Illinois' debt crisis fast changing and difficult to keep up with, fiscal advocate finds
With Illinois' interest penalties alone approaching $1 billion, Truth in Accounting Director of Research Bill Bergman is wondering who is servicing the state's debt, an area where things can change very fast.
Bergman recently made a blog post, "Who are Illinois' loan sharks?" about some unintended consequences of the state's Debt Transparency Act, which he said is "good legislation" passed by the General Assembly last year. He said he based that blog on the latest report posted on Illinois Comptroller Susana A. Mendoza's website.
"Later in the morning, the comptroller released a new report for the period ended Feb. 28, 2018," Bergman told Prairie State Wire. "The interest penalties continued to grow, as expected in last month's report."
Bergman added a paragraph to the top of his post about the new worrisome development in the state's continually worrisome debt crises.
"According to the report, interest penalties increased to $983 million for the period ending Feb. 28, 2018," Bergman wrote in the addition to his blog post.
"The paragraph discussing those penalties once again closed with 'The balance of owed interest is expected to grow as payment delays continue'."
That in mind, Bergman said during his Prairie State Wire interview that he had a recommendation for the comptroller to help those trying to keep up. "Going forward, it would be helpful if the comptroller included dates on those monthly reports, the dates they are released," he said.
Before the latest news broke about the state's interest penalties, Bergman's blog post referred to the huge amount of Illinois' unpaid bill backlog, which continues to be bad.
"The state’s unpaid bill backlog stood at $9.2 billion at the end of January, roughly unchanged from the previous months' report," Bergman said in his blog post.
"But the latest report also identified interest penalties of $946 million. That amount was reported last month as $887 million -- a 7 percent increase in a single month, despite the roughly unchanged bill backlog."
The Debt Transparency Act is a good way to let the public know where the state's debt is largely held, Bergman said in the interview.
"The public could be well served by a Debt Transparency Act report that identifies the parties to whom the state owes the money, including intermediaries like factoring enterprises," he said.
Keeping up, or trying to, is only a way to observe the debt crisis as it constantly hangs, like the sword of Damocles, over the state, Bergman said. The anxiety is more keenly felt by those whose lives and livelihood rise and fall with that crisis, he said.
Which raises an obvious question about who might be benefiting from the state's continued debt crisis that is causing so much suffering.
"Late state payments have caused some outside agencies to curtail their operations and lay off workers, reducing the quantity and quality of welfare services provided to poor people in the state," Bergman said.
"Wouldn't it be ironic if these late payments were a profit center for other parties?"