Illinois court asked to clarify state payments without budget

[July 03, 2015]  CHICAGO (Reuters) - Illinois Attorney General Lisa Madigan has asked a court to determine what the state can continue to fund in an absence of an enacted budget for the fiscal year that began on Wednesday, she said on Thursday.

That includes a brewing disagreement between Madigan and Governor Bruce Rauner over state employee paychecks.

The attorney general's filing seeks "clear" approval from Cook County Circuit Court that Illinois' comptroller can make payments that do not legally require an appropriation, including expenditures for federal programs, according to a statement from Madigan's office.

"I am bringing this action to ensure that legally supported expenditures can continue to be made and to address the question of how the state payroll is legally managed during the budget impasse," the statement said.

Earlier this week, Rauner assured state workers they would be paid in full and on time. Madigan contended Illinois' constitution and statutes prevent the comptroller from continuing to pay expenditures, including payroll, without a budget. The first fiscal 2016 paychecks are scheduled for July 15.

Comptroller Leslie Geissler Munger, whose office pays the state's bills, said she supported Madigan's request and would also like a court order allowing all state employees to get their normal pay.

The U.S. Fair Labor Standards Act requires essential workers to be paid the federal minimum wage plus overtime in the absence of an annual appropriation. Munger said Illinois' antiquated computer systems make it impossible to adhere to that law, leaving the state open to monetary penalties.

The American Federation of State, County and Municipal Employees and other unions intervened in Madigan's case to argue that employees should be paid their full wages on time as the state did during similar circumstances in 2007.

A hearing has been set for Tuesday.

In addition, 13 unions sued the state in St. Clair County Circuit Court to ensure its members are paid.

Democrats who control the Illinois legislature and the Republican governor are at an impasse over a fiscal 2016 spending plan.

Last week Rauner vetoed a $36.3 billion budget passed by Democrats, saying it contained a $4 billion deficit.

The governor has insisted the legislature take up his reform agenda that includes a local property tax freeze, legislative term limits, and workers' compensation changes, before he will consider a revenue increase.

On Wednesday, the Senate approved a $2.26 billion, one-month budget to fund essential services, and the House could take it up next week. Rauner has signaled he would veto a temporary spending plan.

(Reporting by Karen Pierog; Additional reporting by Ankush Sharma in Bangalore; Editing by Lisa Von Ahn and Lisa Shumaker)

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