Six months after Kirk’s debt report was published, Illinois’ fiscal situation continues to deteriorate
CHICAGO–(ENEWSPF)–April 11, 2012. As the Illinois General Assembly prepares to cast a critical vote on our state’s Fiscal Year 2013 Budget, United States Representative Randy Hultgren (R-Ill.-14) today provided an essential and timely update to United States Senator Mark Kirk’s (R-Ill.) Report on Illinois Debt, originally released in October 2011.
The Report warned of a growing crisis of expanding debt, unfunded obligations, and unpaid bills. Since the Report’s publication, the state’s fiscal situation has worsened. Illinois leaders have failed to make necessary changes: increasing taxpayer liabilities, deteriorating the state’s fiscal environment and incurring an additional debt downgrade by Moody’s Investor Services. The Moody’s downgrade from A1 to A2 leaves Illinois with the lowest rating in the nation, a full grade below California, which is the second worst rated state in the nation.
In the six months following the original Report, Illinois’ continued financial mismanagement has resulted in billions of dollars more in unpaid bills and unfunded obligations. There are currently $6 billion in past due bills at the General Fund alone. If this trend continues, the unpaid bill backlog could hit $9.2 billion by the end of the fiscal year, and $34.8 billion over the next five years. Additionally, unfunded pension liabilities are expected to jump to nearly $90 billion by the end of the fiscal year, and will likely continue to increase for nearly 20 years if necessary pension reforms are not enacted.
“Last year, the General Assembly raised taxes on hardworking Illinoisans, but the statistics reported today make it clear that Illinois cannot tax its way back to prosperity,” Rep. Hultgren said. “Instead, it’s time for our state’s leaders to take action and make the tough decisions needed to return Illinois to fiscal health, and they should begin doing so when they return to Springfield next week. Illinois cannot afford to continue on its current path – and Washington will not bail the state out.”
“Governor Quinn and the General Assembly failed to make necessary fiscal reforms during the state’s fall veto session,” said a spokesperson for Sen. Kirk. “As a result, our credit rating has been downgraded to the lowest in the nation, unfunded pension liabilities have increased by billions of dollars, and unpaid bills continue to pile up. In the coming weeks, the state leaders have an opportunity to avoid repeating past mistakes.”
In early 2011, Illinois pursued tax increases instead of addressing short and long-term liabilities. A year after the tax hike, Illinois has jumped to having the latest Tax Freedom Day in the Midwest, April 23, and is now tied for 5th latest in the nation. In other words, it takes Illinois taxpayers longer to pay their total tax burden – local, state and federal taxes – than Americans in 44 other states. In spite of this overall higher tax burden, Illinois has not eliminated, or even significantly impacted, its debt.
For full text of the Report on Illinois Debt: Update, click here.