Comptroller's Quarterly

              Through the first three quarters of fiscal year
2010, the state’s cash flow position contin-ued
to deteriorate with the backlog of
General Revenue Fund bills reaching his-toric
levels. At the end ofMarch, the volume
of unpaid bills from the General Funds in the
Comptroller’s Office stood at $4.496 billion
while at this time last year payables totaled
$3.401 billion. Just as significantly, the state
has had to prioritize critical payments such
as debt service and other obligations vital to
the operating of state programs such as
General State Aid to Education. The state
has also had to accelerate large Medicaid
disbursements in order to continue qualify-ing
for increased federal stimulus funding
revenues. As a result, the backlog includes
unpaid transfers and vouchers from the first
quarter of the fiscal year and those delays
have become increasingly problematic.
InMarch the state made the first payment of
$506 million towards $2.25 billion in short-term
borrowing loans that were issued to
address fiscal year 2009 bills. The remain-ing
$1.75 billion plus interest must be repaid
by June 10th of this year, further exacerbat-ing
cash flow issues for the remainder of the
fiscal year.
In January the state issued $3.5 billion in
pension bonds which were used to pay the
majority of the state’s obligations to the
retirement system in fiscal year 2010. Some
of those revenues were available to repay
the General Funds for retirement payments
already made during the fiscal year but the
results of the sale and the reduction in pen-sion
contributions prior to that sale impact-ed
both expenditure and revenue patterns for
the year.
The chart of adjusted General Revenue Fund
(GRF) balances shows the balance onMarch
31, 2010 to be a negative $4.489 billion.
Throughout the first nine months the adjust-ed
balances have been consistently and sig-nificantly
lower than previous years. Major
factors in the decline of the cash flow posi-tion
include continued weakness in the
state’s economy-driven revenues, a structur-al
imbalance in the enacted fiscal year 2010
budget, and the state’s inability to address
the deficit in the fiscal year 2009 budget
resulting in over $3.9 billion in fiscal year
2010 revenues expended for last year’s bills.
While base revenues increased 7.9%through
three quarters of fiscal year 2010, it is the
further declines in economy-driven revenue
sources that continue to threaten the state’s
financial stability. Even though there is evi-dence
of improving economic conditions,
state corporate income tax receipts were
down 11.4%, sales tax receipts decreased
$506million or 9.8%, and individual income
tax receipts fell $536 million or 8.1%.
Federal revenues tied to the American
Recovery and Reinvestment Act of 2009
was essentially the only strong revenue
source and transfers from the pension bonds
led to the growth in revenues.
           
CASH POSITION DETERIORATES AS STATE
BEGINS TO REPAY SHORT-TERM BORROWING
CQ THE IILLLLIINNOOIISS STATE
Edition DANIEL W. HYNES, COMPTROLLER 35, April 2010
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