October 16, 2011; Source: Associated Press | The State of Illinois, which has long had a terrible reputation for timeliness in making payments on its contracts with nonprofits, has apparently taken that practice to new levels of deadbeatitude in an effort to manage its cash flow.
Current tallies have the total now owed to Illinois nonprofits at $5 billion on 166,000 billings, some of which date back to 2010. The tally is believed to be a low estimate since some bills have not yet been approved for payment. Among these are an additional $1.9 billion in bills from Medicaid providers. The state, never one to promptly pay its bills, has been getting steadily worse in recent years. As of June 2008, Illinois paid its bills seven days after the paperwork was complete. A year later that delay had reached 99 days and it had reached 118 days in June of 2011.
Illinois Governor Pat Quinn had proposed to the legislature that Illinois borrow to pay its overdue bills but this idea was rejected by the legislature. The Associated Press reports that “instead, Illinois has turned businesses, charities, and local governments into unwilling short-term lenders, using their money to operate government and disguise the depth of the state’s financial problems.”
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“We are basically bankrolling the state. It’s a ridiculous situation,” Abha Pandya, CEO of Asian Human Services, told the AP. Asian Human Services has outstanding accounts receivable with the state totaling $609,000 stretching back to November 2010. “It’s just absolutely awful and there seems to be no end in sight,” he said.
Meanwhile, providers have learned that to get placed at the front of the line for getting paid, you need to ask for a “hardship payment” and then get a friendly state legislator to make noise for you. What a ridiculous situation—something’s gotta give pretty soon, right?—Ruth McCambridge