State’s unpaid bill backlog shrinks to $3.5 billion — and in Illinois, that’s called ‘remarkable’

Illinois’ backlog of unpaid bills is down to about $3.5 billion — a fraction of the nearly $17 billion the state was behind in paying four years ago.

State Comptroller Susana Mendoza characterized that as a “remarkable” achievement.

The drop in the backlog — which, at its highest point, stood at $16.7 billion in 2017 — means Illinois can pay its bills as they come in and moves closer to paying off its debts within a normal 30-day cycle.

Currently, the oldest bills the comptroller’s office has are from Monday.

The rest of the backlog is comprised of “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,” according to a statement from the office.

“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,” Mendoza said in a statement, lauding her office’s “daily diligent management” of the state’s cash flow and the 2017 passage of the Debt Transparency Act, which has helped keep tabs on money coming in and out.

Rich Hein/Sun-Times file

Though the shrinking backlog is a good sign, the comptroller warned the state still faces fiscal challenges.

The backlog doesn’t include the roughly $3.6 billion Illinois borrowed from the Federal Reserve to pay medical bills the state saw during the pandemic. The funds the state receives through the American Rescue Plan must first be used to pay off that borrowing, according to the statement.

The office hopes the reduction in the backlog could be good for the state’s credit rating.

“We would hope that the bond rating agencies will take this into account as they evaluate future bond offerings,” said Abdon Pallasch, a spokesman for Mendoza. “Two of the three [credit rating agencies] changed their outlook from negative to stable. That’s not as good as a ratings upgrade, but it’s something — it’s moving in the right direction.”

Pallasch went on to say the office “would love to see a ratings upgrade” after the state saw numerous credit downgrades during Gov. Bruce Rauner’s time in office.

From July 2015 to late August 2017, Illinois was without a full budget, forcing state agencies to cut services though the comptroller’s office was still required, by law, to make debt and pension payments and provide funds for local governments.