By: Mark Glennon

Fifty million dollars! Impressive, no doubt, to the average voter.

That’s how much will go into Illinois’ rainy day fund — a reserve of sorts under Illinois’ budget for next year as proposed last week.

But check out Bloomberg’s article today, “Illinois Rainy Day Fund Almost Nil While Other States Hit Record.” Illinois has $59 million in its rainy day fund, it says. In contrast, U.S. states collectively held a record $74.9 billion in rainy-day funds at the end of fiscal 2019, the ninth-straight year of increases. States theoretically could run operations for a record median 27.9 days with those savings while Illinois has enough for less than one day, Bloomberg says.

The new rainy day contribution would be one-tenth of one percent of the proposed annual budget. Feeling more secure?

Similar story for the pensions, into which the budget would put $100 million more than required by current statute. That’s a lousy one percent increase, and still billions short of “tread water” funding levels for the pensions. That means that even if all the optimistic assumptions behind the pensions prove true, unfunded pension liabilities will continue to skyrocket.

Politicians of all political stripes know that voters are innumerate and most of them exploit it. That’s why I’m not naming our governor in this article, who proposed the budget. Most of his predecessors and decades of General Assemblies, whether otherwise radical or not, also knew the rule, which is part of why Illinois is in crisis. It’s from Saul Alinsky’s Rules for Radicals:

The moment one gets into the area of $25 million and above, let alone a billion, the listener is completely out of touch, no longer really interested, because the figures have gone above his experience and almost are meaningless. Millions of Americans do not know how many million dollars make up a billion.

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Old Spartan
7 months ago

Excellent analysis Wirepoints. And the last paragraph is the key. Our public officials can get away with duplicity and lies because so few citizens spend any time even trying to understand government finance. And it isn’t just ordinary citizens. Very few legislators have the expertise either. In some contexts $25 million is a lot of money. In the context of a rainy day fund for Illinois, it is an embarrassment.

nixit
7 months ago

Wouldn’t the new rainy day contribution be one-tenth of one percent of the proposed annual budget?

joe blow
7 months ago

one interesting way I have found to give the scale of how much a billion is, is to talk about it in seconds

1 million seconds is about 11 days. 1 billion seconds is about 31.5 years. And 1 trillion seconds is 31,709.8 years

Freddy
7 months ago
Reply to  joe blow

Another way is using computer jargon like kilobyte-mega-giga-tera-peta-exa-zettabyte and what taxpayers will be on the hook for YOTTA-byte. Check that one out. Trillion times trillion.