November 16, 2016 / 8:36 PM / 3 years ago

Illinois sees $13 billion bill backlog, $5 billion budget deficit in 2017

CHICAGO (Reuters) - Illinois’ pile of unpaid bills could surpass $13 billion and its budget deficit could grow beyond $5 billion in fiscal 2017 without changes Republican Governor Bruce Rauner has said will spur economic growth, his administration warned on Wednesday.

The new forecasts, which one top Democrat described as “daunting,” surfaced during a meeting between Rauner and legislative leaders over a new, half-year budget plan to replace state spending authority that lapses at year’s end.

The governor and Democrats who control the state legislature have been locked in a stalemate that has left Illinois without a 12-month operating budget since July 2015, making it the first state in at least 80 years to achieve such fiscal infamy.

The political stalemate has threatened human-service programs and universities, driven up a record-setting unpaid bill backlog that stood at $10.6 billion as of Wednesday and caused the state to notify potential bond investors in October that it might not have money to make timely pension payments by next year.

Rauner’s administration added on to that gloom with a newly released five-year financial rack-up that showed Illinois routinely could accrue budget deficits ranging between $7.09 billion in fiscal 2018 and $6.5 billion in fiscal 2022.

“Illinois can no longer afford to continue with the status quo economic and fiscal policies,” said Rauner’s budget director, Tim Nuding.

Rauner’s budget office also estimated Illinois’ unpaid bill backlog could grow from $13.5 billion at the end of fiscal 2017 to $47.1 billion by 2022.

Democratic House Speaker Michael Madigan told reporters the numbers amounted to “compelling reasons to get about the business of balancing the budget” but signaled no progress toward that end.

Madigan and fellow Democrats oppose tying a budget deal to Rauner’s bid for a property tax freeze, business-friendly changes to how injured workers are compensated by employers, pension reform and term limits.

Rauner raised those issues during Wednesday’s closed-door confab, according to a meeting agenda.

Senate Republican Leader Christine Radogno said Rauner’s non-budgetary items “are absolutely inter-related” to Illinois’ longer-term economic prospects and chastised Democrats for not accepting that.

“We need to focus on a short-term balanced budget but also on those reforms that are going to put us on that path toward sustained growth. The only way we get out of this is to grow our tax base by keeping jobs here, and we’re having troubling, I think, connecting those dots,” she said.

Reporting by Dave McKinney; Editing by Chizu Nomiyama

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