Illinois' financial disaster gets national attention on CBS' 60 Minutes

An excerpt from the CBS report:

(CBS)  "This is the state of affairs in Illinois. Is not pretty," Illinois state Comptroller Dan Hynes told Kroft. 

Hynes is the state's paymaster. He currently has about $5 billion in outstanding bills in his office and not enough money in the state's coffers to pay them. He says they're six months behind. 

"How many people do you have clamoring for money?" Kroft asked. 

"It's fair to say that there are tens of thousands if not hundreds of thousands of people waiting to be paid by the state," Hynes said. 

Asked how these people are getting by considering they're not getting paid by the state, Hynes said, "Well, that's the tragedy. People borrow money. They borrow in order to get by until the state pays them." 

"They're subsidizing the state. They're giving the state a float," Kroft remarked. 

"Exactly," Hynes agreed. 

"And who do you owe that money to?" Kroft asked. 

"Pretty much anybody who has any interaction with state government, we owe money to," Hynes said. 

That would include everyone from the University of Illinois, which is owed $400 million, to small businessmen like Mayur Shah, who owns a pharmacy in Chicago and has been waiting months for $200,000 in Medicaid payments. Then there are the 2,000 not-for-profit organizations that are owed a billion dollars by the state. 

Lutheran Social Services of Illinois has been around since 1867 and provides critical services to 70,000 people, mostly the elderly, the disabled, and the mentally ill. The state owed them $9 million just before Thanksgiving, and they nearly had to close up shop. 

Asked how long his organization can go on like this, Rev. Denver Bitner, the president of Lutheran Social Services of Illinois, told Kroft, "Well, we wonder that too because we really don't know." 

He says they were forced to tap their entire line of credit and all their cash reserves before the state would finally pay them as a hardship case. 

"It has to be that you've sold off all your assets, you have borrowed from everybody that you can borrow from, and then, we'll think about it," Rev. Bitner explained. 

And according to Bitner, that's even though the state owes his organization the money. 

Comments

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  • I heard Dan Hynes (on Roe and Roeper) confirm that the state is 6 months behind. Thus, when Quinn said "we are paid up through 2010, now we need the money for 2011," he was engaged in deceit by not also saying that "Fiscal 2010 ended on June 30, 2010."

  • I should have added that I didn't hear Hynes say that the state was behind paying any of its employees.

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