The State of Illinois just recently borrowed $6 Billion to pay past due bills of its $17 Billion backlog.My main goal was in looking into what states were paying interest rate wise on money borrowed when I stumbled across this monstrosity of a fiscal disaster. Here’s more from The State Journal-Register:
Medicaid bills, which are mostly subject to late payment penalties and also qualify for federal matching funds, that were accumulated prior to July 1 will be paid off.
None of the bond money is being earmarked to pay bills owed to human service agencies and other vendors owed money by the state. Mendoza said she is sympathetic to those entities, but said bills owed to human services agencies generally don’t qualify for late payment penalties. She said the fiscally prudent thing to do is pay off old bills that qualify for late payment penalties. The state owes about $900 million in late payment penalties.
Another financial gem found in the article was the Governor was asking for spending transparency because the state government honestly has no fiscal discipline in what it’s spending. It is so bad in the Land of Lincoln, the state stumbled across billions they were spending no one knew about.
The Senate voted 52-3 to override Gov. Bruce Rauner’s veto of the Debt Transparency Act, legislation pushed by Mendoza to give her a clearer picture of state finances. The bill requires state agencies to report monthly on bills being held in the agencies awaiting payment. Currently, those bills only have to be reported once a year. Mendoza noted that the Rauner administration disclosed $2.8 billion in spending no one knew existed when the state marketed the bill payment bonds.
Hoosier Econ 