The bad financial news for the state just keeps coming.
Last week, Illinois Gov. Pat Quinn rattled the cages of powerful political interests by proposing significant changes in both the state's Medicaid and public pension systems.
This week, Comptroller Judy Baar Topinka issued a report on state finances that demonstrates why Quinn contends that dramatic changes in costly state programs that include Medicaid and public pensions are unavoidable.
According to Topinka's office, Illinois' finances are little better now than they were before Gov. Quinn and legislators dramatically increased the state's personal and corporate income taxes in January 2011.
"Illinois continues to face staggering fiscal challenges. While tax revenues are up significantly, the falloff in federal revenues and current revenue funding of the payments to the pension systems create a situation where Illinois is essentially treading water," Topinka's quarterly report on Illinois finances states.
As for the immediate future, the report says that will be determined by the budget decisions made for the upcoming fiscal year that begins July 1.
"The outlook for the remainder of the year will depend on the performance of revenues and spending decisions made by state agencies and the General Assembly," the report states.
Topinka's use of the phrase "treading water" is more generous than circumstances warrant.
Those who tread water generally are fortunate enough to have their heads above water. But when it comes to the state's budget picture, Illinois is clearly under water.
The state is deeply in debt and, as Quinn warned last week, could face a dramatic reduction in its bond rating if legislators do not take strong action on the spending side of the ledger.
As circumstances now stand, Illinois' backlog of unpaid bills is more than $5.5 billion, up $1.3 billion over the past three months.
That, of course, is not good. But the numbers are probably far worse than Topinka reports because not all unpaid bills have been submitted to the comptroller's office for payment. Topinka reports that the Department of Health Care and Family Services "is holding an estimated $2 billion in Medicaid bills."
"When Medicaid and other unpaid state obligations are considered, Illinois' estimated bill backlog at the end of the quarter rises to more than $9 billion," the report states.
There was some good news in Topinka's report. Sales tax revenues increased by more than $300 million, indicating a slight rebound in the economy.
Not surprisingly given the mammoth income tax increases legislators approved, income tax receipts skyrocketed.
Revenues from individual income taxes grew by $3.5 billion, roughly 50 percent, through the quarter. Those who recently filed their state income tax forms for 2011 will, no doubt, understand why income tax revenues increased by such a staggering amount.
Corporate income tax revenues jumped by more than $360 million, about 33 percent.
At the same time, federal tax revenues dropped by $2 billion, a decline "attributed to a decrease in the federal reimbursement rate for Medicaid payments, and a slowdown in reimbursable payments."
These numbers show just how dire the circumstances are, and they require tough decisions by legislators who hate making tough decisions when they are running for re-election.
Quinn prescribed tough medicine for two of the state's biggest budget-eating programs. But he also cited other areas where spending reductions will have to be made if Illinois ever is to recover its fiscal equilibrium.
Given the unrelenting financial bad news, legislators will have no choice but to follow Quinn's lead or come up alternate plans to achieve the same goal.