More specifically, the State of Illinois hasn't paid out all budgeted funds to any of its state universities (to be completely fair here, this is because there is no funds to allocate, not any particular mustache-twirling).
State universities are responding by cutting their own budgets. University of Illinois imposed "furlough days", which amount to "don't come in on these days, you're not getting paid for it". Southern Illinois University, where I attend, has tried to do the same thing and is in a nasty fight with the various unions representing faculty (tenure track and non-tenure track), civil servants and even the graduate assistants. That's an entirely different story, though: the unions are claiming that the administration isn't playing fair and is basically using the budget hell to be authoritarian (evil mustache-twirling, which is an odd though when you consider that our new chancellor is a woman).