Capitol Fax.com - Your Illinois News Radar

Comptroller can’t pay bills, cites lack of tax hike

Posted in:

Illinois

* A federal judge ordered the state to make payments to help more than 10,000 Illinoisans with developmental disabilities by last Friday. The state didn’t make the payments, citing a severe cash crunch…

Advocacy groups went to court arguing the state’s failure to make payments to agencies providing services to those with disabilities put providers at risk of closure. Closure could displace thousands of people with profound developmental disabilities.

Citing a recent legislative analysis, [Comptroller Leslie Munger’s spokesman Rich Carter] said the state is on pace to run a deficit of $5 billion. He said the office is prioritizing payments for nonprofits.

“Right now the severe cash shortages created by the budget impasse are preventing us from making those payments. We are extremely concerned about our non-profits,” he said. “Bottom line: Because of the combination of the continuing appropriations we have to pay, along with the court orders, along with the loss of the income tax revenue, we’re facing significant cash shortages right now. That will continue until we have a budget agreement.”

The state had not made a payment to the providers since the new fiscal year started July 1.

* The state’s checkbook balance as of yesterday…

* Related…

* Jim Nowlan: Courts assume Legislature’s role [Fixed link]

* State parks short $720M for repairs

posted by Rich Miller
Tuesday, Aug 25, 15 @ 10:08 am

Comments

Contempt of Court. This is what happens when you don’t govern.

Comment by burbanite Tuesday, Aug 25, 15 @ 10:17 am
Sure is a shame the General Assembly didn’t extend the temporary income tax. Guess that is Madigan and Quinn’s fault also …

Comment by RNUG Tuesday, Aug 25, 15 @ 10:18 am
Cluck. Cluck. Cluck. The chickens have come home to roost, Rauner GOP.
Try and run THAT like a bidness.

Comment by Austin Blvd Tuesday, Aug 25, 15 @ 10:18 am
The Juducial Bramch has no concern for balances, the Judical Branch’s only concern is for the rule of law.

The Governor of the state of Illinois needs a budget he can sign.

Until that happens, it’s not even close “who” is to blame, even Owls know, Governors have always, always, always… owned the budget. Comes with the gig.

Comment by Oswego Willy Tuesday, Aug 25, 15 @ 10:20 am
Rich, There is something wrong with the Jim Nowlan connection…

Comment by Pius Tuesday, Aug 25, 15 @ 10:20 am
This strategery is going great!

Comment by Wordslinger Tuesday, Aug 25, 15 @ 10:27 am
Being “on a pace to run a deficit of $5 billion” is not a defense for failing to comply with this court order. Having no available cash on hand would be.

We’ll see what the judge thinks. And how he deals with competing claims.

Comment by walker Tuesday, Aug 25, 15 @ 10:32 am
Bruce: “The courts made me do it.”
Bruce: “madigan made me do it.”

Pick one.

Comment by Austin Blvd Tuesday, Aug 25, 15 @ 10:36 am
“Because of the combination of the continuing appropriations we have to pay, along with the court orders, along with the loss of the income tax revenue, we’re facing significant cash shortages right now.”

Sounds like the governor’s wingman has a revenue problem.

– MrJM

Comment by @MisterJayEm Tuesday, Aug 25, 15 @ 10:36 am
Someone in the administration needs to explain to the disabled and their providers that the reason behind the budget impasse makes all of the suffering worthwhile. Just explain that many middle income people in this state make too much money. Once we are able to kill collective bargaining and prevailing wage and we will provide you with some financial help.

Comment by The Dude Abides Tuesday, Aug 25, 15 @ 10:36 am
Can somebody explain to me how this is happening? Despite the budget impasse, the court order provides the requisite appropriations authority to release the funds. And we shouldn’t be running out of tax revenue until closer to the end of the year, right?

Comment by Commander Norton Tuesday, Aug 25, 15 @ 10:37 am
Need a little clarification here - did the Comptroller indicate a tax hike is necessary? The article seems to suggest that the budget impasse is to blame for the cash flow crisis. I think it’s an important distinction.

Comment by Stones Tuesday, Aug 25, 15 @ 10:41 am
+1 and “like” The Dude Abides @ 10:36 AM.

Comment by Roamin' Numeral Tuesday, Aug 25, 15 @ 10:42 am
If ever there were a contrast between the previous governor and this Governor, this is it. Pat Quinn had a plan to run the government.
Bruce Rauner had a plan, which he would not divulge. Now we learn that it was a plan to bring down the government.
As OW says, governors own the budget.

Comment by Austin Blvd Tuesday, Aug 25, 15 @ 10:45 am
Where is that pension piggy bank when you need it. snark

Comment by Facts are Stubborn Things Tuesday, Aug 25, 15 @ 10:49 am
Pius, there’s something wrong with Jim Nowlan’s premise. It’s not just that the courts have taken over the role of the legislature, they’ve also taken over the role of the executive. Rauner is the chief proponent of the soft shutdown. He signed the education bill to keep mom and dad happy that their kids are going to school. He went out of his way to get the courts to pay state employees. This makes his staff and most staffers happy. His intransigence led to other court rulings regarding spending for various harmed classes. His response has been to propose high profile cuts that he feels harms Dem interests.

Now we have a governor who chose not to use his powers to balance the budget passed by the Dems presiding over an unbalanced (shall I use the frat boys favorite attack word, “and unconstitutional”) spending spree.

Way to go gov.

Comment by Norseman Tuesday, Aug 25, 15 @ 10:49 am
We aren’t running out of cash. The Comptroller is budgeting it based on the parts of the budget that were passed along with court ordered payments. And yes, by the end of the fiscal year we will be 5 billion in the hole. Apparently Rauner shouldn’t have funded the schools if he isn’t willing to compromise on a tax increase. Unfortunately, he waited so long, he is going to have to borrow that 5 billion or enact an even larger tax increase on Jan 1.

Comment by A Jack Tuesday, Aug 25, 15 @ 10:50 am
RNUG

I thought Rauner requested the legislature not to extend the income tax increase since he had a plan to deal with the situation The legislatures agreed to his request. Where is Rauners plan?

Comment by MOON Tuesday, Aug 25, 15 @ 10:50 am
@ Commander Norton:

” Can somebody explain to me how this is happening? Despite the budget impasse, the court order provides the requisite appropriations authority to release the funds. And we shouldn’t be running out of tax revenue until closer to the end of the year, right?”

Revenue (tax or otherwise) doesn’t come in like paychecks, it comes in in fits and starts. It’s more like when you are running short on cash a few days before payday, except they don’t know when payday is gonna be. Appropriations (and court orders) are the authority or permission to spend, but if there is no money in the bank, you still can’t spend. That is the difference here.

Comment by Shark Sandwich Tuesday, Aug 25, 15 @ 10:51 am
That balance would be more than enough to pay for current services for the population under that decree…

Comment by Hoping for Rational Thought Tuesday, Aug 25, 15 @ 10:52 am
Touché Norseman.

Comment by Austin Blvd Tuesday, Aug 25, 15 @ 10:53 am
kirk Dillard or pat Quinn, no I don’t think so — give us Rauner so he can shake up Illinois. Why would you put back Democratic super majorities in both houses of the legislature and then put a Republican executive in that wants to end unions and shake up Illinois? I could see a Republican such as Kirk Dillard, but Rauner — gosh we get the government we deserve.

Comment by Facts are Stubborn Things Tuesday, Aug 25, 15 @ 10:53 am
Mr.JM makes a good point.

Since Munger chose to describe herself as the governor’s wingman on the budget, is there some coordination between the two offices as to who gets paid what and when?

Comment by Wordslinger Tuesday, Aug 25, 15 @ 10:57 am
I don’t know why people wants more tax unless they don’t pay

Comment by Anonymous Tuesday, Aug 25, 15 @ 11:01 am
The very last thing Comptroller Munger wants in re-election is to boil it all down to two things;

A statewide referendum on Bruce Rauner, married to…

A dry run blueprint for Unions and Democrats to defeat Rauner two years from now

This statement tries to distance the “wingman” rhetoric she chose at state fair, and the presser weeks ago indicating she supports the Turnaround Agenda.

Plus… Math is math, is math is math…

Comment by Oswego Willy Tuesday, Aug 25, 15 @ 11:02 am
Another reason why we need a budget: Medicaid health plans have begun to warn contracted providers that as of 9/1 no more payment until the state pays them. tick, tock, tick, tock….

Comment by Dozer Tuesday, Aug 25, 15 @ 11:04 am
- MOON - Tuesday, Aug 25, 15 @ 10:50 am:

didn’t think I needed to add the /s tag …

Comment by RNUG Tuesday, Aug 25, 15 @ 11:07 am
There is no ’superstar’ in the background with Excel on laptop doing ‘what if’ financial/cash flow scenarios with known state budget issues? What business does not have someone with responsibility to know cash flow, coming expenses, and projecting outcomes? Of course that person needs to also be listened to. Seems to be alot of people who have figured this out with a pencil and some scrap paper. That pesky math is what it is.

Comment by Anonymous Tuesday, Aug 25, 15 @ 11:09 am
Willy federal courts do care about the practicality relating to the implmentation of orders. Assuming the Comptroller’s data is correct and her choices of who is getting what funds are avaiable are rational the Courts would take that into consideration. But I suspect the plaintiffs would want a detailed examination by an appointed Court Monitor of the choices being made by the Comptroller before they would move to contempt.

Comment by Rod Tuesday, Aug 25, 15 @ 11:09 am
Commander … It’s a matter of Expenditures and Revenues for the Comptroller’s Office. The courts can “authorize” all the expenditures for state payments it desires, but the Comptroller needs to have the daily revenue receipts in which to pay bills. The top three priorities for deciding who and what gets paid are: #1 The Comptroller must build a balance for the state’s monthly debt service payments and certain statutory transfers, #2, then comes a build up for some 10 payroll schedules through the month for state salaries for all branches of gov’t excluding universities, #3, then comes Medicaid and federally required entitlements. After building up cash for these payments under the Comptroller’s cash management control, its up to the Comptroller to then priorize who gets paid thereafter, which is not an easy assignment. With $5 billion in pending bills, there is no extra tax revenue to last until the end of the year. It was essentially spoken for on April 16. Last point, the Legislature needs to regain its’ power of making appropriations instead of continuing to permit the courts to dictate this constitutional responsibility. This budget immpase sets a very dangerous precedence on future General Assemblies. Who needs a legislature when the courts can decide who should receive state funds?

Comment by Just Saying .... Tuesday, Aug 25, 15 @ 11:11 am
I must be missing something. Why do not others file lawsuits to get government agencies/departments funded?

This issue much bigger than one part of the state government.

Comment by Fedralist Tuesday, Aug 25, 15 @ 11:13 am
= I don’t know why people wants more tax unless they don’t pay =

It’s not a matter of someone “wanting” a tax increase, it’s that person deciding that a tax increase is a lesser evil than the severe spending cuts that would be necessary to balance the budget otherwise. Not everyone will agree with that conclusion, of course.

Most “regular” people (i.e. those outside the state government / CapFax bubble) still believe the fiction that you can have blue state services on a red state tax structure. For decades, the state (Governors and General Assemblies of both parties) supported that fiction by shafting the pension systems. They can’t do that any more, leaving the current GA and Gov. Rauner the bad choices of tax hikes and/or service cuts. Doing neither means bills don’t get paid for lack of cash and the state constantly gets dragged into court.

Comment by cover Tuesday, Aug 25, 15 @ 11:17 am
- Rod -,

I hear ya. But as you seem to indicate…

===But I suspect the plaintiffs would want a detailed examination by an appointed Court Monitor of the choices being made by the Comptroller before they would move to contempt.===

The bottom line, for me, is pretty simple;

Any governor deciding that court decree is acceptable (and Rauner being passive in finding s budget indicates it’s acceptable for now), the consequences and structure of monies by the state being doled out are not under that governor or even that comptroller’s pervue.

If there is a shortfall, or any other budgetary stress relating to those court orders, the courts main concern seems to be that payments are to be made, and the Executive better find a way for the comptroller to do it.

Comment by Oswego Willy Tuesday, Aug 25, 15 @ 11:20 am
@Facts, I get your point. The electorate put this guy in. Another big what if is this.. The Unions waited until late in the primary campaign to throw their support to Dillard, who ended up only finishing 3% behind Rauner. What would have happened if they had thrown their support to Dillard even 3 weeks sooner than they did? Would we be better or worse off? It seems impossible that we could be any worse off.

Comment by The Dude Abides Tuesday, Aug 25, 15 @ 11:33 am
==I don’t know why people wants more tax unless they don’t pay==
I wants [sic] more tax because I want to live in a state which takes care of its most vulnerable citizens and educates its children to a high standard. And yes, I would pay more. If you cannot conceive that anyone would act otherwise than in their narrow self-interest then I feel sorry for you.

Comment by UIC Guy Tuesday, Aug 25, 15 @ 11:41 am
It is hard to have an intelligent discussion of wanting to pay more taxes until you know how much the individual is actually already paying in state/federal/whatever level of government.

And then how much they are proposing would actually cost them them as an individual - in real dollars and not generalities.

Comment by Fedralist Tuesday, Aug 25, 15 @ 11:50 am
Our Illinois politicians of both parties have shown little interest in the issue of income inequality in the US. They are largely indifferent to middle class income stagnation, despite a blizzard of media articles on the subject over the past couple of years. Indeed, if Joe Biden runs, it’ll probably be principally on this issue. All of that sails right by our state politicians. First, they want theirs-hands out. Secondly, let’s keep the Illinois’wealthiest citizens as comfortable and untaxed as possible. If the middle class has problems keeping up with all the projected tax increases, well tough. You picked Illinois. Live with it. That’s the way we do things here.

Comment by Cassandra Tuesday, Aug 25, 15 @ 1:10 pm
This is getting interesting. Illinois is on pace to be $5 billion underfunded (right in the ballpark of the vetoed GA budget) and all budgetary items are not currently funded so it could go much higher.
IF Rauner ever backs off of his unwinnable anti-union agenda and the two sides are able to come together to craft a budget, new revenue will have to be secured because there is now not much left to cut, the money has already been spent. By holding the budget hostage Rauner painted himself into a corner while Cullerton and Madigan happily supplied Rauner with his ‘crisis’ paint to do it.
Rauner will own the FY16 budget and it looks very likely that he’s being boxed in to own the impending income tax hike as well.

Comment by Bulldog58 Tuesday, Aug 25, 15 @ 1:13 pm
Federal Judges know nothing about budgeting.They can’t order a payment if there is no money in the checking account!

Comment by Formerpol Tuesday, Aug 25, 15 @ 1:20 pm
==Federal Judges know nothing about budgeting.They can’t order a payment if there is no money in the checking account!==

Apparently you know nothing about the law.

Comment by Demoralized Tuesday, Aug 25, 15 @ 1:27 pm
-priorities for deciding who and what gets paid are-

#1- obey the court order.
#2- everything else.

Comment by Bigtwich Tuesday, Aug 25, 15 @ 2:08 pm
@UIC Guy

=I wants [sic] more tax because I want to live in a state which takes care of its most vulnerable citizens and educates its children to a high standard=

I guess you haven’t looked at the most recent ACT scores and NAEP results. If you call that 25th ranking in most subjects a “high standard”, then you could probably only get admitted to….UIC!

Exactly where did US News and World Reports rank UIC on “selectivity”?

As far as “taking care of its most vulnerable citizens”, I assume you’re referring to things like paying top dollar, about 30% above average, to construction workers making $35/hr under prevailing wage and suburban high school gym teachers making over $120K for 174 work days, subsidized by Illinois taxpayers, of course? How about the $300K PLUS you were paying at UIC for a “diversity coordinator”? Really vulnerable folks, there, UIC.

The fact is that Illinois has enough money to fund Illinois education at national average levels (the NEA ranks Illinois amongst the highest K-12 spending in the nation at 17.8% above national average per student, despite less than mediocre student outcomes)and take care of protecting the citizens and their health in a well run and fair system…THERE’S the RUB!IT just takes voters electing candidates who will make the peoples’ need to properly fund what needs funding without making the middle class sacrifice through tax increases to support the highly enriched governmental/political class in Illinois. Unless there’s massive brain transplants, THAT ain’t gonna happen!

Comment by Arizona Bob Tuesday, Aug 25, 15 @ 2:54 pm
UIC GUY

I pay enough taxes for state , they waste my hard earned money, they should prioise the state duty. if anyone want to feel good with other peoples money thats narrow self intrest, it you want to pay more tax, you can give voluntarily, no one stop it. Don’t expect others to pay for it

Comment by Anonymous Tuesday, Aug 25, 15 @ 2:58 pm
- Bigtwich -

The problem is there seem to be more court orders than cash …

Comment by RNUG Tuesday, Aug 25, 15 @ 2:59 pm
The governor failed to submit a balanced budget. The General Assembly failed to raise sufficient revenue to fund their budget, and failed to appropriate sufficient funds to fund projected expenditures. Clearly it is all the governor’s fault.
SECTION 1. STATE REVENUE POWER
The General Assembly has the exclusive power to raise
revenue by law except as limited or otherwise provided in
this Constitution. The power of taxation shall not be
surrendered, suspended, or contracted away.
(Source: Illinois Constitution.)
SECTION 2 STATE FINANCES
(b) The General Assembly by law shall make
appropriations for all expenditures of public funds by the
State. Appropriations for a fiscal year shall not exceed
funds estimated by the General Assembly to be available
during that year.
(Source: Illinois Constitution.)

Comment by Striketoo Tuesday, Aug 25, 15 @ 3:24 pm
- Striketoo -

Governors sign all those actions.

Please keep up.

Also Article VIII, Section 2 (a), comes before (b), so there’s that…

Comment by Oswego Willy Tuesday, Aug 25, 15 @ 3:34 pm
Sounds like Rauner needs to borrow some money.

Comment by Juvenal Tuesday, Aug 25, 15 @ 4:06 pm
If this continues into January, it will be de ja vu. Same as last year, with agreed cuts necessary that force a ==balanced balanced== to avoid mid-year shutdowns. smh

Comment by Formerly Known As... Tuesday, Aug 25, 15 @ 4:49 pm
When are we goin to start sellin medical weed and taxin those who buy it? Then there would be a lot of g’s dropped in to the state’s piggy bank.

Comment by Flynn's mom Tuesday, Aug 25, 15 @ 5:56 pm
I think that if this goes beyond tomorrow’s hearing, Felicia, James and Leslie should bring toothbrushes with them to court.

Comment by Flynn's mom Tuesday, Aug 25, 15 @ 6:06 pm
When it is something the governor wants done the criteria is simple: Comptroller Munger says she needs either an appropriation or a court order to issue funds.

Now that she has declared herself to be the governor’s “wing man” even a court order isn’t sufficient, if not paying it will give the gov some kind of leverage.

Comment by Seroiusly7 Tuesday, Aug 25, 15 @ 9:12 pm
Maybe I am just clueless… but it appears to me there is $162 million available to pay something. Doesn’t matter what we are on pace for in terms of deficits. I understand not being able to pay 16 bills without appropriation, but that is not what we are discussing, right?

Comment by thoughts matter Tuesday, Aug 25, 15 @ 10:11 pm
Oh and Bobby azi I would like to cite an article by Nick Wallace describing a study done by SmartAsset which looked at each state comparing the percentages of students taking the SAT, ACT, and AP tests, along with the average scores for the tests. State funding per student, the teacher/student ratio, high school drop out rate and the percentage of graduates going on to college. What do you know… When the issue is investigated thoroughly Bobby- Illinois ranks 13 instead of 25. Now I know you didn’t graduate from UIC but you do understand that a B- is above average. It’s a lot better than Arizona’s rank of 49th and its F grade. You are aware that the F grade stands for failure, right??? You sir are a triple fat hoot! Thank you for playing.

Comment by Triple fat Wednesday, Aug 26, 15 @ 1:45 am
Triplefat (I assume most of that is above the neck-LOL)I’ll take the raw data from the NEA over that hack Wallace any day. I understand what he does is akin to the way the NOAA “tricks” data to validate their reach considering AGW. Got a link to your source for “Smart Asset”? I’ll take NAEP data over what Wallace fabricates any day of the week.

Comment by Arizona Bob Wednesday, Aug 26, 15 @ 9:21 am
Triplefat, I looked at your SmartAssets website, and their methodology is a joke. Actual student performance on ACTs and SATs is only given “quarter weight” while high spending is taken as “full weight” and students per teacher is taken as “double weight” a full EIGHT TIMES THE WEIGHTING OF STUDENT OUTCOMES! So if you overspend without commensurate student achievement, that gives you a high ranking. A system tailor made for overrating Illinois K-12 education! It also is mainly geared to prep for college, and largely ignores the literacy of those not choosing the college option.

You can stick to using analysis from companies whose main purpose is selling insurance and mortgages. I think I’ll stick with professional analysis from reputable organizations who objectively evaluate student outcomes.

Good luck with your academic career at UIC. Let me guess, poli sci or education major, right?LOL

Comment by Arizona Bob Wednesday, Aug 26, 15 @ 9:40 am
Rich I hope my last post is pending review cause personally I think I nailed it.

Comment by Triple fat Wednesday, Aug 26, 15 @ 11:49 am
Dang Rich…

Comment by Triple fat Wednesday, Aug 26, 15 @ 11:52 am