SPRINGFIELD - Relief may be on the way for the hospitals, pharmacies and nursing homes awaiting months-late Medicaid reimbursement checks, people and companies owed tax refunds and school districts in need of state aid payments.
Gov. Rod Blagojevich's office notified the General Assembly Thursday of its intent to borrow up to $1.5 billion to pay about $2.2 billion in overdue bills owed by the state.
?That is really good news,? said Champaign County Nursing Home Administrator Jeremy Maupin.
The nursing home received a payment Wednesday for reimbursements from November 2002, and the state owes the facility a total of $756,000, he said.
?We were forced to basically cash in our last investments about two weeks ago, just to cover our payroll and expenses and our payables, so this will help out a lot,? Maupin said.
The short-term borrowing plan would put checks in the mail sometime in the third full week of May, said Karen Craven, spokeswoman for Illinois Comptroller Dan Hynes.
?We're incredibly excited,? Craven said. ?We've been receiving an incredible number of calls from vendors.?
Statewide, Medicaid payments have been delayed three to seven months, leaving nursing homes, medical suppliers, hospitals and pharmacies borrowing to meet payrolls, maxing out their lines of credit, and in some cases ending service to Medicaid patients or closing their doors entirely.
The state owes Vermilion Manor Nursing Home at least $1 million, and Hoopeston pharmacist Roger Ball said he has had to borrow money three years in a row to keep his small shop open because of cash flow problems directly linked to late Medicaid reimbursement payments from the state. Other East Central Illinois facilities are in similarly dire financial straits.
Approximately half of the $1.5 billion loan would be used to pay overdue Medicaid bills, allowing Illinois to capture another $740 million in federal matching funds, said Becky Carroll, spokeswoman for the governor's Office of Management and Budget.
Another $275 million of the short-term funds would be used to make the final two aid payments for elementary and secondary public schools on time, and $475 million would be used to pay corporate and individual income tax refunds the state owes, Carroll said.
?The governor wants to credit the Republicans, as well as Comptroller Dan Hynes (a Democrat), for working together to ensure that we are meeting our commitments on health care and education funding, and of course, to the taxpayers,? she said.
Carroll also thanked Republican state Treasurer Judy Baar Topinka and the four legislative leaders.
State Rep. Bill Black, R-Danville, endorsed the short-term borrowing plan last month, along with the rest of the House Republicans.
?Taxpayers owed income tax refunds will be paid several months sooner under this plan,? he said.
?If they owed the state, we would be knocking down their door for the money. It's only fair the state pays what is owed to (the taxpayers) in a timely manner.?
The $1.5 billion would be borrowed under the failure in revenues provision of the short-term borrowing act and the state would have 12 months to repay the loan.
The governor, treasurer and comptroller must all agree to the plan and must give 30 days' notice to the Illinois General Assembly before actually borrowing the money, although the law does not require approval by the House and Senate.
While Topinka agreed with Hynes and Blagojevich to send out the 30-day notification on Thursday, she has still not signed off on the final plan to borrow the money, said her spokeswoman, Carolyn Barry Frost.
?She doesn't want to sign off on it without knowing how exactly the money will be used and how it will be repaid,? Frost said.
?She's more than willing to work with the governor's office on this; she just wants to see that we borrow responsibly.?
This would be the second short-term loan for the state in as many years.
It borrowed $1 billion under a different provision of the short-term borrowing act last July to keep its cash flow going, and it must pay the money back by June 30.
The state still owes $525 million of that debt, Craven said.
You can reach Kate Clements at (217) 782-2486 or via e-mail at firstname.lastname@example.org.