Civic Federation examines state’s financial problems
From press release
Illinois’ respected Civic Federation released a report compiled by the organization’s Institute for Illinois’ Fiscal Sustainability that highlighted the state’s current fiscal crisis, and provided detailed information about how Illinois reached this point. (Click here to view the report.)
The Federation confirmed what other respected groups and individuals have advanced: lower-than-anticipated revenues, coupled with the loss of one-time revenue sources and an increase in state spending have only exacerbated Illinois’ financial problems.
According to the report, years of fiscal mismanagement led to a “longstanding structural deficit,” as government growth continued to outpace available revenue. As a result, Illinois is in serious financial trouble, with a budget deficit exceeding $10 billion and a multi-billion-dollar backlog in obligations to state vendors, service providers and health care providers, which continues to grow.
Illinois’ budget mess has been scrutinized by a number of respected organizations over the last few months. The Pew Center for the States ranked Illinois’ budget among the nation’s 10 worst, highlighting the substantial difference between the amount Illinois takes in and the large amount the state spends.
Additionally, all three major credit agencies have cautioned Illinois to get its financial house in order. Fitch Ratings confirmed in late December that Illinois is on negative watch relating to its general obligation bonds. Now, the state is on negative outlook—and ripe for rating downgrades—with all three national credit rating agencies: Fitch, Moody’s and Standard & Poor’s.
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