SPRINGFIELD -- Illinois is poised to fork over a record amount of late penalties and interest payments this year to pay off vendors who are waiting months to be paid what they are owed from the state.
The increase is bad news for taxpayers who could be on the hook for an estimated $60 million because of the budget mess that has gone largely unresolved by state leaders.
Here's how it breaks down:
• An analysis by the General Assembly's fiscal forecasting office shows the state agency responsible for paying health care costs for state employees, retirees and their dependents will pay out over $28 million in late fees this year because it can't pay bills within 60 days of them coming due.
• The comptroller's office says the interest on borrowing more than $2.2 billion to catch up on late bills will cost about $26 million. Gov. Pat Quinn wants to borrow another $900 million, which will boost that amount even higher.
• And, based on recent historical data, there will be other state agencies unable to pay bills in a timely manner, accounting for millions more in late fees.
All told, the price tag for being a deadbeat state this year will be an estimated $60 million that won't be spent on anything other than borrowing or penalties.
"It's getting to be a huge number," said Dan Long, executive director of the General Assembly's Commission on Government Forecasting and Accountability, which compiled a recent report on late penalties.
The problem is causing headaches for state officials and people who provide state services and rely on state services. The failure of the state to pay its bills has caused some social service agencies to close their doors.
And, some doctors and dentists have begun passing along interest charges to patients who use state health insurance while they wait for the state to pay its bills.
The late payments are a relatively new phenomena for the state.
Just a few years ago, the state was nearly up-to-date on its payment schedule. In the 2006 fiscal year, for example, the state paid out only $1.1 million in late penalties.
A solution isn't expected anytime soon. Lawmakers don't return to action until January and most budget-related issues aren't seriously debated until late May.
Posted in Local, Illinois, Government-and-politics on Wednesday, November 11, 2009 1:45 pm Updated: 4:55 pm. | Tags: State Budget, Pat Quinn, General Assembly
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