Deadbeat State: Ill. Owes Billions in Unpaid Bills
Drowning in deficits, Illinois has turned to a deliberate policy of not paying billions of dollars in bills for months at a time, creating a cycle of hardship and sacrifice for residents and businesses helping the state carry out some of the most important government tasks.
Once intended as a stop-gap, the months-long delay in paying bills has now become a regular part of the state’s budget management, forcing businesses and charity groups to borrow money, cut jobs and services and take on personal debt. Getting paid can be such a confusing process that it requires begging the state for money and sometimes has more to do with knowing the right people than being next in line.
As of early last month, the state owed on 166,000 unpaid bills worth a breathtaking $5 billion, with nearly half of that amount more than a month overdue and hundreds of bills dating back to 2010, according to an Associated Press analysis of state documents.
The true backlog is even higher because some bills have not yet been approved for payment and officially added to the tally. This includes the Illinois health care agency, which says it is sitting on about $1.9 billion in bills from Medicaid providers because there’s no money to pay it.
While other states with budget problems have delayed paying their bills, the backlog in Illinois is unmatched, experts say. Year after year, Illinois builds its budget on the assumption that it will pay its bills months late — essentially borrowing money from businesses and nonprofits that have little choice but to suffer the financial hardship.
The unpaid bills range from a few pennies to nearly $25 million. In early September, for example, Illinois owed $55,000 to a small-town farm supply business for gasoline, $1,000 to a charity that provides used clothing to the poor, $810,000 to a child-nutrition program.
Even death involves delays in Illinois. Funeral homes were waiting for $2.8 million in overdue reimbursement for burying indigent people…