March 12, 2014

IL ranks Last in Nation again with Record Annual Deficit

March 12, 2014. Springfield. The Illinois State Comptroller’s office has released its annual report detailing the state’s financial condition. The results show Illinois with the largest yearly budget deficit of any state in the nation again this year. The current annual deficit comes in at $47.8 billion. That’s a $1.2 billion increase over 2012’s record budget deficit.

Illinois rivals Iraq and Venezuela with its current debt load. Image courtesy of CMA.

By comparison

Compared to previous years, the budget gap in Illinois has gotten smaller but is still unsustainable. In 2006, Illinois lawmakers spent $18.7 billion more than they took in with taxes and other revenue. In 2008, the annual deficit had jumped to $24.5 billion. In 2010, it had soared to $37.5 billion. And last year, the fiscal year which was just released today, showed a $47.8 billion shortfall for just 2013.



The state report also includes a comparison against all 50 states and as usual, Illinois is by far the worst. All but two states were shown to have yearly budgets operating in the black, meaning they take in more than they spend. Only Illinois and Massachusetts were operating under a deficit. The author’s concede that 8 states don’t make their financial data available. But among the 42 that do, Texas had the highest yearly profit bringing in $109.7 billion more than the state spent last year. Alaska, with a yearly surplus of $74 billion was second. And Florida, with an annual surplus of $57.3 billion was third.

Recommendations

The report makes a couple vague and generic recommendations that amount to little more than lip service. It’s not surprising since the state’s Democratic Governor and Democratic-controlled Legislature haven’t been able to work together with the state’s Republican Treasurer and Republican Comptroller to solve much of anything in recent years.

‘We recommended the Office of the Governor and the Office of the State Comptroller continue to work together to resolve the State’s inability to produce timely and accurate Generally Accepted Accounting Principles,’ the report states, ‘The Governor’s Office agreed with our recommendation and stated that the Governor’s Office and the Governor’s Office of Management and Budget are and will continue to work cooperatively with the Office of the State Comptroller to address these challenges with effective solutions.’

Astoundingly, the following paragraph goes on to describe one of the methods state leaders plan to use to lower spending or reduce the deficit. They’re going to spend a windfall of additional money to hire experts and purchases ultra-modern software and computer systems. That action was authorized in October 2013 and the report from the Comptroller’s Office says it expects to be implemented this month.

6 Illinois Agencies misstate financial information

The report from the Illinois Auditor General seems to apologize for the delay in its release. The authors blame a number of factors for that delay including the vastness of Illinois’ finances. They also insist the AG makes every attempt to verify the legitimacy of the financial statements being reported by government department and agency heads. This year, no less than six state agencies were caught filing false data which the Illinois AG ultimately had to adjust to fix the errors.

‘Material misstatements were identified by the auditors at six agencies,’ the report admits, ‘The misstatements ranged from $11.5 million to $202 million.’ Illinois Comptroller Judy Baar Topinka, a Republican running unopposed in the state’s Primary Election next week, insists she released the report now rather than later to avoid any accusations that the timing was meant to embarrass Democrats and sabotage their chances during the November General Election.



She also told local media outlets that of the $1.2 billion in new spending, it was almost entirely due to additional costs for state government employee pensions and other post-employment benefits. Two months ago, Topinka released a separate report showing that Illinois’ skyrocketing debt was costing billions in and of itself.

“Illinois spent $1.45 billion on its general obligation bonds’ interest alone,” she reported in January. On top of that, Illinois taxpayers will have to kick in an additional $1.6 billion this year to pay the interest on the billions borrowed to pay the same government employee pensions that are on the verge of bankrupting the state.

Read the full Auditor General report published by the Illinois Observer.

 

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