Illinois State Finances Get an “F”

Illinois is known for its budgetary mess, but just how bad is the fiscal condition of the state? Repeated decisions by state officials have left the state of Illinois with a staggering debt burden of $210.4 billion, according to Truth in Accounting's (TIA) analysis of Illinois' most recent financial filings. That burden equates to $50,400 for every Illinois taxpayer, which is $4,900 worse than it was in 2015.

These statistics are troubling, but what's more worrisome is that state government officials continue to obscure large amounts of retirement debt on their balance sheets, despite new rules to increase financial transparency. This skewed financial data gives state residents a false impression of their state's overall financial health.

Truth in Accounting is a Chicago-based nonprofit think tank that analyzes state financial reports when they are published. According to their report for 2016, Illinois only has $25.5 billion of assets available to pay bills totaling $235.9 billion. This means that the state has a $210.4 billion shortfall and a $50,400 taxpayer burden, which is each taxpayer's share of state bills after its available assets have been tapped. TIA's Taxpayer Burden™ measurement incorporates both assets and liabilities, not just pension debt.

Because of an accounting rule implemented last year, Illinois now has to report its pension debt on its balance sheet. This year, the state's reported pension debt grew from $108.7 billion in 2015 to $116.8 billion in 2016. Despite reporting most of its pension debt, the state is still hiding most of its retiree health care debt. Illinois' total hidden debt amounts to $51.9 billion. A new accounting standard will be implemented in two years, which will require states to report this debt on the balance sheet.

The bottom line is that Illinois would need more than $50,000 from each of its taxpayers to pay all of its bills, so it has received an “F” for its finances from Truth in Accounting. In addition, the state's financial report was released 243 days after its fiscal year end, which is considered very untimely according to the 180 day standard.

See how Illinois compares to Iowa, Indiana, and Michigan. http://www.statedatalab.org/c/89fU5dxUb2df72b
Click on the link to go to an interactive chart at Truth in Accounting’s State Data Lab.