State Pays $1 Billion in Late-Payment Charges

Illinois — The first report from the newly-passed debt transparency act is in and the failure to pay debts on time has cost Illinois $1 billion in late-payment penalties. Comptroller Susana Mendoza reported the state had $9 billion in overdue bills on Dec. 31 with almost $2.5 billion still at individual state agencies. It was $8.8 billion Monday, with some of them carrying late-payment charges of up to 12 percent annually.

An impasse between Illinois’ Republican Governor Bruce Rauner and Democrats who control the legislature left the state without complete budgets for two straight years. That situation ended in July when lawmakers enacted a fiscal 2018 spending plan and income tax rate increase that overruled Rauner’s vetoes.

The budget’s enactment stopped Illinois’ credit ratings, which are the lowest among the 50 states, from slipping into junk. Despite the budget stalemate, Illinois continued to operate on spending mandated by state law or by court orders, ballooning the unpaid bill backlog to a record high $16.675 billion.

The report also put into writing something that Comptroller Susana Mendoza has claimed for months – that Governor Bruce Rauner has been spending without the approval of the general assembly. Roughly $2.3 billion has been spent without ever getting the legislature’s okay.

In response to the report being made public, Governor Rauner says he will propose reversing last year’s income tax increase through a step down process over several years. Rauner also proposed cutting wasteful government spending. Though he offered no specifics on just how this would help make up the 2 billion dollar deficit.



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