Facing an unprecedented bill backlog of nearly $4 billion that could balloon to more than $5 billion by March, Comptroller Dan Hynes today urged state leaders to take immediate steps to ease the crisis which is threatening service providers and government units across Illinois.

Hynes said the 12-week payment delay vendors now face is untenable and he noted the uncertainty of the national economy makes it difficult for vendors who are owed money by the state to borrow funds to bridge the gap between the time they provide services and the time they are paid for those services.

"There can be no doubt that these record-setting payment delays pose a serious danger to the solvency and operations of any institutions that depend on state funding," said Hynes, who predicted the payment delays could rise to 20 weeks by spring. "To call this as an imminent crisis is an understatement."

In a letter to the Governor and legislative leaders, Hynes urged changes in Illinois law that would provide greater flexibility when the state borrows money and allow the state to establish a revolving line of credit to deal with the current problems.

Hynes characterized the consequences of inaction as grave and warned his call for action should not be casually dismissed. He said due to the magnitude of the problem, his office has very little ability to provide relief to vendors who are suffering financial difficulties because of the payment delays.

"Suppliers who have been threatening to suspend goods and services to the state will have no choice but to make good on those threats," Hynes said. "Payrolls could be missed and some businesses, already stretched to the limit, may be forced to close their doors for good."

Events that are already unfolding or are threatening to occur include:

• Categorical and other grants to school districts amounting to over a billion dollars will be delayed by several months causing hardships to schools across Illinois
• Food suppliers may cease deliveries to state prisons and mental health facilities
• State Police vehicles may be unable to obtain gasoline because their fuel cards will not be honored
• Nursing homes, day care centers, and rehabilitation facilities unable to pay staff or their own vendors and suppliers including utilities providers may be forced to close their doors permanently
• Local governments, universities, and community colleges may be unable to meet payrolls because of the state's failure to pay cost reimbursements
• Transit agencies may have to curtail or cease operations
• Timely payments to pension systems will be jeopardized
• Additional physicians will refuse to see Medicaid patients because of inadequate or delayed reimbursements

Last month the Comptroller urged Senators Dick Durbin and Barack Obama to provide federal assistance to Illinois and asked state leaders to join him in that request. But while Hynes said he welcomes federal assistance, the state's problems are too critical to await a rescue from Congress.

Hynes said he would work with state leaders and their staffs to obtain approval for the changes during the fall veto session this month. He said he is open to any ideas that work to ease the severity of the backlog.