The Powerballs will stop rolling in Illinois if the state doesn't pass a budget by Saturday, July 1.

As the state approaches its third year without a budget, financial woes caused by this impasse will spill over into the Illinois Lottery.

Powerball stopped its drawings after Wednesday, and MegaMillions will be suspended after Friday if the state's budget stalemate isn't finally resolved. Also, winners of $25,000 or more will see their payments delayed.

The announcement from the lottery is another blow to the Prairie State, facing a $7 billion budget deficit, but not the first one this month. On June 1, S&P Global Ratings downgraded Illinois to BBB- from BBB. That rating is just one degree above junk.

Illinois has failed to pass a budget for the past two years, and fiscal 2018 isn't looking any better. Unpaid bills have ballooned to the equivalent of a third of the state's general fund expenditures, according to S&P. As a result, it could soon be the first state to see its bond rating fall into junk territory.

The situation in Illinois is a cautionary tale for states and municipalities that struggle each year to reach accord and pass a budget.

There are 14 states including Illinois that have yet to complete a budget for the fiscal year that begins Saturday, although many are notorious for passing budgets late and one, Ohio, has a budget that's awaiting its governor's signature. 

The ratings firm noted that the failure of a state to pass its budget could be the result of "a need to work through substantive policy reforms but could also signal a breakdown of structural fiscal alignment." Additionally, many states have procedures in place to protect debt service payments when a budget hasn't been enacted by the start of the fiscal year. But as seen in Illinois, even this doesn't render the situation totally benign.

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