Comptroller: State has record backlog of unpaid bills
<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">Illinois ended 2007 with a record amount of unpaid bills, Comptroller Dan Hynes' office said in a report issued Monday.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">According to Hynes' office, the backlog of outstanding bills stood at more than $1.7 billion. At the same time last year, the number was $1.33 billion.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">Moreover, it is now taking the office 34 business days to pay bills once they come in the door, compared to 22 days a year ago.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">"Both the backlog volume and the number of days delayed represent record levels for the mid-point of the fiscal year," the report says.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">The state's budget year runs from July 1 to the following June 30.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">"We are spending more than we are taking in," said Hynes spokeswoman Carol Knowles.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">The report blames several factors.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">From July through September, the state paid badly backlogged Medicaid bills at a faster pace than normal. At the same time, revenue from corporate income taxes is down, and sales tax growth was described as "meager."</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">The report also notes that the General Assembly this year did not authorize transferring money from restricted accounts into the state's general fund, something lawmakers have done in previous years to help cover state expenses. That's creating further cash-flow problems.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">The report warns that things could get worse, especially if lawmakers decide to divert sales taxes collected on gasoline purchases to help fund mass transit systems in the Chicago area. That money is now used to pay general state bills, and lawmakers have not determined how they would replace the $375 million if it is diverted.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">The report further cautions that tax collections tied to the economy - such as the sales tax and corporate income taxes - "point to an apparently slowing economy."</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">The Hynes report mirrors one issued Monday by the Commission on Government Forecasting and Accountability, the General Assembly's economic forecasters. It, too, warns that state sales taxes and corporate income taxes are "underperforming," putting pressure on state finances.</font></span>
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<p class="BODY" style="margin: 0in 0in 0pt"><span style="mso-fareast-font-family: 'MS Mincho'"><font face="Imperial">However, it also says that the better-than-expected performance of individual income taxes could well ease off in the next six months.</font></span>