How Bad Is the Crisis in Illinois? It Has $14.6 Billion in Unpaid Bills
|| The Wall Street Journal
“SPRINGFIELD, Ill.—This is what happens when a major American state lets its bills stack up for two years.
Hospitals, doctors and dentists don’t get paid for hundreds of millions of dollars of patient care. Social-service agencies help fewer people. Public universities and the towns that surround them suffer. The state’s bond rating falls to near junk status. People move out.
A standoff in Illinois between Republican Governor Bruce Rauner and Democratic Speaker of the House Michael Madigan over spending and term limits has left Illinois without a budget for two years. State workers and some others are still getting paid because of court orders and other stopgap measures, but bills for many others are piling up.
The unpaid backlog is now $14.6 billion and growing. Illinois is even late paying its utilities bills to Springfield, its own capital city. On July 1, the beginning of the next fiscal year, billions of dollars in road projects are scheduled to grind to a halt.
“Right now, our state is in real crisis,” said Gov. Rauner last week, on the eve of a special legislative session where lawmakers are trying to hammer out an agreement before the state enters its third budgetless year.
Susana Mendoza, the state’s Democratic comptroller, is in charge of doling out limited funds to organizations demanding payment—a job she likens to handing out crumbs to starving children. She predicted unpaid bills will soon top $16 billion. “It is almost hard to say those numbers out loud because they seem so insane, but that’s where we are right now,” she says.
Illinois remains the business center of the Midwest with numerous Fortune 500 companies based in and around Chicago, major rail infrastructure and one of the nation’s busiest airports. That hasn’t stopped the deadlock from rippling through towns from Rock Island on the Mississippi River to Charleston in central Illinois. Hospitals and doctors are feeling the brunt as the state delays Medicaid payments and insurance payments for state employees.
Peoria-based OSF Healthcare, a network with 10 Illinois hospitals, is owed about $115 million for bills over four months old, the equivalent of 18 days of operating expenses, says Chief Financial Officer Michael Allen. “We have to be cautious about our future,” he says. “There’s just no end in sight.”
The state owes Illinois dentists $225 million, and some of those bills go back 23 months, according to the Illinois State Dental Society. Some dentists in college towns or other areas with lots of state workers are selling their receivables to keep their heads above water. Others are asking state employees to pay in cash, says Ronald Lynch, a dentist in Jacksonville.
“There are dentists who have to do this just to survive,” says Dr. Lynch. “It’s very stressful.” Dr. Lynch, who hasn’t asked for such cash payments, says he is owed about $250,000, forcing him to forgo a salary so he can continue to pay bills and his employees.
Health care is the capital’s biggest employer apart from the state itself. Springfield’s two hospital systems—Memorial Health and HSHS St. John’s—say they together are owed more than $200 million by the state. Edgar Curtis, Memorial Health’s chief executive, says he has put off a $100 million capital-expansion project because of the uncertainty. “We hate to see projects being shelved because of what is going on at the state level,” he says.
The Coliseum building at the state fairgrounds in Springfield closed indefinitely earlier this year after the state failed to come up with funds needed for repairs. The closure has cost the city tourism dollars from horse shows and other events.”
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