interfund borrowing

WUIS/Illinois Issues

A version of the story first ran in Illinois Issues magazine in April 2012. It has been updated with new information.

The state’s complicated budget mess is a source of headlines for the media and headaches for those who administer state-funded programs and the politicians whose job it is to solve the problem. But most people — politicians, reporters and Statehouse commentators alike — only focus on four out of hundreds of funds when it comes time to craft the state’s budget each year.

Brian Mackey / WUIS

  The budget passed by the Illinois General Assembly does not rely on extending the 2011 income tax hike, as originally planned by Democratic leadership. Instead, it's based on state government borrowing from itself.

Instead of making the five percent income tax rate permanent or chopping away at government programs, lawmakers opted to fill a massive hole in state revenues by doing something called "interfund borrowing."