For the second year in a row, Illinois entered a new fiscal year without a formal budget in place, as Gov. Rod Blagojevich has yet to act on the $59 billion operating budget sent to him by lawmakers because of a roughly $2 billion shortfall in the spending plan.
The lack of a budget doesn’t shut down government as it does in some other states. But Comptroller Dan Hynes warned in a letter to the governor and lawmakers last week that a budget must be in place by July 10 to ensure that nearly 5,000 employees are paid on time later in the month. Another 8,000 employees would be affected the following week. Without a budget, the state also will fall farther behind on bill payments.
Blagojevich last week outlined $1.5 billion in possible budget cuts he intends to make if the House fails to approve by July 9 a revenue package — including a $34 billion capital budget and a plan to sell $16 billion of pension bonds — to help balance the budget.
The Senate approved the measures in a revenue package before adjourning late last month, but the House approved the spending side of the budget without acting on the revenue measures, leaving a roughly $2 billion hole.
The revenue measures include authorization to capture about $530 million in revenues from various non-general fund accounts and approval to sell $16 billion of general obligation pension bonds. The pension financing would enable the state to avoid spending about $400 million from the general fund because it would restructure its existing pension payment schedule.
The revenue plan further relies on passage of a capital budget that would free up about $320 million in the operating budget earmarked for capital projects and generate an estimated $280 million in new tax and fees for the operating budget.
A spokesman for House Speaker Michael Madigan, D-Chicago, has said the speaker is not likely to call the chamber back to work since there are not enough votes to win passage of most of the proposed measures.