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REPORT:
ILLINOIS FISCAL HEALTH AGAIN 2ND WORST IN U.S.
Illinois Policy Institute/
Ben Szalinski
Each
Illinois taxpayers owes $52,000, thanks to politicians spending more
than they already take in. On Nov. 3 taxpayers will be asked for even
more. |
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 A new report from Truth in Accounting found Illinois again has
the second-worst fiscal health in the nation. It’s the second year in a row the
report ranked Illinois as second worst.
Only New Jersey has a worse fiscal position than Illinois, although Illinois has
about $36 billion more in unpaid debts. Kentucky is the only neighboring state
rivaling Illinois’ poor fiscal health, at sixth worst, but its taxpayers owe
less than half of what an Illinois taxpayer is responsible for eventually
paying.
Illinois earned an F grade in the report and designation as a “sinkhole state,”
with each taxpayer being responsible for $52,000 in order for the state to pay
off its bills. The state needs $226 billion to do that
 The report notes the majority of Illinois’ debt comes from state worker
benefits. The state has $56.1 billion in retiree health care debt and $144.2
billion in public pension debt, although Moody’s Investor Services pegs pension
debt at $241 billion using more conservative estimates of investment returns.
Illinois was also the second-last state to submit its Comprehensive Annual
Financial Report – 298 days after its due date.
Truth in Accounting analyzed Illinois’ finances prior to the onset of the
COVID-19 pandemic. Illinois will likely come out of it in a far worse situation.
The report estimates the state will lose $16 billion in revenue as a result of
the pandemic.
Instead of working to address the problem, Gov. J.B. Pritzker blamed the state’s
financial issues on the pandemic, in April saying Illinois would have had a
budget surplus if not for COVID-19. That is false. His current budget is based
on federal aid that may never come and a progressive tax that voters may not
approve.
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As dire as Illinois’ finances appear to be, there
are solutions outlined in the Illinois Forward report compiled by
the Illinois Policy Institute. Public pensions can be saved with an
amendment to the Illinois Constitution that would protect both
retirees and taxpayers. State lawmakers can end 20 years of deficit
budgets by linking spending to economic growth and by strengthening
the requirement that the budget be truly balanced.
Illinoisans for the first time in 50 years have a chance to stop
state leaders from trying to tax their way out of their spending
problems. Pritzker’s counting on his “fair tax” to pass, but an
analysis by the Illinois Policy Institute found it would not
generate the revenue he wants.
It would allow state lawmakers with a simple majority vote to target
different income groups, such as retirees, whenever they need
revenue. The referendum amends the Illinois Constitution to
eliminate the flat tax protection, so state lawmakers will no longer
anger all voters when they hike taxes and can identify income groups
that can give them the revenue they want without the political
backlash they fear.
Illinois needs to stop being the nation’s financial juvenile
delinquent. Voting “no” on the progressive tax will tell lawmakers
it is time to act like responsible adults.
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