Businesses waiting for Illinois to pay up

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Illinois has about $3 billion in unpaid bills because of the budget impasse. | Sun-Times file photo

Illinois’ mountain of unpaid bills is financially crushing some longtime vendors such as hospitals, dentists and nonprofits that specialize in caring for the sick and elderly.

With a budget deficit that could exceed $10 billion at the end of June and no resolution to a budget stalemate that’s nearly a year old, Illinois is holding back on paying longtime vendors, leading some to rethink the way they do business with state government. Some have stopped bidding on state contracts while others have been forced to cut costs and belt-tighten as they wait for their overdue payments.

One group of service providers, claiming they are owed $100 million, is suing top state officials for breach of contract and seeking payment. The city of Springfield is also backing legislation that would force Illinois to promptly pay utility bills that state agencies owe the municipality.

“Doing anything for the state is not the way to go,” said Wilma Beatty, co-owner of Springfield-based audio-visual contractor Beatty Televisual, which recently declined to bid on a $35,000 contract with the Illinois Department of Human Services.

Here’s a sampling of some state vendors who waiting for payment:

• The city of Springfield is owed $12.6 million in unpaid electric and water bills. Springfield operates City Water Light and Power and has more than 200 accounts related to the state government.

• Memorial Health System, which operates hospitals in Springfield, Lincoln, Jacksonville, and Taylorville as well as other medical offices statewide, is owed more than $83.6 million. Memorial Medical Center in Springfield has delayed plans to build an $80 million medical office building, a spokesman said.

• Stepping Stones Inc., a drug addiction treatment center in Joliet, has burned through $100,000 in reserves to maintain services and had to stop treating non-Medicaid patients in mid-February. By June 30, the end of its fiscal budget year, the state will owe the nonprofit about $300,000.

• Illinois owes about $125 million to dentists, says Greg Johnson, a spokesman for the Illinois State Dental Society, which represents dentists and dental hygienists.

• Groups that administer the Community Care Program, which helps seniors stay in their homes rather than nursing homes, are owed $212 million from the Department of Aging. More than 83,800 people participated in the program last year.

Without a spending plan, the state is unable pay any bills not required to be paid either by court order or by law, such as Medicaid. As a result, about 10 percent of all state bills — about $3 billion — remain unpaid, according to the Illinois Comptroller’s Office. Most bills fall under the Illinois Department of Human Services and Illinois Department of Aging.

The failure to pass a budget may have “irreparably damaged the state’s capability to provide social services in the future,” according to a report by the Institute for Illinois’ Fiscal Sustainability at the Civic Federation, a public finance watchdog.

At the heart of the budget standoff is a disagreement between Republican Gov. Bruce Rauner and Democratic leaders in the General Assembly.

Pay Now Illinois, a coalition representing 64 service providers, filed a lawsuit last week May 4 against Rauner and other state administrators alleging that they have gone unpaid for almost a year. The providers offer mental health care, operate rape crisis centers, and work to reduce pediatric HIV/AIDS transmission.

According to the lawsuit, Rauner violated the Illinois Constitution by vetoing appropriations for their contracts that the Democrats sent to him.

Andrea Durbin, chair of Pay Now Illinois, called the impact of the non-payment “devastating on many levels.”

“At its most fundamental, it hurts the families, communities and individuals our services were designed to help,” Durbin said. “It’s also damaging the human services infrastructure.”

Rauner’s office says the Democratic-controlled General Assembly is to blame for the impasse.

“While we understand that frustration is driving many worthwhile organizations to seek solutions anywhere, including the courts, the only solution is for the General Assembly to pass a balanced reform oriented budget as soon as possible,” Rauner spokeswoman Catherine Kelly said in a statement.

The Rauner plan has its allies in the business community.

Kim Clarke Maisch, state director of the National Federation of Independent Business, said an informal poll of its members in February showed 88 percent supported Rauner’s agenda and wanted him to keep fighting. The group surveyed 620 of its 11,000 Illinois members.

“The attitude we hear is if we don’t turn the state around now, we’re never going to revive our economy and make Illinois a better place to do business,” Clarke Maisch said.

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