State ends fiscal year $6.1 billion in the red
SPRINGFIELD (AP) – Illinois finished the fiscal year with a smaller-than-projected backlog of unpaid bills thanks to a spring influx in unanticipated tax revenue, but those gains will be short-lived due to the state’s unresolved pension problem, the comptroller warned Monday.
In fact, a $1.3 billion April windfall in unexpected revenue from residents’ sales of assets before new tax laws took effect will be erased within weeks, ensuring that vendors who provide some of the state’s most important services will continue to endure long waits to get paid, Republican Comptroller Judy Baar Topinka said in a statement.
“Make no mistake, the ‘April surprise’ is history,” she said.
Illinois ended the fiscal year Sunday $6.1 billion in debt, and that figure is expected to grow to $7.5 billion by August and $9 billion by December, Topinka’s office estimated.
Topinka said putting the surprise revenue toward unpaid bills allowed the state to end the fiscal year in a better shape than it otherwise would have, but it doesn’t change the overall fiscal picture.
“That windfall allowed us to aggressively pay down bills and provide some relief to vendors, but it did nothing to address the state’s systemic budget problems,” she said.
Saddled with an unfunded pension liability that stands at around $100 billion, Illinois for several years has been delaying the payment of billions of dollars in bills for months at a time. This has caused schools, hospitals and social service agencies to borrow money, cut jobs and services and take on personal debt.
Gov. Pat Quinn has given lawmakers a July 9 deadline to agree to a plan to deal with the pension mess, which was caused by decades of lawmakers skipping or shorting payments to state retirement funds. But members of a committee tasked with finding a solution have said that timeline is unlikely.
“Despite years of hand-wringing about state finances, nothing has changed,” Topinka said. “We continue to force businesses, hospitals, schools and service agencies to wait months on end for promised payment from the state. It is unconscionable and further highlights the importance of keeping spending flat and restoring our fiscal integrity.”