Jul 14, 5:36 PM EDT

The state of Illinois' spending will outstrip what it brings in by nearly $8 billion this year, according to a government analysis first obtained Thursday by The Associated Press



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SPRINGFIELD, Ill. (AP) -- The state of Illinois' spending will outstrip what it brings in by nearly $8 billion this year despite a stopgap budget agreement last month, according to a government analysis first obtained Thursday by The Associated Press.

The Commission on Government Forecasting and Accountability reviewed the budget deal that lawmakers and Gov. Bruce Rauner approved in June on the brink of the new fiscal year, which began this month, at the behest of Republican Rep. David McSweeney.

The report, provided to AP in advance of general release later Thursday, found that the state will spend $39.6 billion - including $3 billion in obligations that were not addressed in the six-month stop-gap budget agreed to by Democrats who control the Legislature and Rauner - but will bring in only $31.8 billion.

"We're setting up a major disaster," said McSweeney, a Barrington Hills legislator, who was one of a handful of "no" votes against the first major budget deal reached in a year. "A tax increase becomes a self-fulfilling prophecy because with every day that goes by, the deficit is getting worse."

The report indicates the deficit as of last month stood at $3.8 billion. The state has run deficits in the billions of dollars in recent years, but never as high as projected Thursday.

The report came on the same day that Republican Comptroller Leslie Munger announced that Illinois' backlog of overdue bills could reach $10 billion by December.

Rauner spokeswoman Catherine Kelly said the governor knows the stopgap plan is not a complete budget but used existing revenues from set-aside funds to cover necessary costs. However, she added, "The deficit is the result of years of our-of-control spending, mismanagement and court-ordered and statutory spending which have locked in higher spending levels."

Rauner continues to campaign for changes in law to control business costs and union power and freeze property taxes to help boost the economy.

It's difficult to find places to cut spending, said Dan Long, executive director of the bipartisan legislative commission: Required payments for state-worker pensions increased by $300 million and interest on borrowed money by $240 million. The state's contribution to Medicaid health care jumped $600 million, and, in approving a full year's funding for public schools, lawmakers increased spending by more than $500 million.

All the while, the state's intake of money is expected to increase by only $400 million for the fiscal year.

"You can either repeal programs and cut spending, or find new revenue," Democratic House Speaker Michael Madigan spokesman Steve Brown said. "You can't do it all through cuts. This reaffirms what the speaker has been saying for several years and reaffirms that the decision to let the income tax go down probably was not the wisest decision."

Rauner took office in January 2015 and got his wish to roll back an income tax surcharge, which had been 5 percent and produced $7 billion in new revenue each year, to 3.75 percent.

The analysis includes $2.92 billion in obligations not yet addressed, including $1.8 billion in group insurance spending and almost $1 billion to restore previous funding levels for higher education.

At an appearance in Chicago, Munger announced that despite extra money from the stopgap budget, the state's pile of overdue bills will grow from $7.8 billion now to $10 billion by December. Funding priorities will be social service providers and contractors who kept providing services without state payments and higher education institutions, said Munger, who called it a "short-term step."

"These severe cash shortages mean that my office will continue to perform triage every day," Munger said.

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Tareen reported from Chicago.

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Contact Political Writer John O'Connor at https://twitter.com/apoconnor. His work can be found at http://bigstory.ap.org/content/john-oconnor.

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