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Report: Illinois among most unprepared for economic downturn

Illinois Watchdog.Org

Monday, December 17, 2018  |  Article  |  By Cole Lauterbach

Bonds, Bonding, Borrowing, Debt, Credit Rating , Budget--State (8) , Economy (34) , Medicaid, Managed Care , Pensions (70)

The nonprofit Volcker Alliance, using researchers at a number of universities including two University of Illinois campuses, measured the fiscal health of each state's budget. In nearly every category that researchers analyzed, Illinois was among the worst-run states with the highest amount of debt.

On a scale of “A” to “D-,” Illinois was given the lowest marks in terms of budget maneuvers, legacy costs and reserve funds.

“Promises have been made, but legislatures haven’t funded these promises,” said William Glasgall, senior vice president and director of state and local initiatives for Volcker Alliance. “Two-thirds of the states are also dealing with this issue.”

He said debt, coupled with other budgetary moves like business tax breaks and more spending, means states like Illinois would face trouble in the next recession.

“Illinois is among the states with the highest amount of fixed costs,” he said. “Medicaid, debt service and pension obligations. This reduces the ability of a state to really cope when things get bad.”

At the height of the budget impasse, Illinois had nearly $16 billion in unpaid bills. The state's bill backlog is now about $7.5 billion, according to the Illinois Comptroller’s website. Not counting other post-employment benefits, Illinois has more than $133 billion in unfunded pension obligations.

One category that Illinois excelled in compared other states was its level of budgetary transparency, getting a “B” in that and budget forecasting.