CHICAGO (AP) – Illinois Comptroller Judy Baar Topinka estimated Friday that there will be a $1 billion impact on the state budget if Congress and President Barack Obama don’t strike a deal before to stop the scheduled federal spending cuts and tax increases.
“Illinois is already spiraling in a mix of unpaid bills, unfunded liabilities, interest costs and credit downgrades,” Topinka said in a release. “By going over the fiscal cliff, the federal government will essentially be wrapping an anchor around our ankle and the consequences will be devastating.”
Topinka estimated Social Security and income tax increases would lower Illinois tax revenues by up to $500 million. She warned that the fallout from the fiscal cliff threatens to push the state into a recession.
Topinka also said a planned 2 percent increase in Social Security payroll taxes could cost Illinoisans up to $6 billion in take-home pay.
Illinois has a $9 billion backlog of bills owed to vendors and a worst-in-the-nation pension program deficit, which Gov. Pat Quinn has vowed to make his top priority when lawmakers reconvene in Springfield next week. The problem is approaching $100 billion and mounting by $17 million per day.
Obama had scheduled a meeting late Friday with leaders of both parties at the White House to make a fresh attempt to find a solution before Monday night’s deadline.
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