State's Budget Crisis Leads to Growing Debt, Payment Penalties

Illinois owes $3 million to the FBI for processing fingerprints and conducting background checks for professional licenses and permits.

The delinquent payment is the latest unexpected result of a stalemate between the state's Republican governor and Democrats controlling the Legislature. The gridlock has left Illinois without a budget since July 1, 2015 and worsened a long-standing backlog of debt. Illinois had more than $7 billion in unpaid bills as of Tuesday.

The money owed to the FBI is old enough that it could be turned over to the federal government's collection agency - the Treasury Department.There is already nearly $19 million in an account used to pay for FBI fingerprint expertise. But without a legislative appropriation, no one has any authority to spend the money.

The FBI says states rarely fall more than four months behind in payments, but it has never cut services and it has not stopped examining Illinois fingerprints.

A spokesman for the agency's Criminal Justice Information Service, Stephen Fischer, said the agency is exploring "alternative collection and processing options" to continue serving Illinois without additional expense. He did not elaborate.

The FBI processes 260,000 sets of Illinois fingerprints annually in criminal background checks for those seeking jobs such as school bus driver or private detective or applying for permits to carry concealed firearms or cultivate medicinal marijuana.

Illinois' last fingerprint payment to the FBI was for $313,000 on July 23, 2015 to cover costs for June — the final month of the previous fiscal year, according to state records.

The state has spent more than $900 million on penalties for not paying its bills on time over the past six years, according to the Chicago-based government watchdog group, Civic Federation. 

Most of the payments are owed to state health insurance vendors and the problems have jumped with the state's backlog of unpaid bills expected to reach $9.3 billion by the end of the current fiscal year.  Laurence Msall, president of the Civic Federation, said the problem began long before this year’s state budget impasse. When the recession began in 2007, other states cut spending or raised taxes, but Illinois "relied on gimmicks, we relied on accounting sleight of hand. We don't fully fund the employee health insurance program, or we ignore our pension obligations,” he said. State lawmakers said solving the problem will not be easy."It's certainly unfortunate. I think if we would have been able to sign a budget last year, we would have been saving billions of dollars, instead of having the consent decrees that have been agreed upon in court," said Rep. Mike Smiddy, D-Hillsdale.

Msall said that the longer Illinois remains without a budget, the more an eventual solution will cost.  

 

For reprint and licensing requests for this article, click here.
Consumer banking Debt collection
MORE FROM AMERICAN BANKER