Past Due
Illinois has not had a budget for 8 months and counting.
Unpaid bills pile up having now reached a record $10 billion to $12 billion according to state comptroller Leslie Geissler Munger.
Vendors are furious. One vendor has lost 40% of staff that once numbered 1,000 because it has not made its payroll for 14 weeks.
Unpaid Vendors Furious
Crain’s Chicago Business phrases things mildly: Unpaid Vendors Make Frowny Face at State.
As Illinois politicians continue to squabble over a budget that should have taken effect July 1, hundreds of state contractors have been left with little more than I.O.U.s, according to more than 500 pages of documents—just since Nov. 1—released to the Associated Press under the Illinois Freedom of Information Act.
The state owes $2 million to Ashley’s Quality Care in Chicago, which provides in-home care workers to keep seniors out of nursing homes, according to chief accountant Michael Robinson. The company has not met its payroll for 14 weeks, forcing the departure of 40 percent of its previous 1,000 employees; clientele has dipped by one-third, to 800, slicing revenue.
“You go from affecting a company, to its employees, to the clients, to the social well-being of the community,” Robinson said.
Paid, Unpaid, Service Refused
- Unpaid: $2 million to Ashley’s Quality Care.
- Refused: A Department of Human Services rehabilitation counselor in Downers Grove sought a taxi for a client and received an email that “all service is on hold due to non-payment.”
- Paid: A New Jersey landlord threatened to evict Illinois Revenue Department tax auditors from their rented home in that state unless he received five months’ rent totaling $37,936.20. The bill was paid, I suspect illegally without a budget.
- Unpaid: Water and sewer bill at the 1848 Mt. Pulaski Courthouse.
- Refused & Unpaid: An Illinois Workers’ Compensation Commission arbitrator’s personalized date-stamp broke, but it wasn’t replaced because the supplier was awaiting $511.06 that was past due.
- Refused: Springfield store refuses to sell all-purpose Fabuloso Cleaner for the Secretary of State’s office.
Tip of the Iceberg
This is just the tip of the iceberg. There’s $10 billion to $12 billion in unpaid bills.
As the bills mount, some businesses like Ashley’s quality care, a business with 600 employees, down from 1000 employees may not even survive.
Meanwhile the Illinois legislature sits, insisting on the status quo.
It’s the Democrat-controlled legislature who is to blame for this fiscal mess. Governor Bruce Rauner rightfully insists no budget without reform.
Meanwhile, the bills and the hardships on Illinois vendors mount.
And in Chicago, Mayor Rahm Emanuel refuses the only solution that has a chance of working: bankruptcy.
Rauner needs to hold out for as long as it takes.
Email Speaker Madigan
Vendors who want to get paid, should consider sending House Speaker Mike Madigan a friendly note at mmadigan@housedem.state.il.us
Mike “Mish” Shedlock
Who needs vendors to stay in business. They will gladly go bankrupt for the sake of budget discipline that favors keeping official salaries intact. New vendors will appear by the grace of the free market but how will you get new government officials? those are only produced by magical unicorns and budgetary recompense.
Illinois = government OF and BY and FOR government officials and government employees.
Why would any vendor keep doing business? After about 90 days past due (standard terms) the account should have been “put on hold”.
Also, even though the State does not have a budget, if the funds are sitting there, the past due bills can still be paid just as long as the bills are legit, and that has nothing to do with a State budget. Stupid.
I went into an ale-house I used to frequent
And I told the landlady me money was spent.
I asked her for credit, she answered me “nay
Such a customer as yours I could have any day.”
And it’s no, nay, never,
No nay never no more,
The Clancy Brothers didn’t have a Chicago or Northwestern MBA but this is good advice for vendors doing business with Illinois
This is nothing new.
http://illinoisissues.uis.edu/archives/2010/03/unpaid.html – and that’s almost 6 years ago, when the unpaid backlog was “only” $3.5 billion.
Anyone currently still (or planning on) extending credit to the state right now might as well write it all off, and treat any check for reimbursement as a surprise gift.
Congratulations on your new website, Mish. I look forward to your loyal readership following you here.
Are you still carrying Of Two Minds and David Stockman?
Democrats like Puerto Rico are angling for a bail out. No. The gravy train has left the station.
Berne will bail them out with another financi,al transactions tax. Feel the Bern!
OT: Mish, can you provide Alphabetical links for all non-MSM financial sites like you did before on blogspot.com? TIA.
it is there under alphabetical links
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I grew up in Chicago, went to high school in McHenry, worked in Rockford, Crystal Lake, Galesburg, Peoria, and most recently in Charleston. After four years as an outside rep for a steel distributor, I left the industry and we fled the state last March–apparently just in time.
Not only is the state government a mess, the economy south of I-70 has been crushed by the Obama administration’s war on coal and the Saudis’ war on shale. Our home in the Ozarks is bigger than the one we left, sits on 10 acres (vs. a subdivision lot), and came with a 1200 square foot shop building on a concrete slab. Not only did it cost less than the one we left, our property taxes are less than a quarter of what they were in Illinois.
The economy in southern Illinois (ex-Metro East) has been crushed over the last 25 years as manufacturing has fled the area. Arguably, the war on coal was “fought” [and decisively lost] in the 70s and 80s, aggravated by oil prices collapsing in the early 80s and taking out a number of producers [and causing most wells to get capped]. Most of the remaining pieces of the coal industry were swept up in the early 90s.
It is a great place, though … to be from.
I think it was in Chicago, Denninger said he pulled the plug on them when they failed to pay. He said he was promptly paid.
What a Deadbeat state, Why would any State resident comply with their regulations and fees when the state doesnt..