ILLINOIS NEWS NETWORK
Illinois’ backlog of bills has put pressure on small businesses that do business with the state, but there could soon be some relief.
Gov. Bruce Rauner announced last week that the state will borrow $6 billion to pay off some of its $15 billion backlog of bills, and the Illinois comptroller’s office says it will prioritize payments to individual medical vendors that are owed, in some cases, hundreds of thousands of dollars each.
Some of the hardest hit vendors providing services to the state are dentists across Illinois who serve state employees. Even dentists in other states who work on Illinois state government retirees are owed tens of thousands of dollars apiece.
Illinois State Dental Society Government Relations Director Dave Marsh said a growing number of dentists are owed hundreds of thousands.
“It’s up to a million dollars for a number of dentists,” Marsh said, “but we did run a list of the dentists and what they’re owed and many, many of them are substantially over a half-a-million.”
Marsh said some dentists owed as much as a million dollars are unable to invest in and grow their small business.
“They’re maxed out on their borrowing,” Marsh said of some dentists. “They’ve taken second mortgages out on their homes just to keep operating, and many of them have reached into their retirement plans to borrow money.”
Marsh urged the state to pay down the heaviest debt burden owed to dentists quicker to make a real dent in the backlog, which he said is about $157 million and growing $40 million every quarter.
Comptroller Communications Director Abdon Pallasch said that’s the plan.
“So those bills will get paid,” Pallasch said, “and taxpayers will no longer be on the hook for this 12 percent interest that we’re paying on these bills.”
Pallasch said nearly half of the $15 billion backlog is tagged with the 12 percent interest rate.
Rauner announced the $6 billion in borrowing in hopes of getting a lower interest rate.
A statement from Rauner’s office last week said the “Income Tax Proceed Bonds must be issued before Dec. 31, 2017, and must be used to pay for expenses vouchered from general funds or state employees’ group health insurance costs that were incurred before July 1, 2017.”
Pallasch said another priority when the bond proceeds come in is to pay past due Medicaid bills and get some federal matching dollars.
“We will increase the value of the $6 billion through some of the federal matching funds,” Pallasch said, “but we’ve still got a long way to go.”
Rauner’s office indicated how the state will pay off the bonds.
“Bonds issued under this authority must be paid within 12 years from the date of the sale,” the governor’s statement said, “and require level principal payments each year. For example, a $6 billion issuance would require 12 annual principal payments of $500 million, plus interest payments depending on the interest rate.”
Rauner said he wants lawmakers to come back this fall to close what he said is a billion dollar budget hole, and to pass meaningful reforms that will grow the economy and save taxpayers money.