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Overdue, outdated financial report shows Illinois' deficit grew by $6 billion

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Friday, August 30, 2019  |  Article  |  By Greg Bishop | The Center Square

Budget--State (8) , Comptroller (21)
State officials released an overdue and outdated report Thursday that showed the state's financial health continued to decline in fiscal year 2018.

The Auditor General and state Comptroller released the Comprehensive Annual Financial Report on Thursday for the fiscal year that ended June 30, 2018.

Auditor General Frank Mautino’s analysis showed the state’s net position continued to deteriorate with a deficit that increased by $6.4 billion.

“The net position of governmental activities continued to deteriorate and the deficit increased by $6.4 billion from June 30, 2017, to June 30, 2018,” the report said. “Overall, the net position of governmental activities is reported as a deficit of $189.1 billion. ”

Comptroller Susana Mendoza said the state’s deficit was cut in half.

“Illinois cut its general funds deficit by $6.849 billion – from a deficit of $14.612 billion in fiscal year 2017 to a deficit of $7.763 billion in fiscal year 2018,” Mendoza said in a statement. “That is largely because of a refinancing of state debt from high-interest to low-interest repayment. ”

Truth In Accounting Research Director Bill Bergman said his review of the report found the state still spent about $6 billion more than it brought in. He said that was better than the year before.

“It’s only improved in the sense that it’s still getting worse, but at a slower pace,” Bergman said.

A new addition to the report showed the cost of other post-employment benefits that go to retired government workers. Bergman said he has been trying to track those expenses.

“Those arrive on the balance sheet this year for the first time to the tune of $55 billion and that’s up from what we estimated from last year at $53 billion, so there’s further deterioration there,” Bergman said.

The state's total unfunded pension debt combined with its other post-employment benefits was more than $188 billion, according to the report.

The Comprehensive Annual Financial Report was released 425 days after the end of fiscal year 2018.

“Illinois’ report is the latest its ever been at 245 days after the 180 days standard and long past the passage of the state budget,” Truth In Accounting Founder and CEO Sheila Weinberg said.

Bergman said that was a problem.

“What we learned today is from a year that happened more than a year ago,” he said.

Bergman said late reports lead to poor budgeting.

“In order to plan for the future, where you stand depends on where you sit,” he said. “And if you don't know where you’re sitting, it develops planning for the future in an area of uncertainty that is not healthy for the long run of the fiscal health of this state.”

The Comptroller blamed the delay on the previous governor’s administration. She said that former Gov. Bruce Rauner's administration used a third-party information technology vendor that lost data.

“We should not expect outside consultants to perform critical government functions, especially regarding data involving eligibility determinations under the state’s Medicaid program serving the state’s most vulnerable citizens, without adequate controls to protect the state’s program and ultimately state taxpayers,” Mendoza said.