BELVIDERE — City and county services are among the potential casualties of Illinois' delinquent payment of hundreds of millions of dollars in aid to municipalities. The state owes Illinois municipalities a share of income tax revenue totaling $293 million, which is doled out on a per-capita basis.
Editor's Note: This is the latest installment in the Deadbeat Illinois series, where reporters from GateHouse Illinois newsrooms examine the real-world effects of the state's failure to pay its bills. Each Monday, we'll share the stories of those affected. See more on the Deadbeat Illinois Facebook page.
BELVIDERE — City and county services are among the potential casualties of Illinois' delinquent payment of hundreds of millions of dollars in aid to municipalities.
The state owes Illinois municipalities a share of income tax revenue totaling $293 million, which is doled out on a per-capita basis. That's just a slice of the $6.5 billion in unpaid bills owed to vendors, service providers and local governments.
The payment delays force local officials to play a nerve-wracking waiting game during lean periods in the fiscal cycle, as they hope to avoid unplanned, big-ticket expenses. If such expenditures arise, local governments must defer less-urgent spending on goods or services or, worse yet, seek a loan.
"Rather than taking steps to permanently solve their structural budget problems, (state officials) push money around to patch holes," said Joe McCoy, the legislative director for the Illinois Municipal League, which lobbies for local governments.
Come May, Boone County leaders will scrape the bottom of their general fund unless Illinois pays the county its share of delinquent income tax revenue. County Administrator Ken Terrinoni said the state owes the county $436,000, or three months' worth of proceeds.
Boone County relies on the state revenue in May. The county is flush again in June, when local property taxes arrive.
During that period, the state's delinquency drives the county's general fund balance — which starts at $3 million at the beginning of the fiscal year — below $100,000, a dangerously low level.
"We know the choke point is May," Terrinoni said.
The state has agreed to provide income tax revenue to municipalities each month, although it cannot make up for three months' worth of payments skipped in past years. Brad Hahn, spokesman for the Illinois comptroller's office, acknowledged that the delinquency is unacceptable, but noted that the monthly checks provide some predictability for local governments.
"While they are still behind, they are still seeing revenue every month, which is a little bit better than what many vendors see right now," Hahn said.
There is hope.
The Illinois Municipal League is behind House Bill 961, which would prevent the state from delaying payments owed to cities and counties.
The legislation would bar the state from holding local money in the state general revenue fund. Instead, it would require the money to be deposited into the local government distribution fund, and thus, expedite payments to municipalities.
The bill is awaiting a second reading on the House floor; municipal leaders are eager for legislators to approve it.
"As long as the state is experiencing a budget crisis, local government revenues are going to be threatened," McCoy said.
Jennifer Wheeler can be reached at 815-987-1354 or email@example.com.