Politics & Government

State's Unpaid Bills Could Mean Less Funding for Village, Schools

Comptroller Judy Baar Topinka is warning lawmakers that Illinois' current $4.5 billion backlog could balloon to $8 billion by the end of the fiscal year on June 30.

SPRINGFIELD —Unless Illinois lawmakers make drastic budget cuts, or find a pile of money, the state's backlog of unpaid bills could almost double by July.

And that spells bad news for both the Village of Romeoville and its main school district.

Comptroller Judy Baar Topinka is warning lawmakers that Illinois' current $4.5 billion backlog could balloon to $8 billion by the end of the fiscal year on June 30.

Find out what's happening in Romeovillewith free, real-time updates from Patch.

"We’ve had to pay back pension costs that we did not last year, and that takes up some slack.  We’ve had to pay back a Medicaid match that we missed … we’ve got employee health insurance that has to be paid.  We’ve got lapse-period spending which will come in after the normal payment cycle," Topinka said. "It all adds up.”

Topinka, a Republican, estimates the health insurance payment for state workers will total $1.2 billion, corporate tax returns will cost $800 million, and lapse-period bills will top $1.2 billion. Lapse-period bills are those bills that are received after the beginning of the new fiscal year on July 1, but are for services rendered or purchases made in the current fiscal year.

Find out what's happening in Romeovillewith free, real-time updates from Patch.

Topinka's numbers are bad news for the people waiting for some of the 208,635 unpaid bills on her desk.

"There are certain must do's" said Topinka. "You have to make the payroll, by law. That's got to be done. You've got to make sure that your bond holders are paid. By law, that's a done deal.  After that comes everybody else."

As of late March, the state still owed the  roughly $8.6 million. That includes funding for bilingual education, state-mandated early childhood programs, special education funding, state free breakfast and lunch reimbursements and transportation funding.

In January, Illinois lawmakers passed and Gov. Pat Quinn signed into law a 67 percent personal income tax increase and a 45.9 percent corporate income tax increase.

Topinka said that tax hike money, close to $7 billion, is being spent on state pensions and Medicaid costs and not necessarily to paying IOUs around the state.  But Topinka said she understands why voters may have thought the income tax increase was going to get Illinois back in the black.

"How can you not assume the single biggest tax increase to hit this state … you would think it would go to paying off back bills and getting us intact," she said. 

Quinn has said for months he wants to borrow money to pay off Illinois' past due bills. Lawmakers would not go along with that idea in January, and don't appear eager to do so now.

Topinka said the solution is for lawmakers to cut spending.  She said until that happens, Illinois will stay buried under a structural deficit, which means it spends more than what it brings in.

Local impact

Meanwhile, the village is in a bit of financial limbo after Gov. Pat Quinn's threat to withhold $1 billion in income tax funding from local governments unless lawmakers approve a $4.75 billion borrowing plan to help the state pay its debts.

Cities in Illinois have a deal with state government to get a cut of the state’s income tax. In exchange, they don’t, and can’t, collect an income tax of their own.

The state opted to keep all of the income from a recently approved and only base the cities’ cut on the old rates. Cities say they need 10 percent from the total income tax, instead of the 6 percent they’re getting under the new law. 

If Quinn makes good on his threat, it could cost Romeoville hundreds of thousands of dollars in funding, Mayor John Noak said — and that could mean cutting essential services, like police and fire.

"It's unfortunate that the governor would use what is a partnership, a way that we've collected funds in Illinois that dates back several decades ... as a way to hold us hostage to help [the state] do their job," Noak said. "They've threatened our front-line services in our communities. They've threatened the jobs of police and firefighters.

"It's not the job of local governments to fix the state budget," the mayor added. "Local government's already tightened its belt."

If the village gets a smaller share of state income taxes, it could impact the recently passed 2011 budget.

"This was announced after all the local governments had already passed their levies and local budgets," Noak said. "It would [cost the village] several hundred thousand dollars."

Illinois lawmakers are now in the process of crafting a budget for the upcoming fiscal year before the scheduled legislative adjournment date of May 31.

Editor's Note: This article originally appeared in Illinois Statehouse News and was written by Benjamin Yount. Romeoville Patch Editor Shannon Antinori contributed to this report.


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