The state's financial trouble is worse than anyone had previously expected, says a new report from the Fiscal Futures Project at the Institute for Government and Politics at the University of Illinois.
Report authors Nancy Hudspeth, Richard Dye and Andrew Crosby write:
HOW BIG IS THE PROBLEM?
- Illinois has a projected deficit--a shortfall in sustainable revenue--on the order of9 billion, or about 12 percent of all-funds spending of74 billion in FY 2016.
- Absent policy changes, this annual deficit will grow over time and reach14 billion in FY 2026.
- IOUs issued to pay for past deficits total159 billion -- more than twice the inflow of revenue in one year.
HOW DID THE PROBLEM GET SO BAD?
Pay-later budgeting. The consequences of borrowing to pay for current spending are cumulative and sometimes hidden, so the practice became the norm.
A succession of temporary revenue surges (the tax collections bubble of 2005-2008, federal stimulus funds in 2009-2011, and the temporary income tax increase of 2011-2014) enabled procrastination in facing up to the underlying mismatch between spending and sustainable revenue.
Continue reading at Reboot Illinois to find out just how problematic the state's deficit is, why it has gotten so big and what the first steps are to recovery.
It looks like it's not just the state itself that is experiencing economic woes, but Illinois families too. The number of the state's households enrolled in food stamps programs by Dec. 2014 hit an all-time high of nearly 1.1 million. Combined with Illinois' worst-in-the-region jobs growth for the year, the state's economic outlook is precarious. See more details about the situation at Reboot Illinois.