By: Mark Glennon and John Klingner
The State of Illinois has released its Comprehensive Annual Financial Report for the 2020 fiscal year that ended June 30, 2020.The state lost another $6.7 billion for the year, with its net position falling to negative $194 billion.
The report is key because it contains audited, actual financial results that include that growing debt. The financial statements are on an accrual basis — as opposed to phony government cash basis budgeting. Also, the financials include all units of state government, not just the general fund.
The bottom line is what’s called “total primary government net position.” That’s basically the concept of net worth — assets minus liabilities — and reflects the gradual accumulation of losses from year to year.
For a little perspective on how much the 2020 loss of $6.7 billion is, Illinois collects about $26 billion of personal and corporate income taxes, so the 2020 loss was about one-fourth of that total.
Huge losses are nothing new. This chart shows the plummet into the abyss since 2002:
A couple things to note:
First, a booming stock market didn’t help. Growing unfunded pension liabilities comprised much of Illinois’ loss since 2001. Strong markets generally help reduce losses in pensions. But markets boomed during the state’s 2020 fiscal year with the S&P surging over 40%.
Second, the actual financial statements show why government budgets mean little. In 2020 and in all those years when Illinois suffered huge losses, budgets were “balanced” under the phony accounting standards used for government budgets.
Actual results show a vastly different story. The press typically covers budget battles extensively and politicians brag about ending up with budgets that are supposedly balanced, or nearly so. That misleads Illinoisans into thinking the state comes at least close to balancing its books each year, when in fact things are far, far worse.
We will be carrying further information on the new CAFR as we review it in more detail.
Audio and summary 
If this bill passes, say goodbye to local control over all Illinois parks and expect to see open drug and alcohol use, needles, no sanitation and fire hazards, but no ordinary park users.
We have a constitutional amendment to prevent this. Bought off politicians have committed treason by allowing an unbalanced budget. Wake up Illinois.
The fruits of Porky’s stewardship! What a guy!
JB, is this Rauner and Trump’s fault? You are a putz.
I vote to post the actual losses by year in a stand-alone chart.
Balanced budgets not.
Good idea.
Getting out of Illinois September 27, confirmed. There are taxes associated with leaving, but am leaving behind the $194 billion deficit. Will be watching from afar to see where the money will come from. Good luck to all of you left behind that can’t leave. It will be only Democrats left anyway.
I should amend that and say Democrats who think there is nothing wrong in the paradise that is Illinois and keep voting for the status quo and same pols.
Take Care and good luck. Be aware that others who also move out do not bring their political views with them to your state. They can easily and quickly change the political landscape.
Our new home in SC is filled with refugees from high tax states like NJ and IL. You don’t move to SC without knowing what the politics there are like. Nikki Haley, Tim Scott. We don’t get CA people. MT, ID, AZ and TX have to worry about the influx from CA as well as illegals being dumped there.
Who cares, spend the money. It not like anything bad will ever happen. It’s all fake money anyway.
I think that’s actually a fair summary of how about half of the population and the majority of Illinis lawmakers think.
The governor just signed 40 more bills a few days ago and many more before that. Has anyone figured out the $$$ cost for taxpayers both short and long term when implemented? When the bills were first introduced and later passed is there a cost analysis attached? Even an estimated cost? Back when the 3% compounding was passed then I believe Sen. Shuneman gave estimates on the floor of what if passed will cost the state and taxpayers. He gave some large numbers then but now are pale in comparison. It’s spend now and not worry about those who pay… Read more »
Balanced budgets mean little?
They are flat out scams.
The Illinois balanced budget scam.
Enabling the Illinois Pension Scam.
Scam artists.
Wow, so does this now mean Illinois pols, G Hinze, PPF, etc will have to admit state pension debt is in fact $317 bill and not the usual fake gov cash accounting $144 bill? (sorry if I got my billions wrong-hard to keep up)
Let it burn…. I just got a new box of microwave popcorn – can’t wait to see how this plays out…
Mark–Wow!! shocker, what do you think was the politics for switching to an honest accrual accounting? Maybe, because most other states reports attempt to use some type of accrual accounting in their fiscal reports and with all the $gazillions$ in fed aid, Illinois reports would stand out as a complete con job by still sticking to fake government accounting gimmikes?
There was no switch. The annual CAFR has always been accrual based, it’s just that the politicians and most of the press ignore it.
Strange that Mendoza didn’t proudly announce the release of this report like she does everything else. Maybe because it came out two months *after* the following year’s fiscal year close. Pretty embarrassing for a CFO.
To be fair, the cause of the delay is unclear. Mendoza publishes the CAFR and adds some comments, but it seems to me the bulk of the work is on the state auditor general, not her, and we don’t know if there were underlying challenges of some kind that justify the delay.
But Mendoza typically doesn’t shy away from blaming others. I seem to recall a prior year’s report came with an explanation of tardiness. Either way, her letter within the report is dated August 12, so she’s sat on this for 2 weeks without any announcement. Not a good look for someone who brags about transparency. Mendoza is playing the game of relevance. Wait long enough, then the numbers become less relevant, interest in said numbers wanes, and more recent news is released to hide the bad numbers (ie the TRS investment returns of 2021). Guessing the usual players in the… Read more »
Machine first, honesty, integrity, and fiduciary responsibility second…. Well, maybe last. Do Lori and JB know how to fiddle?