October 20, 2011

Late Payments to Nonprofits in Ill. Become Routine

Illinois has the nation's biggest backlog of unpaid bills to contractors and now builds delayed payments into its budget, effectively borrowing money from nonprofit and private contractors, according to the Associated Press.

An analysis of state documents showed 166,000 outstanding unpaid bills worth $5-billion as of early September, with almost half of the total more than a month overdue. A study by the Urban Institute ranked Illinois No. 1 in the country in the percentage of charities saying late payments by state and local governments is a problem.

The delays were once intended as a stopgap as the state grappled with ballooning deficits, but the news service says they are now part of its routine budget management, with departments building spending plans on the assumption that bills will be paid months late and nonprofit groups being forced to borrow money or cut jobs and services as a result.

Human-service groups that serve the state's neediest residents have been particularly hard-hit by the backlog of bills, the Associated Press says in another article.

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