History is not shedding a positive light on Illinois finances

Spending at the State of Illinois is on track to close out 2015 with $5.9 billion in bills it doesn’t have cash to pay.  And $2.6 that haven’t been billed to the state yet.  Unfortunately., the state has historically been in the red…well back into December 2001.  Sadly, the General Revenue Fund in 1998 had a cash positive balance of $1.012 billion..an amazing turnaround from just 5 years prior.  Here’s a graph showing our financial position over the years.Ill Unpaid bills

A decade of IL’s unpaid bill backlog shows bad pattern

Article by Matt Dietrich, Reboot Illinois, September 16, 2015  Original Article

A look Illinois’ unpaid bill backlog from years past shows a dismal financial pattern.

Illinois rang in New Year’s Day 2011 with an unpaid bill backlog that totaled $6.38 billion.

Within two weeks, in the final hours of a lame duck Legislature, Democratic lawmakers and Gov. Pat Quinn had passed a four-year, 67 percent state income tax increase to address what rapidly had become a financial crisis for state government.

This report from CBS2 Chicago was typical:

Democrats said the tax hike will help plug a $15 billion budget hole.

“We’re going to pay bills on time, and that’s a huge change,” said state Senate President John Cullerton (D-Ill.)

Cullerton emphasized that the tax hike is only one portion of a solution to the state’s budget crisis.

“The taxes are going to not borrow anymore; to make our pension payments without borrowing our pension payments; to make up for the loss in federal revenues. They’re not going for any new programs or any new spending,” Cullerton said. “There’s going to have to be further cuts, even with this tax.”

The tax hike will be coupled with strict 2 percent limits on spending growth. If officials spend above those limits, the tax increase will automatically be canceled. The plan’s supporters warned that rising pension and health care costs probably will eat up all the spending allowed by the caps, forcing cuts in other areas of government.

But Republican critics say the hike will harm middle class families.

“This means hundreds of dollars for Illinois families that they’ll be paying more to the State of Illinois, and the irony is the money they have been sending to the state has been so grossly mismanaged for the last decade,” said state Senate Republican Leader Christine Radogno (R-Lemont.)

But when the tax increase expired as scheduled on New Year’s Day 2015, the bill backlog remained at $4.36 billion. Growth in the state’s pension obligations had consumed much of the revenue from the tax increase.

With the state moving into its third month with no budget and spending continuing at an unsustainable pace, Illinois State Comptroller Leslie Geissler Munger warned that Illinois is on pace to be in even worse shape on Dec. 31, 2015, than it was five years earlier.

At the current pace of spending, Munger’s office will close the calendar year holding $5.9 billion in bills that it won’t have the cash on hand to pay. And that figure does not include an estimated $2.6 billion that has been billed to state agencies but not yet submitted to the comptroller’s office for payment…..continued

Source: A decade of IL’s unpaid bill backlog shows bad pattern