Accounts payable

Mendoza and Teresi face off for controller position

SPRINGFIELD — When former Gov. Bruce Rauner and the Democratic-controlled General Assembly spent more than two years at an impasse negotiating a state budget from mid-2015 to 2017, the comptroller’s office from Illinois was thrust into the limelight.

As the state’s chief financial officer, the comptroller is often referred to as the state’s checkbook manager. But without an approved budget, the comptroller had no legal authority to issue checks against state funds, leaving vendors, contractors, health care providers and many others in the lurch.

More than 500 days after this standoff began, there was a special election for Comptroller. The last person elected to the position, Judy Baar Topinka, died unexpectedly just weeks after being re-elected in 2014.

Rauner, a Republican who had just been elected himself, nominated Leslie Munger, a business executive, to fill the seat until another election could be held to serve out the remaining two years of Mr. Topinka. And in that election, Chicago City Clerk and former state Rep. Susana Mendoza, a Democrat, won by 5 percentage points.

“And so I signed up for probably the toughest job in government at the time,” she said during a podcast interview with Capitol News Illinois. “You’ll recall, we basically had, I wouldn’t say an absent governor, but we had a governor who was actively destroying state finances and decimating the state’s social security system.”

Mendoza was re-elected to a full four-year term in 2018 and is now seeking another term, this time facing McHenry County Auditor Shannon Teresi in the Nov. 8 general election.

“I’m running because Illinois is the most corrupt, the most mismanaged, the most taxed, and the highest foreclosure country,” Teresi said in a separate interview. “And I’m running because I’m (certified public accountant), I’m a certified fraud examiner, I’m a certified internal auditor with a proven track record and financial leadership experience that the state has never previously had in its history from the controller position.”

Each candidate participated in interviews with Capitol News Illinois for the Capitol Cast podcast as part of a series of pre-election interviews conducted by the news agency. You can find the full interviews here or on most podcast apps.

The budget stalemate ended up lasting just over two years, from July 2015 to August 2017. During that time, the state’s backlog of unpaid bills peaked at $16.7 billion while the State’s credit rating fell to a notch above “junk”. status.

Mendoza cites paying off that backlog as his greatest achievement in office. Today, she said, vendors are typically paid within 10 days and the state operates on a regular “accounts payable” cycle.

Additionally, each of the three major credit rating agencies has raised the state’s rating by two notches, meaning it is still the lowest of any state in the country, but is moving in a positive direction.

“It’s just remarkable,” Mendoza said. “And I’m very proud that the people of Illinois have trusted me not once, but twice by twice electing me to this office.”

Teresi, however, counters that the credit increases and paying off overdue bills were more the result of federal pandemic relief money that was pumped into Illinois.

“(Gov. JB) Pritzker is currently campaigning on bond ratings when we have the worst bond rating in the country,” she said. “The state has collectively received over $185 billion not just for the state, but for all agencies within the state. And that has supported the economy. And they try to take credit for it.

The $185 billion figure she cites includes all pandemic relief combined, including stimulus checks to individuals, aid to local governments and schools, Paycheck Protection Program loans to companies and various types of improved unemployment benefits for laid-off workers.

According to state records, the state itself received about $8.1 billion, which Mendoza and the Pritzker administration say was all used for one-time pandemic-related expenses. Other pandemic-related revenue, meanwhile, has boosted U.S. base revenue over the past two fiscal years.

Mendoza also cites as one of his early accomplishments passing the 2017 Debt Transparency Act, which lawmakers approved despite Rauner’s veto. It required state agencies to report monthly the volume of bills they held but had not yet sent to the comptroller’s office for payment. It also required agencies to declare invoices overdue for more than 90 days and therefore subject to late payment penalties of 1% per month.

“And now agencies are discouraged from keeping these invoices for a long time because they look like they’re irresponsible,” she said. “And now you’ll see it’s rare to find an agency that keeps an invoice for longer, say 60 days, because we’ll know they do.”

Lawmakers took other steps during this time to address the backlog of bills. In 2017, when the backlog peaked, they authorized the issuance of $6 billion in bonds, bringing the total backlog down to around $9.1 billion. And in 2018, they authorized a new vendor payment program that allowed third-party investors to purchase unpaid bills that were owed to vendors and then collect interest when the state finally paid the bill.

In 2020, as the state made progress in repaying the arrears, some investors who participated in the program complained verbally when Mendoza made the decision to pay the principal owed on the bills, but not the interest penalties. . A spokesperson for his office said in an email that the state still owed just over $43 million in late interest.

Mendoza said she would like to see the program phased out as state finances stabilize.

“I hope we never get into a situation where we have to rely on these third-party lenders, because that’s what these investment companies are,” she said. “They made huge profits on the dysfunctional state.”

Teresi earned a master’s degree in accounting from Northern Illinois University and began her career as an associate with accounting firm PricewaterhouseCoopers in 2007. She joined McHenry County government in 2016 as a financial reporting and was elected county auditor in 2018.

This year, she ran unopposed in the primary as part of a slate of candidates endorsed by GOP megadonor Ken Griffin. She has focused much of her campaign on the theme of rooting out corruption in state government.

“There has been no top-down approach to tackling state-level corruption, as well as fraud, waste and abuse,” she said.

As Comptroller, she said she would launch a statewide anti-corruption initiative, noting that “most corruption and fraud is found on the basis of tips.”

“And so, as your next comptroller, I will be working with the office of the inspector general and promoting the statewide hotline charging every taxpayer, business, vendor that works with the state government to report fraud, waste and abuse.”

Teresi said she was excited about the GOP post, including gubernatorial candidate Darren Bailey, a state senator who has made several controversial statements such as calling Chicago a “hole from hell” and comparing abortion in the United States to the Holocaust.

“What we’re seeing is movement with the Darren Bailey race and the Republican Party as a whole,” she said, later adding, “I think there’s a lot of excitement. … I’m happy to run with Darren Bailey and all the other statewide contestants.

Capitol News Illinois is a nonprofit, nonpartisan news service covering state government and distributed to more than 400 newspapers statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation.