Illinois comptroller: State $6 billion behind on its bills

Illinois is $6 billion behind on its bills, and schools, hospitals, businesses and social service agencies face ever-increasing delays in payments critical to operations, state Comptroller Leslie Geissler Munger said Wednesday.

At the current rate of spending, without a balanced budget, the backlog to vendors will exceed $8.5 billion by year’s end, Munger said at a news conference.

“Just over two months ago, I warned that if the General Assembly and governor were unable to pass a balanced budget, there would be severe consequences for the state. Those consequences have come to pass,” Munger said, adding her office is fielding over 5,000 calls a week about delayed payments.

“We’re paying bills as we can in order of first in, first out. . . . The situation will become more dire the longer we try to fund state services without a budget.”

Republican Gov. Bruce Rauner and the Democrat-controlled Legislature have been in a budget stalemate over fiscal year 2016, which started July 1. Illinois still owes about $500 million on fiscal 2015 bills, Munger said.

Since July, the state has faced a host of lawsuits filed by state employees and by advocates for the elderly, disabled and poor that have forced Munger to continue making state payroll and state aid payments despite the budget stalemate. Those payments — Medicaid payments alone are about $1 billion — when combined with other payments required by law such as debt service and tax refunds are 90 percent of the bills being paid, Munger said.

However those bills are being paid at fiscal year 2015 levels even though revenue is coming in at the lower fiscal year 2016 levels because of the end of the state’s temporary income tax increase in January, Munger said.

“Our office performs triage every day simply to ensure the state of Illinois lives up to its core commitments,” Munger said. “It is time for members of the General Assembly to sit down with the governor to find common ground and pass a balanced budget. . . . We’re at a point right now where we can’t even tax our way out of this.”

The bills backlog will reach $6.6 billion by October and $7.1 billion by November, before December’s $8.5 billion, she said.

Those estimates don’t include $4.3 billion in bills for higher education, employee-retiree health insurance, student Monetary Award Program grants and commercial and other bills that can’t be paid, including some Lottery winners, Munger said.

The lottery issue ended up in court Wednesday when two winners filed a federal class-action lawsuit against the Illinois Lottery over its claims that Munger can’t pay prizes over $25,000 without legislative authorization from a state budget.

The lottery lawsuit claims more than two dozen winners are awaiting over $288 million in prizes won since June 30. It argues the lottery should not be selling tickets if it can’t pay nor paying lottery staff and the agency’s private management company while winners are still owed.

Munger remained unfazed by the newest lawsuit.

“We cannot pay those bills until we have a budget in place. Those are not court-ordered payments. They don’t fall under continuing appropriation. They are all going to have to wait in line,” she said. “Rather than filing for a court order, perhaps they should call their Legislature and ask them for a budget.”

Earlier, a federal lawsuit forced the state to continue Medicaid payments to Cook County hospitals and other medical facilities as required under a consent decree. Another forced continued payments to agencies serving individuals with developmental disabilities under a different consent decree. And circuit and appellate court rulings ordered state employees be paid in full and on time after Munger was sued by 13 public employee unions alleging violations of their contracts.