Tags: Illinois | budget | deficit | government

Illinois Plugs Deficit as Next Year's $6 Billion Hole Looms

Thursday, 26 Mar 2015 05:20 PM

Illinois’s legislature plugged a $1.6 billion hole in the state budget, leaving lawmakers to tackle a deficit three times that size in the year ahead.

The Senate Thursday approved a plan that closes the gap for the year ending in June by cutting spending and using $1.3 billion set aside for roads, construction projects and other items. The House of Representatives passed the fix two days ago, about 10 months after lawmakers voted for a budget without enough money to cover it.

“The General Assembly is helping set a new tone for what can be achieved in Springfield,” Republican Governor Bruce Rauner said in an e-mailed statement. “While today’s action is an important start, many more tough votes and challenging decisions must be made in the weeks ahead.”

The legislation, which Rauner’s office said he plans to sign as soon as possible, is only a partial solution to the state’s financial crisis. Beset by about $6.5 billion of unpaid bills and the worst-funded pension system among U.S. states, Illinois must confront a $6.2 billion budget shortfall for the year starting July 1.

With the current year’s budget unbalanced, subsidized day- care programs had already started to run out of funds and prisons may have been unable to meet payroll in April. The Senate’s passage comes just before lawmakers are set to leave for a two-week break on March 30.

This year’s gap followed the Jan. 1 expiration of 2011 income-tax increases, which lawmakers declined to extend. Rauner has rejected higher levies to close next year’s budget hole and proposed spending cuts instead. Leaders of the Democrat- controlled legislature say the state can’t close the shortfall without finding additional revenue.

Both parties contributed to the fiscal challenges, which have been decades in the making as lawmakers delayed retirement- fund payments and used financial gimmicks to address deficits. Illinois has a $111 billion pension gap and an A- rating from Standard & Poor’s, which is lower than any other state.

Senate President John Cullerton “is glad that we could resolve our issues and come together for this fiscal fix,” Moira Dolehide, a spokeswoman for the Chicago Democrat’s office, said in an e-mail. “Now it’s time to turn our attention to larger challenges in the next budget."

© Copyright 2017 Bloomberg News. All rights reserved.

 
1Like our page
2Share
Economy
Illinois's legislature plugged a $1.6 billion hole in the state budget, leaving lawmakers to tackle a deficit three times that size in the year ahead.
Illinois, budget, deficit, government
374
2015-20-26
Thursday, 26 Mar 2015 05:20 PM
Newsmax Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved