As vendors and healthcare providers who do business with the state of Illinois continue to wait months to be paid for services, a report from the Chicago Tribune this week highlights the dire scenario of Illinois’ backlog of unpaid bills if the state’s ongoing budget impasse continues in Springfield.
Unpaid bill estimates as high as $15 billion could be reality in Illinois by next July if lawmakers can’t come to agreement on a balanced budget proposal. The inability of the state to pay its bills on time also comes with a steep interest cost, to the tune of hundreds of millions of dollars. Last June, Illinois faced a bill backlog of $7.6 billion, but that has since grown to $10.7 billion. In addition to unpaid bills, current fiscal year spending is also on pace to be more than $5 billion out of balance – if passing a balanced budget remains elusive. Also this week, Fitch Ratings has downgraded Illinois’ $26 billion in general obligation bonds to BBB from BBB+. In issuing their report, Fitch’s noted the downgrade “reflects the unprecedented failure of the state to enact a full budget for two consecutive years…”
With the backlog and credit downgrade in mind, Senate leaders are taking the lead on tackling the state’s financial woes with negotiations continuing on a comprehensive budget framework that could ultimately put the state on a path toward a balanced budget. The framework includes budget cuts, as well as structural reforms that would grow Illinois’ economy, create jobs, and help the state regain its fiscal footing.