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updated: 10/17/2011 7:56 AM

Suburban businesses struggle as state stiffs them on bills

Suburban businesses struggle as state stiffs them on bills

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  • Advocate Good Shepherd Hospital near Lake Barrington is one of the suburban businesses suffering from missing payments from the state of Illinois, for low-income patients. Other, smaller businesses are suffering, too.

       Advocate Good Shepherd Hospital near Lake Barrington is one of the suburban businesses suffering from missing payments from the state of Illinois, for low-income patients. Other, smaller businesses are suffering, too.
    DANIEL WHITE | Staff Photographer

 
 

Second in a series

Advanced Commodities in Bartlett supplies food for Illinois prisons. DuPage Tire and Auto in Lombard keeps state police cars running smoothly. Advocate Health Care treats people who are ill and low-income.

None of them can count on prompt payment from the state for doing those jobs.

Illinois' policy of letting its bills languish unpaid for months at a time has left thousands of suburban businesses -- already grappling with the sour economy -- in a tough spot.

They want or need the state business in the belief the overdue payments will come in sometime. Yet the unpredictability of getting paid by Illinois stifles plans for hiring or business expansion and puts a damper on the local economy.

"It freezes up a lot of capital that used to be flowing to other businesses," said Arlington Heights Chamber of Commerce Executive Director Jon Ridler.

Illinois has $67 million in overdue bills to businesses across the state.

That's part of a total backlog of unpaid bills worth $5 billion last month, with nearly half of that amount more than 30 days overdue, according to an Associated Press analysis.

Suburban businesses that are waiting for state money run the gamut of industries. Hospitals are owed millions of dollars. Funeral homes throughout the area are waiting to be reimbursed for burying people who qualified for public aid.

Advanced Commodities is owed nearly $600,000 in bills more than 30 days old for its food services.

Modern Optical, an eyeglasses company based in Roselle, is owed about $250,000 for its services to the Illinois prison system.

Multiple suburban prosthetics companies are owed money by the Illinois Department of Healthcare and Family Services.

And many more suburban businesses are in the same boat.

Even companies not doing business with the state feel the effects, said Melissa Hernandez, president of the Northern Kane County Chamber of Commerce. Workers might avoid making a big purchase or skip taking a trip if their company is struggling because of money owed by the state.

"You're concerned about your job," Hernandez said.

For some business owners, it's mostly the principle that fuels their frustration.

Illinois has about $926 in past-due bills owed to Mark Drugs in Roselle, a rare independent pharmacy in the suburbs.

Mark Mandel, the owner, says that's mostly reimbursements for medical equipment -- wheelchairs, walkers, etc. -- bought by people on Medicaid.

He says the state's delinquencies don't hamper his pharmacy too much -- equipment is a small part of his business. But the late payments seem a little hypocritical.

"If my taxes are late, I'm definitely penalized," Mandel said.

Many suburban businesses didn't return calls asking how the state's bill backlog affected them.

A person who answered the phone at one suburban business that's owed thousands of dollars didn't want to talk about the state's financial delinquencies.

"I don't know if I'm comfortable doing that," he said. "I don't want to bad-mouth anybody."

Though the state is behind in paying its bills, for some companies, business with the government can remain a source of income during an otherwise tough economic time.

And others say the state payment backlog is getting better.

DuPage Tire and Auto frequently does work on police cars for the state, sometimes leaving the company in the hole when the state doesn't pay its bills on time.

But manager Bob Shanahan says his experience doing business with Illinois has improved significantly.

"They're a lot better off than they were four months ago," Shanahan says.

The shop was owed $1,780 in bills that were more than 30 days overdue as of Sept. 8. Shanahan says it's been as high as $20,000 in the past, which caused cash-flow issues.

"We have to pay our employees every week," Shanahan said.

Though the state is behind in its bills now, Ridler says there's could be a silver lining -- eventually. Just think, he says, if the state ever gets caught up.

"You would see a possible domino effect with that money going back into the economy," he said.

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