The Illinois General Assembly passed a record income tax increase on individuals and businesses in 2011. And Gov. Quinn promised that it specifically was "designed to pay our bills."
Nearly three years and $18 billion in new tax revenue later, Illinois’ unpaid bills are still growing.
Illinois Comptroller Judy Baar Topinka estimates that Illinois’ 2013 backlog will grow to $8.1 billion this month. The backlog is expected to grow to $8.7 billion in October and to $9 billion by the end of the 2013 calendar year.
When Illinois sits on its multi-billion dollar backlog of bills long enough, taxpayers have to pay a penalty.
Illinois is required by law to pay interest of 1 percent a month on its unpaid bills, also called invoices, when they become more than 90 days old.
According to the comptroller’s most recent numbers, Illinois paid $186 million in interest payments on its unpaid bills in fiscal year 2013. That’s 215 times the $866,000 in interest payments paid by the state in fiscal year 2003.
This is a trend that taxpayers simply cannot afford. What’s more, it’s a tab they shouldn’t have to pick up in the first place.
The growing stack of unpaid bills and interest penalties are the result of Illinois’ decades-long spending problem. Since 1990, state spending outpaced the growth in inflation and population by 3-to-1. And pushing taxes even higher to maintain this rapid growth in spending won’t solve the problem. Lawmakers should instead embrace the basics of good public policy – balancing the budget and reining in spending.
Ben VanMetre is a Senior Budget and Tax Policy Analyst with Illinois Policy Institute.