House Republicans Look for Pressure Point to Move Budget Forward

With House and Senate Democrats refusing to pass an honest, workable budget, the Illinois budget process has temporarily reached a point of impasse. Future deadlines will place ever-increasing pressure, throughout the summer, upon high-ranking policymakers to enter into serious negotiations.

The State of Illinois is currently finishing up Fiscal Year 2015, which will end on June 30, 2015. The new fiscal year begins on the following day, July 1, 2015. After the end of the month, if any money is left over within any State line item, a two-month “lapse period” within the new fiscal year is created within which remaining FY15 funds can be spent. However, there will be very little lapse-period monies available for use this summer. The State’s first payroll deadline within the new fiscal year will come on July 15, 2015, so there will be intensifying pressure to reach a budget deal prior to this date.

An additional deadline, if required, will come in mid-August. General State Aid (GSA) payments from the State to local school districts are due on August 10 and August 20, 2015. Few, if any, schools within Illinois will open for fall classes without the cash flow represented by these GSA payments.

Some items within the State budget are protected by what is called “continuing appropriation” authority. Areas of spending or money transfer that are mandated by federal law or by existing contracts and bond indentures are areas where money will continue to flow even in the absence of a year-to-year budget. Examples include bonded debt service, certified pension payments, the Teachers’ Retirement Insurance Program, the College Insurance Program, income tax payments and sales tax payments shared with local governments, the TANF welfare program, the AABD aid to the aged program, and stipends paid to parents and guardians of adopted/process-of-adoption/guardianship children by the Department of Children and Family Services.

At the same time, the City of Chicago faces a separate set of urgent budget pressures. Current law requires the City to make a $634 million “balloon” payment to the Chicago teachers’ pension fund no later than June 30, 2015. Furthermore, additional “balloon” payments to the pension funds that support retired Chicago police officers and firefighters will be due later in 2015.