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 The State’s new fiscal year starts July 1, 2015. If a budget is
not in place on July 1, the Illinois Constitution and State statutes
severely constrain the State’s authority to make payments to fund
operations and services. While there are limited payments that the
Comptroller is authorized to make in the absence of a budget,
Illinois law is clear that the State cannot continue to fund all
government operations and services in the absence of a budget passed
by the legislature and signed into law by the Governor.
As background on this issue, the Appropriations Clause of the
Illinois Constitution provides that "The General Assembly by law
shall make appropriations for all expenditures of public funds by
the State." Ill. Const. art. VIII, § 2(b). In keeping with that
constitutional provision, the State Comptroller Act prohibits the
Comptroller from paying vouchers that are not "pursuant to law and
authorized." 15 ILCS 405 /9(b) (2012). Additionally, the Finance
Article of the Illinois Constitution provides the "The State . . .
shall incur obligations for payment or make payments from public
funds only as authorized by law or ordinance." Ill. Const. art.
VIII, § 1(b) (emphasis added).
 The Illinois Appellate Court has specifically addressed the issue of
whether the State can pay employees in the absence of a budget.
During the budget impasse in 1991, a number of State employee unions
sued the Comptroller and asked the court to issue an order
compelling the Comptroller to issue paychecks due on July 15. In
AFSCME v. Netsch, 216 III. App. 3d 566, 568 (4th Dist. 1991), the
court held that the Comptroller could not pay State employees in the
absence of an appropriation and "any attempt by the comptroller to
issue the funds in the absence of an appropriation bill signed into
law by the governor would create obvious problems under the
separation-of-powers doctrine." The Netsch court determined that an
appropriation was necessary "to prevent government operations from
being brought to a complete stop." Id. at 568-69 (citing People ex
rel. Kirk v. Lindberg, 59 III. 2d 38, 42-43 (1974)).
As the Netsch court clearly stated, the Illinois Constitution and
statutes prevent the Comptroller from continuing to pay
expenditures, including the State’s payroll, without a budget, and
even a court cannot order all of these payments to be made. In
requiring a budget before the State can expend money, with limited
exceptions, Illinois law is similar to federal law and the law of
other states. That is why the federal government and numerous states
have faced shutdowns over the years when budgets have not been
implemented.
The State has experienced budget impasses in two recent years – 2007
and 2009. In 2007, after the legislature and the Governor enacted a
one-month budget, the State began August without a budget in place.
In early August, while the legislature was meeting to consider a
budget, AFSCME sued the State, asking a court to order the
Comptroller to issue paychecks. The arguments in that case focused
on whether the State was prepared to comply with the federal Fair
Labor Standards Act (FLSA), which mandates that employees who are
covered by that law must be paid the federal minimum wage on the
date that their regular paychecks are due or the State will be
liable for damages and interest. Because federal law takes
precedence over the Illinois Constitution, the State is required to
comply with the FLSA, even in the absence of a budget. At the time
that AFSCME sued in 2007, State agencies and offices were not
prepared to pay a FLSA-compliant payroll in time to meet with August
payroll deadlines.
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The court’s order thus allowed the State to pay the full payroll
only to the extent it was not feasible to pay a payroll limited to
FLSA compliance. In doing so, the court made clear that the order
did not establish any precedent for such an order in the future. No
Illinois court has ever entered an order authorizing full payment of
the State’s payroll in a situation where compliance with the FLSA
was feasible and no budget was in place. The only other recent
example occurred in 2009, when the State did not have a budget in
place in mid-July. AFSCME sued on July 14, 2009, seeking a court
order to compel the Comptroller to issue paychecks. The Attorney
General’s Office opposed that suit based on the clear requirements
of the Illinois Constitution. On July 15, 2009, prior to the
resolution of that suit and another suit by the Fraternal Order of
Police, the legislature passed a budget.
Based on the Illinois Constitution, and consistent with previous
litigation, the Attorney General has provided the constitutional
officers with an overview of the application of the FLSA, so that
State offices and agencies can be prepared to comply with that law
in time for the payroll deadlines in mid-July. A copy of that
guidance is attached.
Additionally, to ensure that all State offices and agencies are
prepared, if necessary, to continue providing essential or core
government services, the Attorney General also provided the
constitutional officers with an overview of the process for
identifying essential personnel and services. The Attorney General’s
Office has indicated it will work with the respective constitutional
offices to ensure that their essential government functions and
personnel are appropriately identified and maintained in the
interest of the health, safety and welfare of the people of
Illinois. A copy of that overview is also attached.
[Office of the Attorney General Lisa
Madigan]
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