Illinois spent a record $765 million of general funds in the first three months of fiscal 1992, which began July 1, paying bills left over from fiscal 1991, state Comptroller Dawn Clark Netsch reported last week.
Paying bills from the last fiscal year with revenues raised in the first three months of the new fiscal year is called lapse-period spending. The previous record for lapse-period spending was $586 million, representing bills carried over from fiscal 1990 and paid for with revenues during fiscal 1991.
The combination of $765 million of lapse-period spending and sluggish real revenue growth in the first quarter of fiscal 1992 has continued the state's cash-flow problems, according to Jim Ofcarcik, special assistant to the comptroller. The state ended the first quarter on Sep. 30 with a backlog of $230 million of unpaid bills, but a general funds balance of only $153 million.
Although general funds revenues for the first quarter of fiscal 1992 were $3.501 billion, an increase of $378 million from the same period in fiscal 1991, Mr. Ofcarcik explained that $360 of that increase was composed of onetime transfers from other funds, short-term borrowing, increased federal aid and the diversion of a share of the state income tax surcharge that previously had been dedicated solely to local governments.
As a result, real revenue growth from state sources was only $18 million, or less than 1%, for the first quarter of fiscal 1992, he said.
The comptroller's office also reported that the general fund budgetary balance on June 30, the end of fiscal 1991, was a negative $665 million.
The state ended the year with a $100 million cash balance, but the $765 million of lapse-period spending carried into fiscal 1992 created the deficit, Mr. Ofcarcik said.
Both Moody's Investors Service and Standard & Poor's Corp. cited the state's increased lapse-period spending and small yearend general funds balances when downgrading the state's GO debt in the last two months. Illinois is rated Aa1 by Moody's and AA by Standard & Poor's.
The Illinois Department of Commerce and Community Affairs plans later this year to begin documenting all existing unfunded state mandates on local governments -- a task the department was supposed to have begun in 1981.
"We haven't done a very good job on that," admitted Stewart Schrodt, department assistant deputy director, during a forum yesterday at the Illinois Municipal League's annual conference in Chicago.
The State Mandates Act, implemented in 1981, required the department to create and maintain a catalog of all unfunded state mandates on local governments. But Mr. Schrodt said lawmakers never provided enough money for the necessary personnel.
However, unfunded state mandates are a major concern of Gov. Jim Edgar, Mr. Schrodt explained, so staff members will be made available to begin the project after the department is reorganized next month.
Municipal league officials said yesterday that such a catalog would be used in lobbying legislators for relief.
According to a 1988 U.S. General Accounting Office report, the Illinois General Assembly passed 57 mandates costing local governments $148 million a year between 1981 and 1988.