The agreement was approved by a Christian County Circuit Court judge on Friday.

"During the last several days we have been working with the attorney general to negotiate this agreement, which means the more than 70,000 state employees will receive their paychecks on time this month," Hynes said. "This is a tremendous victory for the employees who work so hard every day serving the people of this state."

"I want to commend Attorney General Madigan for acting promptly and responsibly in this important matter," Hynes said.

Hynes said his office will process paychecks through the weekend for the first wave of more than 4,900 state workers scheduled to be paid on August 15.

The agreed court order makes clear that the Comptroller did not have the legal authority to pay state employees without either an enacted budget or a court order.

"My position has been that without a budget agreement or a court order, the Constitution barred my office from processing any payroll checks. This court order temporarily provides relief for state employees," Hynes said. "The harsh reality is that it took extraordinary action by the court today to grant this office legal authority to ensure that state employees will get paid on time."

Judge Ronald Spears' ruling addressed a complaint filed in Christian County Circuit Court on Thursday by AFSCME, claiming the state's failure to pay its employees in a timely manner would have violated the federal Fair Labor Standards Act and impaired contractual obligations. Attorney General Madigan represented Hynes in the dispute.

The agreement expires on August 31, which means the budget must be signed by Governor Blagojevich by then. If it isn't, Hynes' office will again have no authority to process payrolls.

The order applies only to state employee payrolls. That means the approximately $100 million in bills the state would normally be paying on an average day will remain unpaid. "Until a budget is signed into law, school districts, social services and tens of thousands of vendors will remain short-changed," Hynes said. "We need a enacted budget and we need it now."