By: Ted Dabrowski and John Klingner
Illinois had just $4 million of rainy day funds before the Coronavirus hit. That was enough to cover just one hour’s worth of the state’s $40 billion operating budget.
That finding is based on a new report published by the Tax Foundation. The Foundation measured the fiscal year 2020 rainy day funds of each state across the country and compared those amounts to each state’s annual expenditures. States like Wyoming, Alaska, North Dakota and New Mexico had more than 25 percent of their annual expenditures, or at least 3 month’s worth of spending.
The national median was about 8 percent of annual expenditures – meaning most states had cash to cover about one month’s worth of operations.
Kansas and Illinois had zero percent of expenditures set aside. Technically, Illinois had about $4 million in its rainy day fund, or 0.01%.
Of course, the discussion of a rainy day fund is meaningless in Illinois. The state has nearly $8 billion in unpaid bills, billions in budget budget deficits and hundreds of billions more in pension shortfalls.
Illinois politicians may want to blame everybody else for the state’s problems, but the reality is they’ve left the state, and its residents, financially unprepared for any kind of emergency.
Read more about the impact of the Coronavirus on Illinois:
- The COVID-19 crisis: It’s time to move past the public health vs. economy argument
- Illinois’ near-insolvent unemployment trust fund can’t handle surge in unemployment claims, will need to tap federal loans
- Illinois Finally Starts Collecting Key Coronavirus Hospitalization Info.
- Coronavirus impact may push Illinois state pension debt to over $300 billion
- Don’t Let States Rob COVID-19 Funds to Bail Out Pensions
- Bad Public Pension Bailout Ideas Now Surfacing
- State of Illinois provides first look at possible revenue impact from downturn
- Will Recession Revive Discussion of Municipal Bankruptcy and Bankruptcy-for-States?
Expect no retraction or apology. This what they do.
The state’s existing buyout program for its own pensions is the precedent for Chicago, which should be a warning: Look out for similar exaggerated claims and shoddy analysis.
One hour of rainy day funds! I am shocked that Illinois politicians could sock away that much for an emergency!
Laughable
If you live in another state, anyway…
More like a Drizzle or light Dew or even a Mist fund.
“That was enough to cover just one hour’s worth of the state’s $40 billion operating budget.”
For IL government, this is actually very well prepared.
But CPS teachers faithfully contributed 2.5% of their salaries to their pension fund. Never mind the 30% drop in the stock market.
2.5 contribution
3.0% guaranteed COLA
How’s that math going to work out?
Geez did anyone inform Madigan of this situation? He’s in charge you know.
Has anyone even heard even a peep from him lately?
What ever you do, don’t tell the Greedy Unions.
The virus will let Illinois off easier than the Greedy Cops, Teachers and Firemen living on huge pensions in Florida. See you in court in a NY minute.
The ONLY chance is to remove ALL the Politicians in Office and start over with Politicians that actually care about Illinois and the Citizens! This election is your LAST chance. R
Rainy hour fund
hahahahaha good one
Considering Illinois’ massive debt load, does it makes sense for the state to keep cash on hand earning minimal, if any, interest while paying high interest on outstanding bills/bonds/pensions? On the flip side, no rainy day fund means we’re going to being paying those rates anyway because we need to take out loans to pay today’s bills. So perhaps it’s a zero sum game.
Budgetary funds set aside today for a rainy day tomorrow means less fun money for politicians today. Maybe that’s a good thing.
You are correct it doesn’t make sense to let the Democrats and unions who run Illinois have access to any extra cash. This does make clear however that if you add up all of the unpaid bills, then the Illinois rainy day fund is actually negative $8 billion and not $4M.