The budget crisis that is crippling the state of Illinois is now being felt in communities statewide. 

In Galesburg, for example, a town of about 31,000 people located 45 miles northwest of Peoria, the school district warns it needs to collect nearly $217,000 in late student fees - unpaid accounts dating at least five years back - to help offset the $16 million in general state aid it is not receiving. The school board has revealed it will consider hiring a collection agency in the coming weeks. 

"Without our $16 million in general state aid, we will not be able to go through the entire school year," Jen Hamm, assistant superintendent for the Galesburg Community Unit School District, told Quad Cities, Iowa-based WQAD News 8. "It's a substantial amount of money that we could get to benefit our students."

Bruce Rauner, the Republican governor of Illinois, and Democrats controlling the state legislature remain at a budget stalemate. The gridlock has left Illinois without a budget since July 1, 2015 and worsened a long-standing backlog of debt. Illinois had more than $7 billion in unpaid bills as of last week.

On Tuesday, Illinois Treasurer Mike Frerichs said the state is losing $2.6 million a month in investment income because of the budget impasse. He said the state changed investment strategies last summer to shorter-term and less lucrative investments instead of long-term ones because the state had no spending plan. If nothing changes Illinois could miss out on more than $31 million dollars in potential earnings this calendar year, he said.

The state also has spent more than $900 million on penalties for not paying its bills on time over the past six years, according to the Chicago-based government watchdog group, Civic Federation. 

Most of the payments are owed to state health insurance vendors and the problems have jumped with the state's backlog of unpaid bills expected to reach $9.3 billion by the end of the current fiscal year. Illinois reportedly owes $3 million to the Federal Bureau Investigation alone for processing fingerprints and conducting background checks for professional licenses and permits. That money is old enough that it reportedly could be turned over to the federal government's collection agency - the Treasury Department - even though there is nearly $19 million in an account used to pay for FBI fingerprint expertise. Without a legislative appropriation, no one has authority to spend that money.

Galesburg’s school district expects to run out of financial reserves by February 2017 without a state budget deal. "We're literally piecing together what we're considering a doomsday scenario for our budget for next year," Hamm said. "How long can we continue with this uncertainty?” Hamm said.

 

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.