Topinka: Continued federal gridlock will cost Illinois

 Washington payments to state average more than $70 million a day   

                                                  

Chicago, IL – Illinois Comptroller Judy Baar Topinka on Sunday warned of serious consequences for state finances if Washington lawmakers are unable to reach an agreement on the federal debt ceiling, noting that the state averages more than $70 million in funding per day from Washington for everything from Medicaid to construction projects.

The state’s Chief Fiscal Officer stressed that certain federal payments may continue even if no agreement is reached by Congress, adding that the ultimate impact upon the state will depend upon which payments are prioritized by Washington decision makers.

“This is unchartered territory and there are many unknowns,” Topinka said. “But one thing is clear: Illinois is already billions of dollars in debt and in no condition to pick-up the slack for an abrupt and substantial reduction in federal funding.”

Illinois received more than $17 billion from Washington in fiscal year 2011, not including additional Medicaid funding made available through the federal stimulus bill. Half of those dollars were reimbursements for Medicaid payments, while education, transportation and human services funding combine for approximatly 35 percent of the funds.

Topinka noted that the federal government could choose to continue making some of those payments, while freezing funding for other obligations to the state. For instance, Medicaid could be prioritized by the federal government, allowing Illinois to continue receiving an average of $35 million a day for those payments; while if transportation funding is halted, it would cost the state an average of $8 million a day.

To a certain extent, the state could potentially buy time by fronting dollars or delaying certain payments – but it would not be able to sustain that burden for very long, Topinka added. As of Friday, the state’s bill backlog included more than 185,000 vouchers totaling nearly $3.5 billion to businesses, schools, and social service organizations throughout Illinois.

“Members of Congress need to stop the posturing and get this done,” Topinka said. “They are playing a dangerous game of chicken with the financial health of our families, state and nation. There is still time to avoid a catastrophe – but they need to act now.”###