Last week, Stateline.org, a website that compiles information and stories on state politics and policy, ran an interesting series of stories called “Behind on Bills: The high cost of states’ hidden debt.”  Focusing on state budget situations in California, Illinois, and New York, the stories highlight the troubling trend of states failing to fund programs in a timely manner and outline the downstream impacts of these state cash crunches.  It’s something to be concerned about, particularly as we’re in the third consecutive year of significant cash delays and deferrals to counties and other entities that rely on state payments to provide goods and services. 

And there’s no real end in sight.  Like it or not, the state’s cash management strategies that include billions of dollars in delayed and deferred payments to counties, schools, non-profits, private vendors, and taxpayers has become the  “new normal.”

If you’re interested in all things cashflow-related (I know… I never thought I would be either), I encourage you to check out these articles that focus on the real-world impacts of payment delays in human services, higher education, and local government.  For those of you with an in-depth interest (and who feel like being nosy), take a look at how one county executive handled delayed payments from New York State.  

California has not been in a cash-positive position since July 12, 2007.  Think about that for a moment… it’s been nearly 40 months since the state has had a positive cash balance.  During those 40 months, the state has been forced to resort to some dramatic practices in order to keep government running; unscheduled delayed payments and IOUs have had profound impacts on government programs and services, non-profit operations, and taxpayers.  Can we continue to wait for an economic recovery to send an abundance of cash into state coffers to resolve this issue?

I’m interested in knowing your thoughts.