By Illinois Radio Network/Cole Lauterbach
SPRINGFIELD – Illinois ranked dead last in terms of fiscal stability using the most recent data that marks the first year lawmakers and Gov. Bruce Rauner failed to agree on a budget. The author of the report notes that the state also had lower taxes at the time.
The nonprofit Mercatus Center at George Mason University released its annual comparison of states’ fiscal stability. Each state was assessed according to its cash solvency, budget solvency, long-run solvency, service-level solvency, and trust fund solvency.
Illinois ranked last.
Mercatus used the most recent financial reports that all 50 states have released, meaning the rankings reflect the first fiscal year Illinois was without a budget. The report shows how the state’s long-term debt balloons to 330 percent of total assets once the state began operating without a formal budget, rather spending based on a series of court orders and agreed upon education bills to keep schools open.
“Illinois’ liabilities would take up all of their assets to be paid and would need even more than what they actually have on hand,” said research assistant Olivia Gonzales, who co-authored the study.
The study measured Illinois’ unfunded pension liability at $130 billion. Other estimates have put the figure above $200 billion.
The report also takes into consideration other post-employment benefits, or OPEBs, in which Illinois has an estimated $52 billion and no reserve dedicated to paying it. By contrast, the national average is 14 percent funding of $14.5 billion per state.
Illinois was also ranked 50th in the year before the impasse began and hasn’t ranked higher than 48th in the last decade.
“It was a persisting, ongoing problem that kind of ballooned in those two years,” Gonzales said.
The report also measures tax burden as a ratio to average income, something Illinois did fairly well on considering the state’s high average annual income, but this was before the most recent income tax increase, a 33 percent hike in the income tax rate to 4.95 percent. Gonzales expects that ranking to fall in the years ahead.
Nebraska took the top spot in the rankings for its fiscal health.
