DOES ILLINOIS HAVE A DEBT CEILING?
With the recent debate in Washington over raising the federal debt ceiling, some residents might be wondering if Illinois has a debt ceiling.
State government finances are structured differently than the federal government; however, both the state and federal government spend more tax dollars than they collect.
Congress had to raise the debt ceiling for the federal government to continue to borrow to pay its obligations. The federal government has no requirement for a balanced budget. As a result, Congress and the President can spend more than the government takes in and then borrow money by selling government bonds to investors. However, there is a legal limit to how much the federal government can borrow. When they reach that limit, they have to either quit borrowing or raise the debt ceiling.
Technically, Illinois does have a balanced budget requirement in its constitution. In fact, while on paper Illinois’ budget is made to look balanced, it is out of balance in actual practice.
For example, this year Illinois passed a state budget that sets state spending at $33.2 billion. But, that budget assumes that the payment on $1.1 billion in Medicaid bills that the state will accumulate this year will just be pushed off until next year. So, Illinois’ “balanced” budget is technically more than a billion dollars out of balance, not including the backlog of bills that the state already owes from past years.
The Illinois State Toll Highway Authority is encouraging residents to provide input on its $12 billion tollway improvement and expansion plan.
Information about the plan and a schedule of public hearings are available at www.illinoistollway.com.
TAXPAYERS’ FEDERATION PROVIDES TAX FACTS
The Illinois Taxpayers’ Federation has a publication with some interesting facts about Illinois taxes and who pays them.
Check it out at: http://www.taxpayfedil.org/secure/reveal/admin/uploads/documents/May%20June%202011%20Tax%20Facts.PDF.