In this edition (July 2014): Illinois reduced the backlog at the
Comptroller’s Office (IOC) by $876 million during fiscal year 2014. This improvement is expected to be reversed with the budget passed for fiscal year 2015 as revenues are expected to drop off when the income tax rate begins to step down on January 1, 2015.
Lower Income Tax Collections Affect Bottom Line
In this edition: As the state heads into the final quarter of fiscal year 2014, its fiscal outlook remains unclear.
Unpaid bills likely to surpass last year
In this edition: While state spending is in line with budget projections, Illinois is expected to bring in less revenue than last spring and may ultimately end the fiscal year with a higher bill backlog than one year ago.
Earliest close of expenses since 2009
Stronger first quarter revenues, coupled with fewer lapse period transactions, have allowed Illinois to pay all of its General Funds bills from the previous fiscal year earlier than at any time since 2009.
Payment delays expected to grow in coming months
Illinois concluded fiscal year 2013 with an overall bill backlog that was $1.4 billion smaller than the same time last year, but the financial improvement is expected to be short-lived. The state moved into fiscal year 2014 with an estimated total bill backlog of $6.1 billion, compared to $7.5 billion one year ago.
Strong tax season provides short-term relief
While a stronger-than-expected tax season helped the state temporarily reduce the size of the bill backlog, it is expected to have little impact on Illinois’ long-term fiscal health. The Illinois Office of the Comptroller (IOC) estimates the state’s obligations to not decrease any further by the end of the fiscal year on June 30. And with the income tax increase scheduled to sunset in 2015, Illinois is expected to continue to see considerable payment delays for the foreseeable future.
General Assembly addresses appropriation shortfalls
Two years after Illinois raised individual and corporate tax rates, the state continues to suffer through substantial bill backlogs and payment delays. Recent action by the General Assembly, however, ensured sufficient appropriations will be available to fund certain critical state services and programs through the end of the fiscal year.
Underfunded budget creates more unknowns
At the end of the first quarter of fiscal year 2013, the backlog of unpaid bills at the Comptroller's Office (IOC) had grown by more than $2 billion when compared to the same time last year, even as state income and corporate tax revenues grew by nearly $150 million. At the end of October, a similar situation continued to exist.
Little improvement seen as fiscal year ends
As Illinois reached the end of the fiscal year, persistent payment delays continued despite significant revenue increases. In fact, the state moved into fiscal year 2013 – following the first full year of state tax increases – with an estimated $7.5 to $8 billion in unpaid obligations, slightly lower than the $8.5 billion total of the last two fiscal years.
Payment Delays Expected to Persist
SPRINGFIELD - Despite being three quarters into the first full year of the state tax increases, Illinois’ financial position has not improved. In fact, the bill backlog has increased in the most recent quarter, and payment delays are expected to persist for foreseeable future.
Little Improvement Seen One Year After Tax Increases
Springfield– One year after Illinois raised individual and corporate income tax rates, the state remains in a precarious fiscal position with persistent payment delays – and the situation is unlikely to significantly
improve in the near-term.