Illinois ends fiscal year in the black with slight surplus (Avon: credit rating, taxes)

[OyCrumbler]

https://www.sj-r.com/story/news/poli...e/70393173007/

There's a slight surplus for Illinois state (a bit over 1% of total state revenue) which *excludes* one-time federal pandemic injections which means that it's reasonable to say that it's an actual balanced budget more or less. What I like about this is that the state is explicitly stating this is a "one-time" budget surplus rather than just trying to roll it into imagined future projections. This isn't the first time the state has had a surplus in recent years, and it's been good about devoting this towards paying off debts as well as offering temporary tax relief and this year is no different with the state saying some of it will again go towards paying off debts. This is fantastic as interest accruing on debts means leaving a more steady surplus for the future and meanwhile the state's rainy day fund now sits at almost $2 billion.

This is a remarkable turnaround from a low point several years back in 2017 when the state had a backlog of unpaid bills of $17 billion and a rainy day fund of less than $60,000. It's really surprising that this turnaround relative to the fairly dire conditions of a few years ago happened. I wonder why this is. For this year, part of it was a bit of hunkering down in anticipation of a recession that didn't happen, but that doesn't explain very well the previous few years individually or together given the very different trajectory. Is part of this about not having someone as poor of a mediator and executive as Rauner out or perhaps not having as corrupt a slimebag as Madigan wielding power? Whatever it is, this is quite surprising.

Here's a more in depth look of how the state has been dealing with debt and actually accounting for spending over the course of the fiscal year rather than just forwarding debts to the next fiscal year with interest: https://www.civicfed.org/civic-feder...yment-schedule

[UniversalTraveler]

I suppose it's a bit like a spit in the bucket. Your absurd taxes being collected are duly noted. But don't count on your gov suddenly putting funds where they should be. That would be a first of the last 40 years.

[OyCrumbler]

Originally Posted by UniversalTraveler

I suppose it's a bit like a spit in the bucket. Your absurd taxes being collected are duly noted. But don't count on your gov suddenly putting funds where they should be. That would be a first of the last 40 years.

That's essentially what's been happening for the last few years where state spending is actually in line with state revenue rather than essentially borrowing against the next year's with added interest. The hole that was dug prior to that was pretty large though, so that's still painful but at least this is now on a reasonable payment plan and there's actually reasonable targeting of debts to optimize for paying down the highest interest rates or most egregious potential fees. It's not going to suddenly undo decades of mismanagement, but it is a surprisingly rapid, relative to what conditions were like just several years ago, difference.

[Maintainschaos]

Originally Posted by OyCrumbler

https://www.sj-r.com/story/news/poli...e/70393173007/

There's a slight surplus for Illinois state (a bit over 1% of total state revenue) which *excludes* one-time federal pandemic injections which means that it's reasonable to say that it's an actual balanced budget more or less. What I like about this is that the state is explicitly stating this is a "one-time" budget surplus rather than just trying to roll it into imagined future projections. This isn't the first time the state has had a surplus in recent years, and it's been good about devoting this towards paying off debts as well as offering temporary tax relief and this year is no different with the state saying some of it will again go towards paying off debts. This is fantastic as interest accruing on debts means leaving a more steady surplus for the future and meanwhile the state's rainy day fund now sits at almost $2 billion.

This is a remarkable turnaround from a low point several years back in 2017 when the state had a backlog of unpaid bills of $17 billion and a rainy day fund of less than $60,000. It's really surprising that this turnaround relative to the fairly dire conditions of a few years ago happened. I wonder why this is. For this year, part of it was a bit of hunkering down in anticipation of a recession that didn't happen, but that doesn't explain very well the previous few years individually or together given the very different trajectory. Is part of this about not having someone as poor of a mediator and executive as Rauner out or perhaps not having as corrupt a slimebag as Madigan wielding power? Whatever it is, this is quite surprising.

Here's a more in depth look of how the state has been dealing with debt and actually accounting for spending over the course of the fiscal year rather than just forwarding debts to the next fiscal year with interest: https://www.civicfed.org/civic-feder...yment-schedule

Definitely a positive note!

[Avondalist]

I think it's because Madigan is gone.

[Kmanshouse]

This is why I voted for JB. People can complain about some of his policies, the toilets, etc. but this dude is the first one that has actually done positive financial things for Illinois in a long time. Our financial state was THE most important issue we have been facing and in that respect JB has done a stand up job (though I'm glad the "fair" tax was shot down).

Yes, we are taxed pretty high, but at least it seems to not be wasted anymore.

[OyCrumbler]

Originally Posted by Avondalist

I think it's because Madigan is gone.

Originally Posted by Kmanshouse

This is why I voted for JB. People can complain about some of his policies, the toilets, etc. but this dude is the first one that has actually done positive financial things for Illinois in a long time. Our financial state was THE most important issue we have been facing and in that respect JB has done a stand up job (though I'm glad the "fair" tax was shot down).

Yes, we are taxed pretty high, but at least it seems to not be wasted anymore.

Yea, I think it might be a combination of these and more. I really hope there's a massive clawback and then some of funds from Madigan and those his corruption benefited, but even without that, it does seem like Illinois somehow finally has a useful adult in the room. Rauner was all rancor--that anger at how Illinois did things was justified by it needed to come with a clearly communicated plan that was executable, and his jettisoning of federal funding on key infrastructure projects seemed more weirdly spiteful and just plain stupid. I didn't feel all that great about JB initially and thought of him more as better than alternatives rather than actually good, but there was an actual plan communicated, and crazily enough, actually implemented even in the midst of the pandemic when lesser governors in sad Illinois tradition would have likely had steered the stress of the pandemic towards railroading funds to themselves and their benefactors. It's pretty wild.

Recently, Illinois has had one of the three main credit rating agencies upgrade the state to A3 which is wild given how **** poor the credit rating of the state had been for much of the 2010s. I reckon when Fitch revisits the ratings system, Illinois will go up a step there as well which means being able to restructure debt to lower interest rates. This also means more favorable borrowing, but thus far it seems like the state has exercised a really high degree of fiscal constraint that's set on staying to its budget and using surplus to pay down the most costly debt while gradually building up a rainy day fund in case of extreme emergencies. I get that debt issuance and credit ratings aren't the most exciting headliners, but the turnaround on this has really been something rare and thankfully good.

[madpaddy]

It sounds like a positive step, but has the elephant in the room (i.e. massive pension fund shortfalls for public employees) been addressed? Last I knew, the shortage was over $100 billion-with-a-"B."

[flamadiddle]

must be taxes from all that marijuana

[Mathguy]

One way to cut through all the noise and BS is to go directly to the states bond ratings.

THe second chart shows the historic ratings and while it is still at the bottom, it's better than it has been.

https://en.wikipedia.org/wiki/List_o..._credit_rating