CRYSTAL LAKE – Illinois Comptroller Susana Mendoza’s push to increase financial transparency in state government succeeded last year, and Wednesday was the first day that state agencies were due to file monthly financial reports with her office.
Mendoza, a Chicago Democrat, worked with Democrats and Republicans to reach a unanimous override of Gov. Bruce Rauner’s earlier veto of the Debt Transparency Act. She visited the Northwest Herald on Wednesday to talk about the new law, which she said could be “life-altering.”
The act requires state agencies each month to send the comptroller an account of what they owe to different vendors, whether the expenses are included in the budget, if there are designated funds to pay them, and estimates of any interest accrued by the debt.
The law also requires agencies to provide a breakdown of the age of each bill – age is important because many that are 90 days or older face a 1 percent a month late payment fee.
It is not the live, real-time accounting that Mendoza and some others are calling for, but it’s an improvement over the old system, which relied on an annual accounting that always was out of date, she said.
“This is potentially going to be life-altering, if you think about it in terms of how [the state] budgets every year,” Mendoza said. “Because these [recent] budgets have passed based on expenditures that have been appropriated. But they haven’t really taken into account the deficit spending that occurred in that fiscal year.”
Previously, state law only required that on Oct. 1 of each year, agencies report the aggregate amount of bills being held on the previous June 30.
These data arrive as an outdated picture of the state’s financial situation, which grows worse as each month passes, forcing the comptroller to guess at the state’s true financial situation.
Mendoza said she hopes state government will get to a point where people can call out deficit spending as it happens, with live, real-time posting of expenditures.
Illinois racked up a backlog of unpaid bills that reached $16.7 billion, in part because of the years it went without a spending plan. With the help of a $6.5 billion loan and passage of a budget – as well as an income tax increase – that backlog is down to $8.9 billion, Mendoza said.
It’s estimated that the amount of fiscal 2017 liabilities carried into fiscal 2018 is about $2.8 billion, documents show. As recently as Nov. 8, the state owed a record $16.7 billion.
Rauner’s office has said the governor supports more financial transparency at the state level, but he vetoed the debt transparency bill, saying the state “does not have adequate technology in place” to provide the information monthly in a cost-effective manner.
“That’s outrageous,” said state Rep. David McSweeney, R-Barrington Hills, who worked closely with Mendoza to pass the Debt Transparency Act. “At the end of the day, we need this information.”
McSweeney said the state needs to upgrade technology to make its finances more accessible to taxpayers, and he looks forward to working on legislation to do so. But the fact remains – Rauner lost, 112-0, when his veto of the Debt Transparency Act was overridden, McSweeney said.
“What he should have said is, ‘I’m going to sign this bill and work with the General Assembly to upgrade technology,’ ” McSweeney said.