Quinn budget office projects $4 billion hole by 2016
Any forecast three years into the future has more than a little wiggle room in it, and this one is no exception. Still, the bottom line in the report is pretty darned terrifying for a state that still has billions of dollars in overdue bills to pay.
Specifically, the report projects that by fiscal 2016 (ending July 30, 2016), the state will have a $4.1 billion deficit in its operating fund, up from a modest surplus now, and the gross backlog of unpaid bills will soar, to $11.6 billion on June 30, 2016, from $6.3 billion on June 30, 2013. Assuming the Illinois Legislature does not otherwise act, that is.
Those are the kinds of numbers that give bond traders migraines.
Overall operating, or general funds, income will drop to $32.8 billion in fiscal 2016 from $36.4 million in fiscal 2013, by which time the tax reduction will have fully kicked in, the report says. The reduction is strictly on the income tax side, with other revenues, such as sales-tax receipts, projected to rise.
The report does project some increases in spending, with the operating budget up $1.6 billion, to $31.9 billion, and total expenditures (which include debt service and other transfers) up about the same. About half of the increase is for pensions and health care, including Medicaid. The rest is scattered around in what the office termed “maintenance” hikes, averaging 2 percent a year.
Continue reading at Crains Chicago Business…