You almost have to admire, in a conniving sort of way, the ability of a new company to figure out a way of making money off of Illinois government’s financial incompetence.
We're talking about the fact that certain parts of state government went for the entire 2016 Fiscal year (which ended last week) without being able to spend money.
THEY WEREN’T FORTUNATE enough to have court orders mandating that their services be provided and bills be paid regardless of the lack of a state budget.
So people who do business with those agencies have unpaid bills for their services. They have a legal assurance that they will someday be paid for their work, but it will be whenever the state finally gets around to things – which will come in upcoming months now that a budget of sorts is in place.
The key to comprehending this particular deal, which the Chicago Sun-Times reported on during the weekend and the Associated Press spread across the state like peanut butter on bread, is to realize that the state does have a legal obligation to pay extra to these people.
It is a penalty, of sorts, to the state for being late. Someday, these businesses could get more money than they had expected.
UNLESS THEY WIND up doing business with Illinois Financing Partners, which is a new company that is in the business of paying off people who are owed money by state government.
This company, controlled in part by former Gov. Jim Edgar, makes sure the businesses get the money they’re owed, with the understanding that when the state actually does reimburse for its debt, that payment – and any interest – will be given to Illinois Financing.
Meaning the businesses won’t gain that extra money. It will go to the company, which will wind up making its profit off of the fact that our state officials let partisan politics interfere with government operations to the point that it impacted the daily way of doing things.
In a sense, it sounds like some sort of third-rate conspiracy to make money off of someone else’s suffering one step up from bookmaking or loansharking. Although I’m sure there are laws that ensure it is completely legal.
PARTICULARLY SINCE NO one is forcing any particular business to take the deal!
Actually, I can comprehend why businesses would be eager to do business with Illinois Financing. Because it promises that companies will get the money they’re owed RIGHT NOW!!! Not at some obscure, unspecified date in the future.
When it comes to smaller companies where cash flow is important to maintain the daily operations, the idea of more money to be paid in the future is much less important than the idea of getting paid what is owed right now.
Waiting for the bigger payment could cause a company to fall so far behind in unpaid bills that they wouldn’t remain in existence long enough to collect that bigger payoff.
SO MAYBE THE companies feel blessed, in a sense, that they’re getting the money they’re owed. They can move forward, get on with their operations, and perhaps use the experience of recent months as a lesson of what can go wrong if one relies too heavily on doing business with Illinois state government.
Which is really a sad lesson to have to learn – if you think about it.
For state government is often semi-jokingly referred to as “the people’s business.” It ought to be something that companies consider a safe bet because their work will end up (or at least it’s supposed to) benefit the public.
Instead, someone has figured out a way to turn politically partisan ineptitude into a profit margin for themselves – rather than the public at large.