The first is from Illinois Comptroller Susana Mendoza, who in a letter to Wall Street financial firms that her office just released proclaimed that Illinois is entering the new fiscal year today with its lowest bill backlog in decades, just $2.6 billion, compared to $16.7 billion four years ago at the height of the budget standoff under then-Gov. Bruce Rauner. (Read the letter below.)
Mendoza is right. And, as the Chicago Democrat noted, the state has begun repaying the Federal Reserve the $2 billion it borrowed in the midst of the COVID-19 pandemic last year wholly from its own resources and without tapping the $8.5 billion it expects to get from the latest COVID relief bill.
These actions clearly demonstrate our fiscal responsibility in paying down the state’s short-term debt as soon as possible, which not only serves to save taxpayers unnecessary interest costs but aims to get our backlog of pending liabilities to a lower, more manageable level,” Mendoza wrote. “I believe Illinois is due to be recognized for these efforts to improve its current and future financial situation.”
Indeed, that has begun to occur, with Moody’s Investors Service giving Illinois a ratings upgrade and two other firms raising their outlook on state debt.
On the other hand, Mendoza’s letter neglected to mention the elephant in the room: state pension debt, which continues to rise even though taxpayers now are contributing nearly $10 billion a year to Illinois’ five major state retirement systems, less than what actuaries recommend.
The folks at Wirepoints did not neglect that subject.
In a web post today, the economically libertarian research and activist group noted that Moody’s last year raised its estimated of unfunded state liability to $313 billion and that it continues to rise as a share of gross state product.
That’s true, although Wirepoints based the latter figure on data that runs only through fiscal 2020, when the pandemic was at its worst and the stock market had only begun to recover and boost the value of pension assets.
The group then goes on to credit Illinois’ partial recovery on extra federal spending, something that by its count has brought an extra $138 billion to the state and its residents.
That’s also probably true. But the same kind of extra unemployment assistance, payroll credits for businesses that kept people at work and made up most of that $138 billion, also were replicated in each of the 50 states to one degree or another. The alternative—spending nothing, and letting the country sink into a deep Depression—was something even many congressional Republicans were unwilling to do.
Bottom line: The Illinois glass is neither empty nor full. It’s somewhere in the middle, with continuing debate on the exact location.