Illinois budget—outlook good!
Illinois' credit rating has been upgraded for the first time in more than 20 years. Earlier this year Governor JB Pritzker put forth a bold plan to balance the state’s FY 22 budget by closing some of the state’s array of corporate tax loopholes that have been criticized for years but seldom seriously challenged.
The governor’s plan, which was adopted with only limited modifications by the General Assembly, did not include any furloughs, layoffs, wage givebacks, or facility closures.
Instead, it adds funding for additional staff in IDES, DCFS, and IDVA, makes the entire requisite pension contribution, and pays down the state debt.
In essence, it continues the process of repairing the damage that Bruce Rauner did to the state’s fiscal stability. Rauner ran up billions of dollars in debt while starving state agencies for funding, reducing staffing levels in many key agencies.
The bond agencies reacted very favorably to the new budget—raising the state’s credit rating and forecasting better days ahead for Illinois.
“The state is prudently applying the gains to fully retire federal deficit borrowing undertaken just a few months ago, repay outstanding interfund loans used as budget balancers in prior years and drive down the bills backlog,” stated the Fitch Ratings analysis. “Recent fiscal results and the enacted fiscal 2022 budget suggest further improvements in operating performance and structural balance in the near and medium-term that could support a return to the pre-pandemic rating or higher.”
The upgrades are “another sign of positive momentum for our state’s fiscal condition,” Pritzker said. “The story of Illinois in 2021 is that in the face of a crisis, fiscal discipline and smart economic policy pays off. … Together, in the face of a deadly global pandemic, we enacted a balanced budget for the third straight year of my administration, demonstrating fiscal responsibility works with a vision of governance focused on working families.”
