Ill. budget woes mean long waits for tax refunds

Associated Press
Updated 4/27/2011 3:19 PM

SPRINGFIELD -- Thousands of Illinois businesses are waiting for the state to pay long-overdue tax refunds, and there's no sign the wait will end anytime soon.

The state owes money to roughly 36,000 businesses that overpaid their income taxes, going back to 2008. The backlog totals about $850 million, Comptroller Judy Baar Topinka said Wednesday.

Gov. Pat Quinn proposed borrowing money to pay the refunds, along with other overdue bills, but legislators have shown little interest in that idea. The budget proposals being considered by Democratic lawmakers would do little to chip away at the backlog.

At Peters Machine Inc. in Decatur, President Jerry Nelson said he continues to wait for about $15,000 dating to the 2008 tax year.

"I've tried to get answers, but no one seems to be in a position to let me know what's going to happen," Nelson told Lee Enterprises newspapers.

Quinn acknowledged Tuesday that his borrowing proposal remains a work in progress.

"I think it's a good plan. We're going to keep working on it," Quinn said during a visit to Macomb.

Lawmakers and Quinn's budget office have also looked into a smaller borrowing package, but a resolution appears to be weeks away, if it is reached at all.

Some companies are getting hit twice by the budget problems. They're waiting for tax refunds and for payment on work they did for the state.

Topinka said the backlog of unpaid bills is about $4.5 billion. The state also owes $1.2 billion for employee health insurance and about $1 billion for bills that will arrive after the budget year ends June 30.

In all, she said, Illinois is on pace to end the year $8.3 billion in the red.

"The prescription for our financial recovery is simple: stop spending more than we bring in. But sadly, that still has not occurred," the Republican comptroller said.

The Illinois Department of Revenue, which administers the state's tax system, says there is little it can do to help frustrated businesses until officials allocate money to pay refunds.

"The bottom line is that there has to be money in that fund," said Revenue spokeswoman Sue Hofer.

Carl Woodward, a Bloomington-based accountant, said his office often gets calls from clients wondering when their money will be refunded.

"They think they'll never get it," Woodward said.