Illinois state debt, 2004-2017

in Illinois

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Illinois debt

Financial figures

Total state debt: $64,221,381,000

Per capita debt: $5,002

State budget and finance pages • Total state expenditures • State debt • Tax policy in Illinois

State debt refers to any debt owned by a state government. Debt may include any financial obligations a state has that have not been paid, such as bonds issued by state governments, money borrowed by a state government that has not been repaid, or post-retirement benefits promised to state employees. According to the U.S. Census Bureau, Illinois had a debt of $64,221,381,000 in fiscal year 2015. The state debt per capita was $5,002. This ranked Illinois fifth among the states in debt and 11th in per capita debt. The total state debt owned by the 50 states was $1.15 trillion with a per capita debt of $3,582.^[1]

It is important to note that the below figures reflect various sources with different methodologies. The U.S. Census Bureau figures do not include any debt owed by local governments in the states, debt owed by the federal government, promised pension payments that have yet to be funded, or unemployment trust fund loans. Information on debt per capita was not directly available from the U.S. Census Bureau, and was calculated using the census figures for state debt and population. State debt figures from the State Budget Solutions report below were calculated using data from the states' 2012 comprehensive annual financial reports. To access the complete SBS report, including methodology details, click here.^[2][3]

State debt

The tables below detail the debt figures in Illinois compared to those of neighboring states.

U.S. Census Bureau

State Budget Solutions 2014 report

Public pensions

See also: Illinois public pensions

The U.S. Census Bureau does not include unfunded pension liabilities in its debt calculations. Others, including the State Budget Solutions report above, do take these figures into account. Between fiscal years 2012 and 2014, the funded ratio of Illinois' state-administered pension plans increased from 40 percent to 41 percent. For fiscal year 2014 the pension system's liability totaled $190,179 million.^[4][5]

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This in turn results in lower interest costs, thereby lowering the cost to taxpayers. A high state debt may cause credit rating agencies to predict that the state will not be able to pay its debt, and so cause them to downgrade a state's credit rating.^[6][7]

The table below lists the Standard and Poor's credit ratings for Illinois and surrounding states from 2004 to 2017. Standard and Poor's grades range from AAA, the highest available, to BBB-, the lowest.^[8]

Studies

Truth in Accounting 2017 report

In a report released in September 2017 by the nonprofit Truth in Accounting (TIA), states were ranked by taxpayer burden, a term that reflects "the amount each taxpayer would have to send to their state's treasury in order for the state to be debt-free" as of 2016. Illinois ranked 49th, with a taxpayer burden of $50,400.^[9]

To figure a state’s taxpayer burden or surplus, TIA looked at a state’s total reported assets minus capital assets and assets restricted by law (buildings, roads, land, etc.) to calculate “available assets,” which were then compared to the amount of money the state owes in bills, including retirement obligations such as pension plans and healthcare benefits for retirees. If the difference between available assets and total bills was positive, TIA called this a taxpayer surplus; if it was negative, this was a taxpayer burden. This amount was then divided by the number of individual tax returns with a positive tax liability, thus expressing the total state surplus or burden on a per-taxpayer basis.^[10]

The table below lists the taxpayer burder or taxpayer surplus in Illinois from 2009 to 2016. In the table below, negative figures represent a taxpayer burden, while positive figures represent a taxpayer surplus.^[9]

Noteworthy events

Illinois credit rating

See also: Illinois state budget and finances

On June 1, 2017, Stanford and Poor's Global Inc. and Moody’s Investors Service, credit rating agencies, downgraded Illinois’ credit rating. S&P also said that it might downgrade the state's credit rating further if the state failed to adopt a budget. The downgrade placed the state’s credit rating at one step above a junk rating (a low rating which indicates the state is a high risk investment). At the time of the downgrade, the state had not passed a budget in two years due to disagreements between the Democratic state legislature and Republican Governor Bruce Rauner. According to S&P analyst Gabriel Petek, “the rating actions largely reflect the severe deterioration of Illinois' fiscal condition, a byproduct of its stalemated budget negotiations, now approaching the start of a third fiscal year.” Prior to this downgrade, Illinois' credit rating was the lowest in the country. If downgraded again, Illinois would become the first state to receive a junk rating from a credit agency.^[11]

On July 6, 2017, the Illinois General Assembly passed a $36 spending plan and $5 billion tax increase. The legislature overrode Rauner's veto to pass the budget, which ended the two-year budget impasse. Moody's Investors Service said they may downgrade Illinois' rating despite the budget. On July 5, after the state Senate voted to override the veto, Moody's wrote that, "so far, the plan appears to lack concrete measures that will materially improve Illinois' long-term capacity to address its unfunded pension liabilities." S&P, in response to the budget passing, removed the state from its credit watch for a potential downgrade.^[12][13]

On October 9, 2017, S&P maintained the state's BBB- rating following the state's plan to sell $6 billion in bonds. The agency told the state that it still faces fiscal issues that could push the rating down further.^[14]

Recent news

The link below is to the most recent stories in a Google news search for the terms Illinois debt. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.

See also

• Illinois state budget and finances
• Tax policy in Illinois
• Illinois public pensions
• Illinois State Senate
• Illinois House of Representatives
• Illinois State Legislature
• State debt

Footnotes

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