Where's Our Money?

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SPRINGFIELD -- It's among the most common questions asked of Illinois State Treasurer Michael Frerichs.

Each time, he tries to simplify a complicated query: Where's our money?

"The real question people are asking is: Where is the money going in our general revenue fund?" said Frerichs, who took office in January of 2015.

Most of Frerichs' time as treasurer has been spent overseeing the finances of a state without a budget. He understands the frustration and confusion.

"We're still paying our taxes. We're still paying our fees and fines. But universities aren't being paid," he said, giving an example of one area that's suffered during the 19-month budget standoff.

Indeed, a state collecting revenue without interruption is failing to pay a number of agencies counting on the support -- from colleges to social services. To many taxpayers, the math just doesn't make sense.

A spending plan, however, is just that -- a plan dictating what money, and how much, goes where. The lack of a spending plan, however, is only part of the answer.

"Less money is coming in than there are bills every month," said Frerichs.  That's at the heart of what's turned a budget "impasse" into a budget "crisis". 

According to Frerichs, it's like getting sent to the grocery store with a $10 bill, but needing $11 worth of groceries. You'd be forced to put some items back on the shelf.

That's exactly what's happening to social services like rape crisis centers. It's also happening at state colleges and universities, where the money has run out at a point that amounts to a 50% cut in state support.

Anyone paying attention knows the lack of a spending plan does not mean a lack of spending. State workers will continue to get paid, road works continues, prisons remains open, and state pensions are getting money.

"The governor just passed funding through K-12 education," said Frerichs, noting Governor Bruce Rauner's announcement of an increase to childhood education.

None of this is news around the capitol. Most of the payments going out are the result of individual directives. Even without a budget, one lawmaker told WAND News, no one's going to allow an elementary school to close.

Court orders, most agree, are responsible for about 92% of the current spending.  They state has to pay it, and can't collect any more.

The problem compounds as the budget standoff continues.

"We're seeing bills growing right now," said Frerichs. "We expect by the end of the fiscal year, there will be 15 billion dollars in unpaid bills."

That projection comes from a recent report from the state comptroller's office. That backlog, at one point, sat at about $4 billion thanks in part to a 2011 tax increase. Governor Rauner promised to get rid of that tax increase, one that was supposed to be temporary anyhow, and did in 2015.

That 1.25% cut, Frerichs said, amounted to about $5 billion lost in annual revenue.

"But they didn't make a commensurate $5 billion cut in spending," he added. "No cuts to pension payments, no cuts to debt payments."

The governor said he proposed $6 billion in cuts at the time, reminding the general assembly of that in his budget address just this week.

His reminder drew laughs and heckles from the state's democratic lawmakers, illustrating a rift between parties that hasn't seen any mending.

Frerichs said the solution lies solely within a balanced budget, and to get there, the legislature is going to have to agree on tax increases, spending cuts, or both.  None of the three are very popular, politically.

The simple and less-than-satisfying answer to our original question of "Where's our money?": The state is spending it all.

And they're going to need more.

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