CHICAGO (Reuters) - Illinois will lose its budget director just as the state's temporary fiscal 2017 spending plan expires, the governor's office said on Friday.

Tim Nuding, who joined Governor Bruce Rauner's administration when Rauner took office in January 2015, is "transitioning out of state government" and will be replaced by Scott Harry, current chief of staff for the governor's office of management and budget, according to the announcement.

Nuding, who spent more than two decades as a member of Illinois Senate Republican staff before becoming budget director, has been a central figure in keeping Illinois operating despite its ongoing budget battle.

A six-month budget approved in June ends on Dec. 31, leaving funding for operations and services not covered by court orders or ongoing appropriations up in the air. Primary and secondary public schools were funded for the full fiscal year that began July 1.


Illinois, which has the lowest credit ratings among the 50 states, is limping through its second straight fiscal year without a complete budget. Talks between the Republican governor and Democrats who control the legislature ended earlier this month with no agreement on a budget or a plan to tame a $130 billion unfunded pension liability.

The state's unpaid bills, a barometer of its chronic structural budget deficit, totaled $10.9 billion on Thursday.

Democratic Senate President John Cullerton believed progress was being made toward a budget deal, his spokesman John Patterson said.

Cullerton "hopes the governor will resume talks so we can build on that progress. A full, fair and balanced budget has been the goal all along," Patterson said.

Rauner's office said it is waiting for Democrats to propose a budget plan. The governor has said he wants term limits on state politicians and a local property tax freeze to be included in any deal.

(Reporting by Karen Pierog; Editing by Leslie Adler)

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