Thursday, November 15, 2012

Comptroller: Money for some state programs will run out before the end of the fiscal year

By Jamey Dunn

A new report from the Illinois comptroller’s office predicts that the state budget will not cover costs through the end of the fiscal year.

In her quarterly report, Comptroller Judy Baar Topinka predicts that lawmakers will likely feel compelled to increase spending before June 30, the end of Fiscal Year 2013. “As it stands, underfunding is likely to lead to pressure to increase appropriations later in the fiscal year, as it did last year to fund the state’s child care providers.” Lawmakers voted near the end of FY 2012 to increase spending on child care because money for the program ran out and most wanted to avoid abruptly cutting off funding to providers. The report forecasts that money for employee health insurance, as well as some programs in the Department of Aging, the Department of Human Services and the Department of Child and Family Services, would run out by spring. Topinka wrote that any supplemental funding approved from the General Revenue Fund would throw the budget out of whack, but she said that without additional spending, the amount of bills that would be pushed over into FY 2014 would grow significantly.

However, Topinka warns that if the money is spent without corresponding cuts or revenue increases, the state will not be able to speed up its payment of bills, either. “One thing is certain: Payment processing delays will continue for the foreseeable future,” the report said. “However, the magnitude of the delays and the overall outlook for the state’s fiscal condition will be contingent on the action of the state agencies and the General Assembly throughout the remainder of the fiscal year.” Topinka pegged the backlog of bills as of the end of October at $6.5 billion. Topinka said the state is on track to spend $5 billion in FY 2013 revenues to pay bills from the previous fiscal years.

She said that if no major budget changes occur, the backlog at the end of the current fiscal year would likely be larger than backlog at the end of FY 2012. Revenues from individual and corporate income taxes grew over the quarter, while money from sales tax dipped. But the report said that sales taxes were on the rebound at the end of October. Topinka also noted that more gambling revenue would be coming in the near future because Illinois has started granting video poker licenses to bars, restaurants and other approved establishments.

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