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An analysis by Pew Charitable Trusts shows that Illinois is one
of only two states in the country with total tax revenue
shortfalls exceeding 5% of total expenses, and the only ones
with annual deficits in each of the past 15 years. The other
state is New Jersey.
Pew state fiscal health manager Joanna Biernacka-Lievestro said
Illinois is in select company.
“Nine states failed to collect enough revenue to cover their
long-term expenses over the 15 years ending in fiscal 2020,”
Biernacka-Lievestro said. “Secondly, Illinois was one of two
states that struggled the most.”
After New Jersey, Illinois had the largest deficit with
aggregate revenue able to cover only 93.9% of aggregate
expenses. In comparison, Indiana and Iowa were both close to
104%. Alaska collected 103.5%, yielding the largest surplus.
The report looked at states' balances year by year, and
shortfalls mainly occurred during and immediately after the
Great Recession, suggesting that most state’s fiscal challenges
were temporary. A majority of states balanced their books as the
country’s economic recovery took hold and have kept them
balanced. Still, 15 states including Illinois in fiscal 2016 and
2017 failed to amass enough revenue to cover their annual
expenses. That's despite Illinois commonly ranked as among the
highest taxed states in the country.
“Some states have an annual deficit here or there like for a
recession or something like that, but then they get back in the
clear,” Biernacka-Lievestro said. “Illinois unfortunately is
recording annual deficits every year.”
The report notes all but one state, Montana, had one or more
years in the red. But chronic shortfalls, as with Illinois and
New Jersey each year since fiscal 2002, are one indication of a
more serious structural deficit in which revenue will continue
to fall short of spending absent policy changes.
Kevin Bessler reports on statewide issues in
Illinois for the Center Square. He has over 30 years of
experience in radio news reporting throughout the Midwest.
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