows, the state’s cash flow gets tighter and payments to nonprofits and other state vendors for provided services face further delays, Munger said.
Munger will continue to prioritize payments to nonprofits that serve children, the elderly, people with developmental or intellectual disabilities, and other vulnerable residents. They depend heavily on state funding and provide critical services at a lower cost than it would cost the state, she said.
“We will continue to do everything in our power to keep the state and our human service organizations afloat, but to be clear – our office performs triage every day simply to ensure the State of Illinois lives up to its core commitments,” Munger said. “For the sake of our families, businesses and organizations, it is time for members of the General Assembly to sit down with the Governor to find common ground and pass a balanced budget so we can fund our critical priorities.”