A little long-run perspective on State of Illinois finances

By Bill Bergman

A friend of our organization asked for some help in trying to understand how much the state of Illinois is spending on infrastructure relative to debt service, salaries, and pensions, and looking at where the state is compared to 1960 on this score.

We are going to take a crack at that. It won’t be an easy task, in part because of changes in accounting standards over that time frame.

In terms of some numbers that are more quickly accessible, and relatively free of issues relating to malleable measuring sticks, one thing to look at is interest expense.

Looking at the oldest annual financial report currently at the State of Illinois website, Illinois reported $164 million in interest expense in 1981. That may sound like a lot of money, and it is. But in 2015, Illinois reported $1.7 billion in interest expense – about 10 times as much as in 1981, despite a massive decline in interest rates over that time frame.