Illinois Doesn't Pay Bills; Crisis Pushes Businesses to Edge of Bankruptcy

Illinois is bankrupt, financially, politically, and morally. When it comes to politicians in jail, Illinois is at the top of the list. The volcano has already erupted, but Illinois just sits, bankrupting companies the state owes money to but has not paid.

Please consider Illinois deep in debt, doesn’t pay bills

For 35 years, frail senior citizens in southern Illinois could turn to the Shawnee Development Council for help cleaning the house, buying groceries or any of the chores that make the difference between living at home or moving to an institution.

No more. The council shut down the program Thursday because of a budget crisis created by the state of Illinois' failure to pay its bills.

Paralyzed by the worst deficit in its history, the state has fallen months behind in paying what it owes to businesses and organizations, pushing some of them to the edge of bankruptcy.

Illinois isn't bothering with the formality of issuing IOUs, as California did last year. It simply doesn't pay.

Right now, $4.4 billion worth of bills, some dating back to October, are sitting in the Illinois comptroller's office waiting to be paid someday.

Shawnee Development, for instance, is waiting on about $380,000 in back payments, officials say. That amounts to one-quarter of the council's budget for senior care in seven southern counties.

Prisons refused bullets

Illinois' deadbeat reputation has created some embarrassing situations.

A supplier refused to sell bullets to the Department of Corrections unless it got paid in advance. Legislators have gotten eviction notices for their district offices because the state wasn't paying rent. One legislator said he had to use campaign funds to pay the telephone bill after service was cut off at his office.

Illinois is on track to end the current fiscal year with about $6 billion in unpaid bills. Budget proposals for the coming year — when the state faces a $13 billion deficit — assume the same thing will happen again.

Many agencies have borrowed money to keep the doors open, but service providers say that's getting harder to do — banks are more reluctant to lend money on a promise that the state will pay up someday.

"We have had members whose banks have told them it is the creditworthiness of the state of Illinois that is their primary concern," said Janet Stover, executive director of the Illinois Association of Rehabilitation Facilities.

Democratic Gov. Pat Quinn has called for an income tax increase, but any money from that would be allocated to other areas, not paying routine bills. Republicans want to tackle the deficit through spending cuts, which would also mean letting old bills go unpaid.

It's likely that no dramatic movement in either direction will take place until after the November elections.

This just scratches the surface of what's wrong with Illinois. I have a stack of articles I have not had a chance to write about.

Quinn vs. Chris Christie

If you are looking for backbone and refreshing candor, the best place to find it is in New Jersey.

Please consider Gov Christie calls S-L columnist thin-skinned for inquiring about his confrontational tone.



If you vote for governor Pat Quinn, you have mush for brains, you are beholden to a public union, or both.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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