For all our complaints about the state budget crisis and the state debt, there's one appalling fact.
We really don't know how large the debt is.
The exact amount of a debt, as any bill-paying individual certainly understands, is at best a difficult moving target, if not an impossible task altogether. Now take your household budget and add a bunch of zeroes. That's the state of Illinois.
The best the state can really do is give us a guess at what the deficit actually is. There is a state law that requires agencies to report the aggregate amount due on their bills. The report is due Oct. 1. The report contains information through June 30, the end of the fiscal year.
By the time those numbers – and that’s all the report includes -- are made available to the comptroller's office, they're well out of date.
The state also has a law assigning a 1 percent penalty to bills that are 90 days past due. That law was enacted as a sort of preventative measure. The penalty is so onerous, its very existence was supposed to prevent its use. But that hasn't happened and the report doesn’t identify how much of the debt falls into that category.
A worst-case scenario took place in May. The governor's Office of Management and Budget revealed a pile of unpaid invoices. The state's past-due amount grew by $1 billion that day.
A bill to alleviate the issue passed through the Illinois legislature. The Debt Transparency Act, HB 3649, would require agencies to report three amounts monthly: the amount of bills being held, the bills for which there are appropriations (because some bills are accrued without funds being appropriated), and the bills subject to late-payment interest penalties.
The fact that we don't presently have any idea about the latter two items is ridiculous. It's even worse than what you might consider a classic example of governmental nonsense.
The bill sounds like it should have been a slam dunk. Who would be against requiring responsible reporting of vital financial information?
Gov. Rauner vetoed the bill. While acknowledging it would be good to provide more transparency about the state’s financial condition, he said, “This legislation more closely resembles an attempt by the Comptroller to micromanage executive agencies,” and complained about the amount of time the reporting would require. And the information provided, he added, would be “decreasing marginal.”
That from a businessman. To suggest Rauner would accept this reporting arrangement in his own businesses is ludicrous. To present himself as fiscally responsible and reject a bill spelling out requirements for that responsibility is disingenuous, a word we find ourselves using about the governor more often than we'd like.
As our state's financials stand at this point, Illinois taxpayers spent $2 million a day merely on late payment fees and interest because of the state’s bill backlog. Even amid a mountain of waste, that's a significant amount.
Legislators return to Springfield on Tuesday for a veto override session. In April, the House supported the bill with a 70-40, and the Senate voted 37-16 in favor of the bill in May. There's every reason to believe the bill will become law. But there's also reason enough to remind voters and legislators about its importance.
Debt transparency itself solves little. There's still plenty of heavy lifting needed to further reduce the state's obligations.
But this will act as a good start.