St. Louis Post Dispatch

Illinois remains $5 billion behind in pay vendors and nonprofits

Friday, June 04, 2010

SPRINGFIELD, Ill. — As a provider of in-home assistance for seniors, St. John's Home and Community Care of Collinsville partners with the state of Illinois, operating on grants through the state departments of Aging and Human Services.
But Illinois hasn't been much of a partner lately.
"I certainly don't want (cuts in) services, although we expect it's inevitable," said Nancy Berry, executive director of the organization, which is struggling to keep the doors open because the state has fallen behind more than $120,000 in promised funding.
Berry has had to consider borrowing to keep the organization going. "It's very discouraging to me that our legislators have not shown the backbone to provide a real solution."
Though Illinois' schools and hospitals have earned the most headlines as victims of the state's budget crisis, they're not alone. Vendors, pharmacists, social service providers and others who provide goods and services to the state aren't getting promised payments, with no resolution in sight.
"Private sector companies could not get away with what the Illinois government has gotten away with for these last several years," said Doug Whitley, president of the Illinois Chamber of Commerce, who calls the state a "shameful" partner for those organizations.
"The state takes this attitude that 'we're good for it, someday,'" he said. "Meanwhile, the business is on the hook for the expense and many times have had to borrow money to continue to operate."
Illinois faces a $13 billion budget shortfall in the coming year, with a resulting cash flow crisis that has stretched through several years now.
As of Wednesday, the state was about $5 billion behind in paying some 240,000 vouchers from businesses, schools, cities and others who are owed money, according to the Illinois comptroller's office, which cuts the checks.
The state has been consistently behind in paying vendors for several years. Some haven't been paid since October.
"The backlog is the largest it's ever been. The wait is the longest it's ever been," said the comptroller's spokeswoman, Carol Knowles. "Every day, all day, we hear from vendors who are requesting emergency payments to make their payrolls or to keep the lights on."
That kind of emergency request, accompanied by documentation, theoretically can move a struggling vendor to the front of the payment line. But in practice these days, said Knowles, "everything is an emergency. It's a triage situation."
Gov. Pat Quinn has called for a tax hike, combined with heavy borrowing, to address the crisis, but the Legislature — perhaps eyeing the November elections — has refused to do either. Lawmakers also have failed to make the deep budget cuts that many say are the only alternative.
Instead, the Legislature left Springfield on May 27, giving Quinn authority to spend as he sees fit, but without approving enough money to fill the backlog of unpaid bills. Without spending cuts or higher revenue, it's a mathematical certainty that the $5 billion to $6 billion backlog will simply continue being pushed forward.
For the Illinois Center on Autism in Fairview Heights, it has meant borrowing to cover the roughly $235,000 in state grants for its in-home service program and work sponsorship program that haven't come through. Executive Director Susan Szekely is anticipating the worst for the 200 families that use her center's services.
"We're going to have to borrow, and it costs us," she said. "History has been that social services take the financial hit from the state, and we already know it's coming."
Pharmacists in particular have found themselves struggling to keep up when the state doesn't meet its obligations. Steve Clement, owner of the Copper Bend Pharmacy in Belleville, said the state's budget woes are difficult for independent drugstores that don't have the large cash reserves of chains such as Walgreens and CVS.
"It's like a roller coaster you've never been on before," Clement said. "You never know what's around the corner."
Clement said the biggest problem is consistency with Medicaid payments.
"They pick and choose which bills to pay," he said. "So, you never really know when you'll get your money. We have some outstanding bills dating back to January."