Even with a Budget, Illinois Still Owes Billions in Unpaid Bills

After experiencing a two-year budget standoff under Gov. Bruce Rauner, lawmakers earlier this month cheered the passage of a $40.1 billion budget.

During that unprecedented impasse, the amount the state owed in unpaid bills climbed to more than $16 billion. Today, the backlog is down to $6.6 billion.

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“One thing we’ve learned in recent years is that an imperfect budget beats no budget at all,” Illinois Comptroller Susana Mendoza said in a statement commending the General Assembly’s work to pass a spending plan. “We must keep in mind the state’s backlog of bills… and the harder we work to pay that down, the sooner we can improve the state’s credit rating. This budget puts us on a path to recovery and gives my office some tools to continue addressing the backlog of bills.”

So who is owed those billions of dollars? By and large, the state is in arrears to hospitals, health care providers and businesses, among others.

With the new budget, the credit ratings agency Moody’s has rated Illinois’ financial outlook as “stable” with the addition of legalized marijuana and sports betting revenue.

The state’s new budget also allows for $1.2 billion in bonding authority to pay down high interest rate bills first. Medicaid bills carry up to 12% per year in late penalty fees and the new interest rate on the $1.2 billion in borrowing will probably be around 4%, according to Mendoza’s spokesman Abdon Pallasch.

Mendoza is also providing back pay to 50,000 home health care workers in Illinois. Those aides got a raise of 48-cents per hour in 2017, but Rauner fought the bump in pay, even going to court over it. Both a circuit court judge and the appeals court ruled the raises should be paid.

“These frontline workers enrich the lives of Illinois people with disabilities, many of them elderly, and save taxpayers money by keeping them in their homes instead of costlier assisted living facilities,” Mendoza said in a statement. “They have long since earned the raise they won years ago.”  

Related stories:

Question of Balance: Analysts Talk State Budget, Pension Reform

Illinois Has a New State Budget. Will It Help Fix Fiscal Woes?

Recapping an ‘Extraordinarily Productive’ Legislative Session

Springfield Showdown: Lawmakers Weigh In on Session’s Local Impact

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