PEORIA -- Taxpayer money is being "flushed away" on late payments to vendors, according to Illinois Comptroller Judy Baar Topinka.
If the state doesn't pay its bills after 90 days, private vendors become eligible for interest, which accumulates monthly until bills are paid. Topinka said the payments are another way taxpayers are paying for years of financial mismanagement. The Peoria Journal Star reported that outstanding bills totaled roughly $6 billion last week. Last year, $86.3 million went to cover interest owed on late payments.
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"Those dollars are being flushed away, and taxpayers receive nothing in return," Topinka said. "It is the equivalent of a consumer maxing out his or her credit cards and then paying hundreds or thousands of dollars each month in interest payments alone."
Interest penalties have cost Illinois taxpayers more than $300 million during the past decade, according to Topinka's office. As the number of unpaid bills has climbed, so has the cost to taxpayers.
The newspaper's story is part of GateHouse newspapers' series on Illinois' backlog of unpaid bills.
Democrats in Springfield have proposed refinancing and consolidating the state's debt, arguing that paying 1 percent interest a month to vendors on late bills makes less sense than borrowing the funds at a lower interest rate on the open market.
Sen. Dave Koehler, a Peoria Democrat, has said such measures may be part of budget discussions this year.