Skip to comments.[Illinois State] Comptroller Mendoza Reaches Out to State Leadership (We're broke and going down!)
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 states 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 Comptrollers 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 states 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 states 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.
Illinois Blue Cross hasn’t been paid in over two years yet they continue to pay claims. Illinois is still deducting premiums from the paychecks of State employees.
Don’t ask me how I know this, but I do.
I’d never buy a lottery ticket in Illinois, I already have enough IOU’s in my life! LOL!
Simple solution to at least part of that: repeal all state laws continuing appropriations.
Trying to Care. Failing miserably.
Wait! That might be some caring?
If that happens, there is a chance Illinois will no longer be a state and revert back to Federal territorial status, because a bankruptcy will result in the dissolution of state government.
Exactly. Everyone is expecting the bailout. They’re setting the stage for it now.
I don't see how that could happen -- you see the federal government is a creation of the several states, so even if a state were to cease to exist, it simply doesn't "turn over" to the federal government. Besides all that, the properties which the federal government can own are pretty limited, as Judge Napolitano observed during the Nevada standoff, as per the Constitution:
To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;—So that's:
But if a Democrat were running the state, there would be mass confiscation of private funds either in new taxes and fees, or outright thievery. Smart people would get out of Illinois pronto!
Peanuts, CAL long term -200 billion in public pensions spending 20 billion a year on services to illegals.
What’s next - pleas for immediate tax increase or Federal bailout, or both?
Illinois does not tax retirement income. I suspect that will be next or high up on the list.
Noticed their biggest debts have to do with HEALTHCARE.
Obamacare: bankrupting one state at a time.
A rational and educated person would stop digging.
They are going to buy a bunch of backhoes.
They could sell the State Lottery to the Chinese for maybe $42 billion, keep the doors open another 7 months.
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