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Debt Transparency Act becomes law after Senate overrides governor’s veto

transparencySPRINGFIELD – A day after Illinois’ bill backlog reached $16.7 billion, members of the state Senate rejected a system that allows government agencies to conceal unpaid invoices from the comptroller and taxpayers for months on end.

The Illinois Senate on Wednesday voted to override the governor’s veto of the Debt Transparency Act, a commonsense measure that demands better accounting and reporting practices by state agencies so that officials can understand the true extent of the bill backlog at any given time.

“There is no reason that state agencies cannot do a better job of communicating with the comptroller each month about invoices they’ve received that will need to be paid,” said Senator Andy Manar, a Bunker Hill Democrat and the chief Senate sponsor of the act.

With the Senate’s vote to override, the act takes effect Jan. 1. The House overrode the veto on Oct. 25.

An initiative of Illinois Comptroller Susana Mendoza, the act requires state agencies to report monthly to the comptroller the bills they are holding and estimate the amount of interest that will be paid on those bills.

Until now, agencies have not been required to regularly report their liabilities. The lapse created problems for the comptroller, who is charged with balancing the state’s checkbook and prioritizing payments to vendors.

“The financial pressure on Illinois government has not lifted, as evidenced by the growing bill backlog,” Manar said. “Businesses all over Illinois are patiently waiting to be paid for services and goods they’ve provided. The least we can do is engage in basic, responsible accounting practices and communicate across offices as we try to work through this.”

“The reasoning behind why Governor Rauner vetoed this bill is nonsense,” Senator Cristina Castro (Elgin) said. “This measure ensures more accountability and transparency from state agencies when they are reporting back to the state. We have to get our state’s finances in order and this is the first step in doing just that.”

The legislation is House Bill 3649.

Other Senate Democrats reacted to the veto override:

“Good government begins with accountability and transparency,” Senator Scott Bennett of Champaign said. “Taxpayers absolutely deserve to know how their money is being spent. At the same time, we in the legislature need to know the vital information this bill will provide before we’re making critical budget decisions.”

State Sen. Omar Aquino, Chicago, released the following statement: “The state should be expected to pay its debts promptly like any Illinois taxpayer is expected to do. It is crucial that state agencies make available as much information as possible so that public officials can prioritize bills, just like working families across Illinois do every day.”

“Illinois businesses cannot continue to serve as lenders to state agencies,” Senator Jennifer Bertino-Tarrant said. “During these tough financial times, we need to promote a transparent and open financial picture to better manage taxpayer dollars.”

“Illinois taxpayers deserve to know how their money is spent,” Senator Tom Cullerton said. “This measure encourages responsible budgeting and the honest use of taxpayer dollars. I’m glad the Illinois Senate worked together in a bipartisan manner to take the necessary steps to promote a fiscally-sound budget.”

“The governor’s veto of the Debt Transparency Act was illogical and irresponsible," said Des Plaines Democratic Senator Laura Murphy. "This is commonsense legislation to provide the Comptroller with more accurate information on State agencies’ liabilities and estimated interest penalties. Coming out of a two-year budget impasse, the Comptroller’s office needs this information to better manage state payments.”

Comptroller directs $6.4 billion in bond proceeds to reduce mountain of debt

manar mendozaComptroller Susana Mendoza announced today that she’s taken swift action to dedicate more than $6 billion in bond proceeds to pay down the massive bill backlog that the Rauner administration has accrued.

Passed by a bipartisan coalition of legislators last summer, Governor Rauner vetoed the effort to reduce high-rate interest fees that would cost taxpayers billions. Lawmakers ultimately overrode Rauner’s veto. However, it took weeks of pressure from those in desperate need of state payment, Comptroller Mendoza and multiple legislators to get the administration to sell the bonds.

Likened to refinancing a mortgage to create a cost saving from lower interest rates, Mendoza reports that her office is also securing $2 billion in federal matching funds by prioritizing who receives payment from the bond proceeds.

Mendoza’s prioritization is smart fiscal management that not only saves the sate unnecessary interest fees money, but also injects billions of dollars into the Illinois economy by paying contractual product and service providers – all of whom have employees who help fuel commerce in the state.

Details of Mendoza's bond proceeds plan can be found here.

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