CHICAGO -- The Illinois comptroller's office has projected that, unless this month brings a 26% increase in revenues, the state will carry a record $900 million to $1 billion of fiscal 1992 expenses over into fiscal 1993.
The Illinois Bureau of the Budget needs such a surge to meet its revenue estimates for fiscal 1992, according to Jim Ofcarcik, a special assistant to Comptroller Dawn Clark Netsch. The state's fiscal year ends June 30.
That percentage works out to about $328 million more than the state collected in June 1991.
About $100 million of that amount is expected to be taken care of through a transfer from the Build Illinois sales tax revenue bond account to the fund for the state's June 20 school aid payment, Mr. Ofcarcik said. He added that the transfer will still leave state revenues more than $100 million short.
Under what is called "lapse-period spending," the state can use revenues from the first three months of the upcoming fiscal year to pay for expenses incurred in the current fiscal year.
The Bureau of the Budget estimated lapse-period spending at $842 million going into fiscal 1993. Lapse-period spending for fiscal 1991 was a record $765 million.
"A billion dollar lapse period is not beyond the realm of possibility, and a $900 million lapse period, I think, is likely," Mr. Ofcarcik said.
George Hovanec, the state's deputy budget director, did not dispute that lapse-period spending could climb to $900 million. While he said the bureau's tax revenue estimates are still on track, he added that federal Medicaid matching dollars would determine whether lapse period spending will increase.
He said if the comptroller's office pays off enough Medicaid provider bills during this month, an estimated $110 million to $115 million of federal matching money would be made available for state spending this fiscal year. However, he commmented, the payment of other state bills would have to be delayed in order to pay the Medicaid bills.
Steve Hochman, a vice president and assistant director of state ratings at Moody's Investors Service, said higher lapse-period spending "makes it all the more important, as the legislature goes ahead, to focus on reducing the accumulated deficit and restore financial balance."
Todd Whitestone, a managing director at Standard & Poor's Corp., said the agency was "worried" about lapse-period spending in Illinois and wanted to see the state make some progress on trimming the spending.
He added that besides lapse-period spending, the agency was also looking at the state's yearend cash balance and its negative unreserved balance as measured on a generally accepted accounting principles basis, which stood at $1.5 billion at the end of fiscal 1991.
Mr. Hovanec said the Illinois budget office was still projecting that the state would end fiscal 1992 with a general funds cash balance of $110 million.
Last year, Standard & Poor's downgraded Illinois's general obligation rating to AA from AA-plus, and Moody's dropped its rating to Aa1 from Aaa due to the state's deteriorating financial position over the last few years. Earlier this year, Standard & Poor's had assigned a negative outlook to the rating.