Posted on 06/21/2017 3:42:57 PM PDT by Zakeet
OFFICE OF THE COMPTROLLER FORECASTS SEVERE FINANCIAL STRAIN BEGINNING IN JULY
As Illinois' Chief Fiscal and Accountability Officer, my Office is responsible for managing the state's financial accounts as well as providing the public and the state's elected leadership with objective and timely data concerning the state’s difficult fiscal condition. As you are quite aware, I have been very vocal regarding these issues and the budgetary impasse since assuming office six months ago; however we are now reaching a new phase of crisis.
Accordingly, I must communicate to you at this time the full extent of our dire fiscal straits and the potential disruptions that we face in addressing even our most critical core responsibilities going forward into the new fiscal year. My Office has very serious concerns that, in the coming weeks, the State of Illinois will no longer be able to guarantee timely and predictable payments in a number of areas that we have to date managed (albeit with extreme difficulty) despite an unpaid bill backlog in excess of $15 billion and growing rapidly.
We are effectively hemorrhaging money as the state's spending obligations have exceeded receipts by an average of over $600 million per month over the past year.
My cause for alarm is rooted in the increasing deficit spending combined with new and ongoing cash management demands stemming from decisions from state and federal courts, the latest being the class action lawsuit filed by advocates representing the Medicaid service population served by the state's Managed Care Organizations (MCOs). As of June 15, the MCOs, and their provider networks, are owed a total of more than $2.8 billion in overdue bills at the Comptroller’s Office. There is no question that these obligations should be paid in a more timely manner and that the payment delays caused by the state's financial condition negatively impact the state’s healthcare infrastructure. We are currently in court directed discussions to reach a workable and responsive payment schedule going forward, but any acceleration of the timing of those payments under the current circumstances will almost certainly affect the scheduling of other payments, regardless of other competing court orders and Illinois statutory mandates.
For the record, however, and as a message to the financial markets, please know that debt service payments will not be delayed or diminished going forward and I will use every statutory avenue or available resource to meet that commitment. It is a necessary pledge in order to attempt to avoid further damage to our already stressed credit ratings and to make possible the additional debt financing that we all know will be required to achieve some measure of stability going forward.
Ultimately it is the only way that we can preserve what remains of our ability to provide vital services to our state's most at risk populations.
Currently, more than 90 percent of Illinois' monthly spending is directed toward core functions of state government mandated by court orders, consent decrees, or state law including continuing appropriations. These include certain Medicaid programs, debt service, payroll, K-12 General State Aid and state pension contributions. With the inevitable cash management impact related to the outcome of the MCO lawsuit, this Office will soon be facing the prospect of deciding which court order or statutory mandate the state can accommodate. I hope we can all agree that this is more than an unprecedented situation; it is simply unacceptable.
Even absent pressure from additional court orders, we still foresee unmanageable financial strains, beginning in July, that will severely limit any payments in core areas not under court mandate or consent decree that provide essential services to the state's most vulnerable individuals, including but not limited to, long-term care, hospice, and community care and supportive living centers serving the senior community, and ambulatory and other critical medical supplies for the poor and disabled.
In large part, through careful cash management and effective stewardship of the state’s General Revenue Fund, our Office has made every effort to triage this crisis in a way that has prioritized and enabled some hardship payments to the state's most vulnerable citizens and the programs that serve them while still meeting core obligations. That ability will eventually cease.
It is critical that the state's fiscal situation be addressed immediately before the cash shortages this summer cause further deterioration. I am available to discuss this situation, and possible remedies, with you personally, as a group in a leaders meeting or individually at your earliest convenience.
In the meantime, I will be meeting and communicating with other public stakeholder groups to share these same warnings.
My closing message is simple: The state can no longer function without a responsible and complete budget without severely impacting our core obligations and decimating services to the state's most in need citizens. We must put our fiscal house in order. It is already too late. Action is needed now.
I eagerly await your response as to next steps for furthering this discussion.
Dear Lord. And my state shares a border with them. We’ll be inundated with freeloaders, looking for freebies.
Øbama voters to boot!
Yup. chances are, if you win the PB in Illinois, they send you an IOU.
By cutting spending across the board right?
We’ll see. The Ruling Party has taken the approach of “Screw You and your Pro-Business Reforms Too!” to Gov. Rauner, figuring they can just run the clock out and get a Rat elected when his term is up. But they may not have that long.
So far the budget crisis has just been a joke for most people living here. Some nonprofits and agencies have been forced to close or do something else, but the schools still run, the roads get built and repaired, etc. Of course the first thing I expect them to do is close state parks and museums and such just to piss people off. But the Democrats have not been able to see the need to back off one inch from the tax and spend policies that have created this unsustainable mess. It is insane, but they have to votes to be insane. What Rauner is asking for is the same thing that is working in Indiana, Michigan, and Wisconsin - yet the Democrats reject it all and refuse to budge. Because they can. Unless something changes I expect it will take the Grim Reaper to remove some of these blockheads from office. Or maybe they will listen now that it’s one of their own (Rat Comptroller) telling them the same thing they’ve been told for years.
You mean to tell me that your state isn't already suffering from the Illinois Free Sh*t Army? Mine is. And to make it worse, I have a county government that went in on a steatlh ethnic cleansing MOU with with a rinky-dink libtard "city" that wants more of it. "Make Iowa Illinois."
Mr. niteowl77
It would have to be federal bankruptcy, due to that clause in the Constitution prohibiting states from impairing obligations of contracts.
Well HOW could THIS be true? They have a Hispanic female comptroller isn’t THAT enough after all?
The current Republican governor is a fiscal hawk. House Speaker ... aka dictator Madigan has had total control for about 18 years.
The big mistake was RINO governor Edgar trying to buy the support of the public unions. The Republican FAB5 fought Edgar on that in 1993-96 and lost as the RINOs voted with the Democrats to gave total control to Madigan.
Illinois is losing us taxpayers faster than even credit ratings. Just wait til all those State Farm and Caterpillar employees and consultants are working in GA, TX and AZ. The Central IL economy will look like Chicago. Then RINOs Davis, etal will vote for the federal bailout that they had expected under Obama. They allowed the situation to get this bad because they had really expected Obama would give them free money.
Illinois hasn’t been able to “guarantee timely and predictable payments” for several years.
Small businesses selling products to the state went out of business because they were never paid.
The city of Waukegan won a government budgeting award for assuming the state would be 3 years late with their required payments.
The won't, but they'll pretend to solve them by first firing Mendoza and replacing her with someone who won't tell the blunt truth.
Maybe they'll cross-reference people on the payroll with people the voting registrations and stop or reduce payments to registered Republicans. Then they'll find a judge who is OK with this.
They need an IL version of NY’s Big MAC.
With the exception of east Chicago, and Gary, not so much that I’ve noticed here in Indy.
Yes, and don't forget the press. "If those damn Republicans would've allowed us to triple the taxes like we wanted, we'd be OK..."
“all of them, choosing to remain anywhere but Chicago and Illinois, do you?”
Interesting pattern of opportunistic self centered politicians..
Obama.. Illinois
Clinton... Arkansas
... will make it virtually impossible for the state, or its cities for that matter, to issue new debt.
Illinois, if it were legal to do so, would be forced into bankruptcy by its creditors. But a hodgepodge of “legal” decisions mean it cannot even pay off its lottery winners, because the money has already been looted. In fact, over 90% of Illinois revenues are already subject to looting of various kinds, due to the aformentioned “legal” decisions.
The Liberal solution is easy. Tax the rich some more to get it. If that somehow doesn't cover it, they can always have Illinois write bigger checks to fill in the shortfall!
... easy peasey...
Illinois figured it was no big deal. With Hillary in the White House, the U.S. Government would just pick up the tab.
It is very important that President Trump not take that bait.
Maybe he could do it as part of very tough love. Require that Illinois congress critters support him on all the legislative initiatives he has in process, like repeal of Obamacare, national reciprocity for the exercise of the Second Amendment, and so forth.
But that is not going to happen, so allow Illinois to reap the fruits of the complete corruption, lawlessness, and irresponsibility in Chicago.
It has to be done, or it will set a precedent that will destroy the United States.
No state should be bailed out by the federal government from the consequences of its overspending.
It’s time for Dead Fish Rahm the almighty to put on his Superman costume and fly to the rescue. He’s the smartest schmuck in the world.
“It has to be done, or it will set a precedent that will destroy the United States.”
Yup.
CA’s pension fund liability alone is pushing $1T
Slash overhead. Furloughs and layoffs.
But no, I see "payroll" listed as one of the 'essential' services. Pensioners and current employees needn't worry, but contractors and healthcare workers should.
Another immediate action item: Sell unneeded assets to pay down debt. Land, mineral rights, office space, furniture, whatever. Looks like that's not happening either.
This is only the opening line of Illinois' gambit. What's next - pleas for immediate tax increase or Federal bailout, or both?
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