This just in from the ARC of Illinois

[Guest guest]

Most of you have probably received this directly, but since it

pertains to one of the ongoing discusson threads, I am posting it:

November 14, 2008

Leaders in The Arc:

This story will come as no surprise to you! The Comptroller is

seeking authority to borrow money to speed up payments to providers.

Tony auski

The Arc of Illinois

815-464-1832

State owes $4 billion in unpaid bills

Comptroller Hynes warns record amount will grow to $5B by March

---------------------------------------------------------------------

-----------

By DOUG FINKE

THE STATE JOURNAL-REGISTER

Posted Nov 13, 2008 @ 11:54 PM

Last update Nov 14, 2008 @ 10:02 AM

---------------------------------------------------------------------

-----------

Illinois' backlog of unpaid bills has hit a record $4 billion, and

Comptroller Dan Hynes said Thursday the situation is " potentially

catastrophic " if allowed to continue.

In a letter to Gov. Rod Blagojevich and state legislative leaders,

Hynes said the backlog will hit $5 billion in March, and it will

take his office 20 weeks to pay bills once they hit his office.

Often, state agencies hold on to bills for days or weeks before

handing them over to the comptroller for payment.

Already, Hynes said, his office has had to expedite payments to two

vendors who threatened to cut off services to the state unless they

were paid. One provides food service to a state prison, and the

other supplies gasoline to state police cars.

" These are not hypotheticals, " Hynes said. " We were able to avert

those crises, but it is getting untenable. If the backlog grows by

$1 billion, we will lose flexibility. Next time, we may not be able

to do it. "

About $1.5 billion of the backlog is from health-care bills for the

poor. The remaining $2.5 billion covers " the entire spectrum of

state service providers, vendors and institutional payees " Hynes

wrote in his letter.

If the situation isn't corrected, the impact will spread, Hynes

warned. Although state aid payments to schools have been made on

time so far, other payments - like reimbursements to schools for

transportation and special education costs - could be delayed in the

future, he said.

Further payment delays could force some businesses to close their

doors or cause more health-care providers to refuse service to

patients dependent on state assistance, he said.

Hynes wants lawmakers to pass legislation making it easier for the

state to borrow money for short periods of time to catch up on

payments. It would allow the comptroller to declare a " fiscal

emergency " that would expedite the borrowing. Hynes also suggested

the state open a line of credit that can be tapped as needed to

speed up payment of bills.

" I am in no way suggesting it will fix our chronic budget problems, "

Hynes said.

Asked what is needed to fix that, Hynes said, " We need to address

this first. "

Gov. Rod Blagojevich's office did not respond to a request for

comment.

Earlier this week, Blagojevich's office said state revenues will

fall $800 million short of projections because of the recession.

The Senate Democrats' top budget person, Sen. Donne Trotter of

Chicago , said borrowing money right now may not be a good idea

because of interest costs. He said the state should tap into

its " rainy day " fund first.

Hynes said money in the rainy day fund was used in July.

Trotter's Republican counterpart, Sen. Radogno of Lemont,

also didn't think much of borrowing money.

" That's exactly what's gotten us into this problem, " Radogno

said. " Continuing borrowing is not a good idea. They're going to

have to look at making cuts. The wiggle room is gone. "

Capitol Bureau chief contributed to this report. Doug

Finke can be reached at 788-1527.