The Hiller Instinct: 'Mass-ive Debt'
7News has discovered the Massachusetts Highway Department spent more than a million dollars on late fees for construction during the past two years. You heard that right. Just as you have to pay a late fee, or interest, if you let a bill get overdue, so does the state. And while you may not have had the money to avoid a late penalty, the state always did have the money, but just didn't pay on time.
And the Highway Department did it hundreds of times.
In fiscal year 2008, the Highway Department was late 332 times, which cost taxpayers more than $830,000 in penalties...
In FY 2009, the department was late 145 times, and the interest penalties were almost $375,000.
So, in two years, the Highway Department paid late fees totaling $1.2 million dollars.
Michael Widmer of the Massachusetts Taxpayers Foundation said, "I'm amazed. Not too much shocks me anymore in government.”
Even an expert who's been looking at state budgets for years is surprised when I show him the stats.
"We're spending a million dollars that we don't have,” Widmer said.
Luisa Paiewonsky is the Highway Division administrator in the state's new DOT- Department of Transportation.
Hiller asks Paiewonsky: “In terms of construction, you've made late payments of over a million dollars in those two years.”
Paiewonsky: “Yes we have.”
Hiller: “So has a million dollars been thrown out?”
Paiewonsky: “Um I don't think it's been thrown out, there were payments that we owed, I think it reflects inefficiencies and poor procedures that we had, especially in 2008."
Paiewonsky defends the Highway Department by citing big numbers: hundreds of active construction projects, and 3/4 of a billion dollars in expenses...but no number is big enough to hide more than a million dollars in late fees.
"I'm mad about it when I see it and when confronted about it and have to answer it publicly, yeah, I'm frustrated," Paiewonsky said.
The Highway Department is improving—this fiscal year, it's reducing late payments.
But it's too late for the million dollars that are gone to save any laid-off workers or to help anyone in need. And my guess is--right now--many of those people are dealing with late payments of their own.
I’m Andy Hiller, 7News.
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