(The Center Square) – Illinois is touting its rainy day fund, which has now passed the $2 billion mark. However, some financial analysts say the state is lying to itself about its finances.
After a recent $11.5 million deposit, Illinois’ Rainy Day Fund is now at $2.005 billion, up from $48,000 in 2017, which would have only been enough for the state to run properly for 30 seconds.
“Whatever you think Illinois’ most important program is, funding our schools, policing our highways, caring for the elderly, that program is in jeopardy when a crisis strikes if Illinois has not built up a strong reserve,” Comptroller Suzanna Mendoza said. “The bond rating agencies have been telling us this for years, and part of the reason we got our 9th credit upgrade last week is because we are building up our Rainy Day Fund.”
The state’s unfunded pension liability is also a regular point of concern for the major credit ratings agencies.
Sheila Weinberg of Truth in Accounting told The Center Square that due to debts in the state’s pension systems, Illinois does not have $2 billion in rainy day funds.
“I think the rainy day fund is a misnomer,” Weinberg said. “It is like saying, ‘Hey, look it, I have $1,000 in my savings account, but I ignored my credit card debt.”
Illinois spends over $10 billion a year on public pensions, and the state’s five systems have an unfunded liability of at least $140 billion.
Weinberg said the state should use that $2 billion to cover the pension debts.
“Illinois has underfunded its pension contributions by $5 billion,” Weinberg said. “If the state would have fully funded what their own actuaries say they should have been through the pension plan, then they could have used this $2 billion of rainy day fund and came closer to properly funding its pensions.”
The state only has two options, according to Weinberg.
“The first step is to start paying your minimum payments; that would help,” Weinberg said. “To truly balance your budget, you would have to either bring more money into the budget, or you would have to spend less.”
Illinois has among the highest pension debts in the nation.
