Legislation spearheaded by state Rep. David McSweeney, R-Barrington Hills, requiring the state to detail how much money is wasted as a result of the state not paying its bills on time has been signed into law.
State law requires the state to pay interest on bills that are more than 90 days late at a 12 percent annual rate, and even sooner for certain medical bills. Illinois’ first Debt Transparency Report showed that taxpayers are on the hook for about $1 billion in late payment interest penalties as of December 2017.
“A billion dollars is going down the drain instead of being used to pay for vital services,” McSweeney said. “That is unacceptable. We need to curb these payments. This legislation will help us do just that.”
Beginning with fiscal 2019, House Bill 5814 requires the governor’s budget to include an estimate of late payment interest penalties for the fiscal year.
In an annual report, the Governor’s Office of Management and Budget also must compile an estimate of all late interest payment projections for the subsequent four fiscal years.
The legislation further says that late interest payments will not be paid if a chief procurement officer has voided the underlying contract or if the auditor general is conducting an audit and the state comptroller is holding the contract for review.
“Our state budget is out of control, and the money that is squandered on interest is an ever-growing part of that,” McSweeney said.
The bill unanimously passed both the House and Senate.