By Greg Bishop
SPRINGFIELD – An interim annual financial report shows Illinois spent more in the previous fiscal year than it collected in revenue despite claims from elected officials that the state’s budget was balanced.
A public finance watchdog said despite some shortcomings, the interim annual report is valuable, especially as Gov. J.B. Pritzker prepares to propose his budget next week for the coming fiscal year that starts this summer.
The five-page Interim Comprehensive Annual Financial Report is for the fiscal year that ended June 30, 2019. It was published this week by the Illinois comptroller, weeks after the fully audited Comprehensive Annual Financial Report was supposed to be published.
“The report is supposed to be released Dec. 31,” Illinois Comptroller Susana Mendoza’s office said. “Agencies and the Auditor General’s office are still working to complete audits necessary before the CAFR can be released.”
The Auditor General’s office has said it doesn’t comment on ongoing audits or speculate when they’ll be available.
“This Interim CAFR is meant to reassure outside evaluators including the bond rating agencies that the state is keeping pace with its financial obligations,” the comptroller’s office said in a statement. “We stand ready to promptly issue the final CAFR as soon as the final audits are completed and delivered to our office.”
The report found the 2019 fiscal year budget enacted by Gov. Bruce Rauner in the summer of 2018 was unbalanced despite tax revenues to Illinois state government increasing by more than $3 billion, from $74 billion in 2018 to $77.9 billion in 2019. Total expenses were also up, from $80.3 billion in 2018 to $81.5 billion in 2019. The largest amount of revenue, outside of money from the federal government, was from income taxes.
“I commend Governor Rauner for his leadership in helping get us a budget we can balance,” Senate Minority Leader Bill Brady said in June 2018.
“I’m signing this legislation because it is a step in the right direction, but it is not perfect,” Rauner said then.
Overall, Illinois Comptroller Susana Mendoza’s office said in the report for the fiscal year 2019 budget this week there was a negative net position of $187.7 billion, $3.7 billion more than last year’s position of $184.0 billion. Total liabilities were $248.7 billion, an increase of $603 million from the year before.
Unfunded pension liabilities totaled $138.6 billion and other post-employment benefits such as health care for retired state employees added another $54.5 billion in unfunded debt. Net pension liability increased by nearly $5 billion from 2018. Other post-employment benefit liabilities decreased around $500 million from the year before.
Truth In Accounting Research Director Bill Bergman said the report had four major shortcomings: It wasn’t immediately distributed, it wasn’t audited, it was still late, and it lacked components such as the cost of running the state’s universities.
“It’s better than nothing,” Bergman said. “It’s still valuable, and it’s available during the budget negotiation process. In the past, some interim information was still floating around in the General Assembly during that process. But, at least now the public has it and that’s why it’s at least valuable.”
Bergman also said it was valuable because it showed the state’s finances continued to deteriorate. He said the state needs to do better in the future.
“We need faster and more reliable financial reporting in Illinois,” Bergman said. “And we’re not there yet.”
The fiscal year 2018 Comprehensive Annual Financial Report for Illinois was released more than 400 days after that fiscal year ended – later than every other state in the nation. Such audited reports are supposed to be out no later than six months after the fiscal year ends, or Dec. 31 of each year.
Bergman said the interim report, although filed after the Dec. 31 deadline, was the first he’d ever seen. He said he hoped lawmakers read it.
“I think another good thing that will be healthy for our democracy is more conversation between people in the General Assembly and the press as well as the public,” Bergman said. “We all have a shared interest in the state’s fiscal condition and unfortunately one reason we’re so behind the eight-ball today is we haven’t had that discussion in the past.”
The governor is set to deliver his budget address on Feb. 19 in Springfield.
Greg Bishop reports on Illinois government and other statewide issues for The Center Square. Bishop has years of award-winning broadcast experience, and previously hosted “Bishop On Air,” a morning-drive current events talk show.