State Budget Impasse Puts Federal Money At Risk

Without a budget agreement in Springfield, a possible government shutdown gets closer. And for already cash-strapped schools, it's not just state money that's at stake, but federal money, too.

Schools have three major sources of funding: Local property taxes, state money and federal dollars. Depending on how wealthy or poor an area is, those three sources vary in weight.

But schools in high-poverty areas tend to need extra educational mediation...that's where federal money comes in.
Schools with a Title I designation get extra dollars to hire teachers that give individual attention to students who struggle with math and reading.

If there's no state spending authority, that money can't be filtered down to schools. Matt Vanover, with the Illinois State Board of Education, says that will make for tough decisions.

"They're going to have to say, "OK are we going to dip into reserves?" he said. "Are we going to have to possibly delay opening school? Are we going to have to look at borrowing?'"

Illinois Comptroller Leslie Munger says schools shouldn't panic about delayed payments just yet.

"We will expedite those payments," she said. "Honestly, if it's August 10th we got an agreement, they would have it within days. They could still open schools.”

But schools with very tight budgets may already have to start whittling down their operations, no matter what happens in August.

Rauner Administration Prepares For Shutdown

Budget negotiations are all but at a standstill in Springfield as the start of the new fiscal year gets closer. 

If Governor Bruce Rauner and Democratic leaders don't reach a budget agreement before July first, Illinois will have to cease paying many of its bills.

For years, the General Assembly has passed budgets that spend more than the state has, which drove up Illinois' backlog of bills.

But with a Republican governor in place, all the political calculations have changed...and Rauner says he won't accept the Democrats' so-called "phony" budget.

Comptroller Leslie Munger, a Republican Rauner appointee, says she won't accept it either, especially because she's the one signing the state's checks.

"You know, it doesn't help organizations to get an appropriation if there's no cash to write the check," Munger told reporters Friday in Champaign. "It just gives them false hope that they are going to have money there. And it comes down to then they wait months for a payment."

Munger used this week to travel the state, warning of possible budget doomsday scenarios.

Friday afternoon the governor's office issued a list of even more possible cuts to state services if no budget compromise is reached.

Among the cuts are reduced Medicaid payments, suspended construction projects at schools and colleges, and elimination of anti-violence and youth programs.