A press release from State Rep. David McSweeney:
Senate Approves McSweeney Legislation to Account for Late Payment Interest on State Bills
Springfield, IL – A measure sponsored by State Rep. David McSweeney (R-Barrington Hills) intended to help the State get a better accounting of what is wasted in late payment interest penalties has successfully passed both chambers of the Illinois General Assembly.
Under the Illinois Prompt Payment Act, the State must pay interest on bills that are late. In January, the State Comptroller released the first ever Debt Transparency Report, which showed that taxpayers are on the hook for about $1 billion in late payment interest penalties as of last December.
Rep. McSweeney worked with the Comptroller’s office to craft a bill that would shine a light on these payments.
Beginning with Fiscal Year 2019, House Bill 5814 requires the Governor’s budget to include an estimate of late payment interest penalties for the fiscal year.
The Governor’s Office of Management and Budget must also compile in their annual report an estimate of all the late interest payment projections for the following four fiscal years.
The bill further provides that late interest payments will not be paid if a Chief Procurement Officer has voided the underlying contract or if the Auditor General is conducting an audit and the State Comptroller is holding the contract for review.
“We are paying hundreds of millions of dollars in late payment interest and failing to factor that into the budget process,” McSweeney said.
“I appreciate the hard work of Senator Cullerton in getting this common sense bill passed. It is time we addressed the interest payments and get the state budget under control.”
The bipartisan bill was shepherded through the Senate by Senator Tom Cullerton (D-Villa Park).
It passed the Senate unanimously by a vote of 57-0.
The bill now heads to Governor Rauner’s desk for his signature.