By Illinois Radio Network
SPRINGFIELD – Illinois might be able to borrow its way through the next few months until money from the state’s new income tax rate comes in.
Illinois lawmakers last week voted for a $5 billion tax increase, but that money is months away from hitting the state’s bank account.
Abdon Pallasch, a spokesman for the Illinois comptroller’s office, said the state will have to borrow money to make it through the next two months, at least.
“Given some of the options included in the budget, including interfund borrowing, we should be able to make it through till August,” Pallasch explained. “At that point, some of the higher income tax revenue should be coming in.”
One of the biggest pressure points is a federal judge’s order that Illinois pay $585 million more to doctors and hospitals right away.
“Thank God we have a budget,” Pallasch said. “It’s better than not having a budget. But we are a long way from being out of the woods.”
Michael Lucci of the Illinois Policy Institute says that’s because lawmakers tried to solve the wrong problem with the new budget and tax increase.
“(Lawmakers) raised taxes to cut the deficit,” Lucci said. “The cash flow crisis. But the cash flow crisis is a symptom of the debt crisis.”
Lucci said Illinois’ debt problem, including $250 billion in pension debt, will continue, and that it’s just a matter of time before Illinois is once again facing a cash flow crunch.
