Despite solid revenue growth from recent tax increases and a healthy national economy, the State of Illinois sank $3.7 billion further into the hole in the fiscal year that ended June 30, 2019.
The loss is reflected in an Interim Financial Report recently released by Illinois Comptroller Susana Mendoza. Specifically, the state’s Total Primary Net Position worsened from negative $184.0 billion to negative $187.7 billion at June 30, 2019. Changes in Net Position are the equivalent of profit or loss in private sector accounting.
Losses have persisted since 2001, as shown in the chart below.
Note that the losses occurred despite claims by many members of both parties that the budget for the year was “balanced,” which the media repeat without objection. As we often remind our readers, budget accounting is nearly meaningless and claims of balanced budgets should be ignored. That lesson should be remembered when Governor JB Pritzker delivers his annual budget address next week, which undoubtedly again will be described as balanced.
Salute to Comptroller Susana Mendoza for releasing an interim report, which hasn’t been provided in the past. Ordinarily, the state’s true performance isn’t known until release of complete, audited financial statements, which are often delayed. While the interim report numbers are subject to final adjustments, they provide important information in the meantime.
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.
Why the fall off the cliff in 2014? This chart is a doomsday for IL it will only get worse too as more residents flee.
Changes in accounting rules account for some of those sharp moves. But as we explained in other articles, that doesn’t mean they should be dismissed. They represent an acknowledgement that previous losses were understated. So, in the long run, had the right accounting been in place from the start, the end point would still be the same it’s just that the line would be less jagged.
Would the 188 billion include future pensioner health care benefits? Regardless, the media should be making this it’s top story everyday. I’m no longer in Illinois so I can only guess how little attention this story recieves, and without the media explaining the significance, the typical resident has no concept of what 188 billion means when translated to their own life.
$188B jncludes future pensioner health care benefits for service (work) already performed.
But, only the state’s proportionate share.
Additional proportionate share of local governments is not included in the $188B, because it is the State interim financial report.
Local government proportionate share of State run retiree healthcare (OPEB) programs is in local government financial reports.
Per the State of IL interim FY 2019 CAFR, the combined state proportionate share (does not include local proportionate share) of the unfunded liabilities for the state run pension (TRS, SERS, SURS, JRS, GARS) & OPEB (SEGIP, TRIP, CIP) funds is $193.1 billion. So if the state were fair to taxpayers, that $193.1 billion would be invested. Instead, future taxpayers are obligated to fund and finance the $193.1 billion for service already rendered (work already performed) by the government employees. That does not include the unfunded liabilities for the following “local” government pension funds in Illinois: CHA, Chicago Fire, Chicago… Read more »
M. Pappas Cook County fiscal report, released a couple of weeks ago, showing similar tanking of fiscal position got zero coverage in press also. But im suspicious of anything apparatchik /spin-mister mendoza does, sure release of report will be part of jbs push for his fair tax–watch machine point to reports declining position & blame on t, salt & rauner..but most important threaten chump tax payers that if they don’t approve jbs tax plan to get more revenue service will be cut..that will be the sales job…and have no doubt dullard tax payer/voters will get in line
Looking at state pension & OPEB unfunded liabilities, SEGIP is behind only TRS.
In other words, SEGIP has a bigger unfunded liability than each of the other four state pension funds individually (SERS, SURS, JRS, and GARS).
Shes not blaming decline on rauner? Or just not yet?
So this means the Fair Tax income tax increase, if passed, won’t even cover the operating deficit? Lovely
If Mendoza were to go full Judy Baar Topinka, she’d be calling for both more revenue and reduced spending.