Illinois’ State Comptroller Susana Mendoza said Friday the state’s backlog of unpaid bills is lower now than any time in recent history, but added under the state’s current tax structure and budget, it is unlikely Illinois will dig out of its financial hole anytime soon.
In Friday's online presentation held as part of SIU Paul Simon Public Policy Institute’s “Understanding Our New World” live stream series, Mendoza said the state currently owes about $3.5 billion to vendors and others, down from almost $17 billion when she took office in 2016.
“While we should celebrate the progress that we have made, we are nowhere out of the woods yet in terms of saying we are fiscally stable and times are great. They are not; we are far from that,” she said.
She said her office is able to pay vendors and others within the 30-day timeframe required by law.
“The last time that we were this current on paying our bills was just before Sept. 11, 2001,” Mendoza added.
However, the Democrat from Chicago said she doesn’t believe Illinois will improve its financial standing without restructuring the state’s tax system with a graduated income tax, a plan defeated by voters in 2020.
“There is a structural deficit, which means that in any given year, I’m just trying to meet the core obligations of the state – things like K-12 spending, Medicaid, all of our health care payments, public safety, human resources – all of those basic things – even with all of that, we don’t have enough revenue coming in on a year-to-year basis to cover just the most basic expenses.”
She said that was why she supported the “fair tax” amendment, which she said would have brought in an additional $3.5 to $4 billion dollars annually.
“Until we change the taxing structure to one that provides from our progressive rate, I believe Illinois is going to have continue to manage this deficit somehow and it’s going to continue to impact the bill backlog in a negative direction,” she said.
She said many of the state’s residents complain of high property taxes which are controlled on the local level. She said if the Illinois had more revenue, the state could pay “more of its fair share” for things such as education, which, she asserted, could lead to a reduction in local property taxes.
Mendoza said she believes the tax amendment failed because voters may not have felt that state leaders are honest with them.
“I think the voters rejected that tax amendment because voters weren’t necessarily voting on a tax amendment, they were voting on trust,” she said. “I think there is a massive distrust of government.”
In her comments which, at times, could be described as partisan, Mendoza blamed much of the state’s financial crisis on former Governor Bruce Rauner, a Republican, without mentioning the Democratic-controlled state legislature.
“I did not enjoy a minute of the horrible crisis that was self-inflicted on the state of Illinois during the Rauner years,” she said, calling it the worst financial crisis in the history of the state.
“I knew I could take on Governor Rauner to get our fiscal house in order as much as I could. I was excited about the opportunity. I was winning round after round after round and at the end of the day, when I won, Illinois won because we were able to stop him from damaging our state,” she said.
She said more recently, the COVID-19 pandemic required a reprioritization of expenditures to make sure the state was able to provide necessary personal protection equipment and other supplies to combat the virus. Mendoza added the delay in the federal tax filing deadline from April 2020 to July 2020, reduced state revenue over the short term.
“We had a massive hole in our budget at the worst time and that’s why we had to rely on borrowing from the Federal Reserve,” she explained.
Mendoza’s virtual presentation, moderated by Simon Institute Director John Shaw, also included a glimpse into the comptroller’s personal life including discussion on her early years, time in the state legislature and her hobbies, which include skydiving.
The discussion with Mendoza as well as other conversations in the series should be available next week on the institute’s YouTube channel at www.youtube.com/user/paulsimoninstitute.