CHICAGO (Reuters) - Illinois Governor Bruce Rauner on Thursday rejected the possibility of a short-term spending plan to keep the state operating beyond the July 1 start of fiscal 2016 if there is no deal over a full-year budget.
"An unbalanced short-term budget with no real reforms is still a phony budget and unacceptable to the people of Illinois," said a statement from the Republican governor's office.
On Wednesday, Illinois Comptroller Leslie Geissler Munger said nearly all payments handled by her office will cease on July 1 without appropriation authority contained in an enacted fiscal 2016 budget. That includes workers' paychecks and new payments to Medicaid providers.
The Illinois Hospital Association said on Thursday that a lack of state funding for Medicaid, the healthcare program for poor residents, could jeopardize access to services for children, seniors and families, and the ability of hospitals to meet their operating expenses.
"If a budget resolution does not appear likely by the end of the month, the adoption of a temporary one-month budget should be considered to preserve access to essential health services until a final budget agreement is reached," the group said in a statement.
The American Federation of State, County and Municipal Employees Council 31, a union local which represents 38,000 people employed by the state of Illinois, could go to court as it has done in the past to ensure workers are paid, said Anders Lindall, its spokesman, adding that an interim budget could avert a shutdown.
"Failing that, our union will be prepared to do whatever’s necessary to ensure that public services are not disrupted and public service workers are paid on time and in full," he said.
Democrats, who control the House and Senate, have passed a $36.3 billion budget that relies on cuts and at least $3 billion in yet-to-be-identified new revenue. Rauner has insisted that lawmakers approve his so-called turnaround agenda, which includes term limits and a local property tax freeze, before he will consider a tax increase.
The governor's office said a budget deal can still be reached this month with Democrats if they embrace "real reform and compromise to grow the economy."
In 2007, the Illinois legislature passed a one-month temporary budget amid a fiscal 2008 spending dispute with then-Democratic Governor Rod Blagojevich. A full-year budget was not signed into law until Aug. 23, 2007.
(Reporting By Karen Pierog; Editing by David Gregorio and Jonathan Oatis)