CHICAGO – 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.