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updated: 12/28/2012 9:42 PM

Baar Topinka: Fiscal cliff will cost Illinois

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Associated Press

Illinois Comptroller Judy Baar Topinka estimated Friday that there will be a $1 billion impact on the state budget if Congress and President Barack Obama don't strike a deal before to stop the scheduled federal spending cuts and tax increases.

"Illinois is already spiraling in a mix of unpaid bills, unfunded liabilities, interest costs and credit downgrades," Topinka said in a release. "By going over the fiscal cliff, the federal government will essentially be wrapping an anchor around our ankle -- and the consequences will be devastating."

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Topinka estimated Social Security and income tax increases would lower Illinois tax revenues by up to $500 million. She warned that the fallout from the fiscal cliff threatens to push the state into a recession.

Topinka also said a planned 2 percent increase in Social Security payroll taxes could cost Illinoisans up to $6 billion in take-home pay.

Illinois has a $9 billion backlog of bills owed to vendors and a worst-in-the-nation pension program deficit, which Gov. Pat Quinn has vowed to make his top priority when lawmakers reconvene in Springfield next week. The problem is approaching $100 billion and mounting by $17 million per day.

Obama had scheduled a meeting late Friday with leaders of both parties at the White House to make a fresh attempt to find a solution before Monday night's deadline.

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