Illinois’ budget disaster as impasse hits 3rd year
Illinois started its third straight fiscal year without a state budget yesterday, territory that could mean some universities won’t be able to offer federal financial aid, road construction and Powerball ticket sales will halt, and the state’s credit rating will be downgraded to “junk.” While a spending plan got early approval in the House on Friday, the chamber later adjourned for the day, with House Speaker Michael Madigan saying they would return Saturday - the first day of the new fiscal year.
Lawmakers are trying to end an impasse between Republican Gov. Bruce Rauner and Democrats who control the Legislature that started when the first-term governor took office in 2015 promising change. Rauner has said he’ll keep legislators at work in Springfield until they can reach an agreement, continuing a special session that is costing taxpayers up to $48,000 per day. Comptroller Susana Mendoza, who controls the state’s checkbook, warned that without a budget: “Derailment is imminent.”
How bad is it?
No other state has come close to the mess that Illinois is in. Some states have gone months without a budget - Pennsylvania had a nine-month impasse that ended last year. But Illinois’ stalemate has been unprecedented since it reached a full year. Illinois already has the lowest credit rating of any U.S. state, and it owes more than $15 billion in late payments to vendors - including doctors who provide health care to state employees and social service agencies that care for disabled people. Some homeless and domestic violence shelters have been forced to close or reduce services, and some medical offices are no longer seeing patients on state insurance unless they pay cash up front. Universities have laid off thousands of employees. Illinois also owes school districts millions of dollars for transportation, special education and other expenses.
What are the consequences?
S&P Global Ratings said earlier this month it would likely downgrade Illinois’ credit rating to below investment grade if lawmakers didn’t approve a budget by Saturday. The agency didn’t say when it would act, other than that it would be “around” July 1. A downgrade would make Illinois the first US state to be assigned “junk” status, and increase the cost to taxpayers when the state borrows money.
The Illinois Department of Transportation has said nearly 700 roadwork projects would stop, putting an estimated 25,000 people out of work, because the state can’t spend money collected through the gas tax without the Legislature approving an appropriation. The Higher Learning Commission, which accredits schools in the Midwest, has warned the ongoing lack of funding could cause some universities to lose their accreditation. Southern Illinois University President Randy Dunn said that would mean the colleges wouldn’t be able to offer federal loans and grants to students, causing more to choose colleges in other states. “We’re going into very dangerous territory,” Dunn said. —AP