“A lie gets halfway around the world before the truth has a chance to get its pants on.”
-Winston Churchill
By: Mark Glennon*
Actual results. They are what matter.
If you want the actual financial results for the State of Illinois you must look at the audited financial statements contained in the annual “CAFR” – the Comprehensive Annual Financial Report. You cannot rely on politicians’ budgets because they’re just plans for how the state will use its available cash. They pretend that borrowed money is income and ignore growing debts. That’s explained in plain English here by Truth in Accounting.
Illinois published actual results in its newest CAFR this week for its 2021 fiscal year that ended June 30, 2021.
It’s dismal, and in sharp contrast to the endless bragging by many Illinois politicians about “balanced budgets” and the end of the state’s fiscal crisis.
In layman’s terms, the state lost another $4.5 billion for the year. In accountants’ language, that’s the drop in the state’s “net position,” which is like “net worth” in private sector financial statements.
To put that $4.5 billion in perspective, Illinois lost about 10% of its annual total budget.
The loss is particularly startling when you remember two big factors that helped the state immensely in fiscal year 2021.
First, it was a fantastic year for the stock market, bolstering pension assets, which are a major factor in whether the state wins or loses in any year. In 2021, S&P 500 stocks gained over 35%.
Second, the bulk of the massive federal cash gusher labeled as pandemic relief arrived in that fiscal year. That relief totals over $180 billion for Illinois to date. Some of that went directly to state and local governments, and the rest went to the private sector, pushing tax collections up far beyond expectations.
The loss would have been far worse without those two pieces of help.
The $4.5 billion loss for 2021 drove the state deeper down in its worst-in-the-nation hole of nearly $200 billion, which is the accumulated losses in the state’s net position. Those losses total $154 billion over the last ten years alone. No other state is even close to having that kind of accumulated deficit except New Jersey. Only ten states have any deficit at all, and most of those are tiny.
Yet a day rarely passes that we don’t hear bragging from Illinois’ political establishment, particularly from Gov. JB Pritzker, about how they’ve balanced the budget. Pritzker has made that claim every year of his administration despite actual losses each year. He even recently testified before a committee of the U.S. House of Representatives that Illinois now has budget “surpluses projected for years to come.”
And now Pritzker is making those claims part of his presidential pitch. In his recent presidential teaser speech in New Hampshire, he claimed balanced budgets among his successes.
Illinois Comptroller Susana Mendoza is also among the most frequent bamboozlers on the state’s finances. Most recently, in a Friday statement, she included the budget claim along with her usual claim that the elimination of the state’s bill backlog proves that the state is on sound footing. It does not, as we’ve often explained.
They are hardly alone. Politicians in both parties have often claimed to have balanced budgets when money was in fact being lost hand over fist. They have included former Gov. Bruce Rauner and some GOP members of the General Assembly.
How do they get away with this?
The press lets them.
The actual financial statements are ignored by almost all Illinois media every year, and claims about balanced budgets go unchallenged. It’s annual malpractice in journalism.
The charts above tell the actual results in graphic form. The first shows how Illinois’ net position has plummeted since since 2002, which is about when it was at an even zero, and its numbers are taken from the state’s own CAFRs. The second shows how Illinois’ accumulated losses compare to other states and is from the Illinois Auditor General.
Don’t get duped by “balanced budget” claims in Illinois.
*Mark Glennon is founder of Wirepoints.
Related columns from Wirepoints:
- Nine things Gov. Pritzker didn’t tell you about Illinois’ 2023 budget
- Did Federal Bailout Help Illinois Budget Or Not? Pritzker And Congressman Krishnamoorthi Tell Congress A New Story
- Juiced Up Budgets In Other States Attributed To Federal Aid, But Pritzker Claims Credit In Illinois
- Susana Mendoza Just Can’t Stop With Her Biggest Whopper
- What balanced budgets? Illinois Auditor General report debunks Pritzker claims
- Office Doubles Down, Calls Wirepoints’ Critique “Fringe, Apocalyptic Ranting:” Our Response.
- Plain English Video On Why Phony ‘Balanced’ Budgets Are Key To Our State And Local Fiscal Crises
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.
The founding fathers wrote a solution to politicians who continuously and willfully defy the constitution and lie about it. IT is just a piece of paper unless we the people hold these politicians accountable.
So Gov. Fred Flintstone is lying again?
W/o Wirepoints and Illinois Policy, no one in Illinois would see the fiscal truth! Incredible the gaslighting going on with the establishment media in Illinois – they are definitely a huge part of the problem.
Thanks again, Mark and Wirepoints, for making this situation easy for the average citizen to understand. It ought to be required reading before entering the polling place in November . Just like the required reading we have to do when we fill up our gas tanks touting Pritzker’s kindness to the people of Illinois.
Happy Fourth of July to all!
Move from Illinois to Tennessee (or most other states) and all that debt is no longer your problem. What a great deal, but only if you take advantage of it. God bless the U.S.A. Happy 4th of July everyone.
I saw the handwriting on the wall and moved my family to Tennessee back in 2020. Although I miss my family and friends in Illinois it’s one of the best financial decisions I ever made. BTW, TN runs a budget surplus every year without a state income tax!
That’s right. And we have schools, police, firefighters, libraries, and decent roads. Illinois offers nothing that Tennessee doesn’t have. The people of Illinois must enjoy getting ripped off.
Great analysis as usual. The press is clearly negligent on this issue, as it is on so many other issues. But it is ultimately Illinois citizens who are letting the politicians– and the press– get away with it. Granted, the topic is too complicated for most folks, but where are the relevant organizations in this state on this topic– like the Chamber of Commerce, Municipal League, Civic Federation, Economics Club, etc. and the dozens of higher ed professors who can understand this. Illinois has the fatal disease of citizen apathy that is leading to inevitable collapse.
Negligence implies an honest mistake, like ooops, sorry, I messed up. aka missing a stop sign while changing the radio station. The step above negligence is something called willful and wanton, meaning it was a mistake, but not an honest one, because the act or omission was done with reckless disregard. The press is not acting recklessly. Drunken driving is reckless, you didn’t intend to cause a bad accident but it was certainly an outcome that was possible. Finally, the next step above that is intentional. That means someone does an act or omission intending to cause an outcome. This… Read more »
It’s unacceptable that we had to wait until the end of *this* fiscal year to find out how we did *last* fiscal year. The state released an interim report at the halfway point. Any idea how the year end loss compared to what was reported on the interim?