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The State of Illinois’s Fiscal Challenges and Budget Practices

Author

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  • Beverly S. Bunch
  • Patricia Byrnes
  • Ann L. Schneider

Abstract

In the years following the Great Recession, the State of Illinois has faced serious fiscal challenges including relatively slow economic growth, large unfunded public pension liabilities, and political gridlock that resulted in the lack of a statewide budget for FY2016 and FY2017. The state has continued to use budget practices such as relying on debt to finance operating costs, using one-time or temporary financing mechanisms, and not paying its bills in a timely manner. Although the state enacted a state income tax rate increase in FY2018, the revenues are not sufficient to finance the state’s current services and pay off its existing liabilities. This paper provides an overview of the state’s fiscal situation and budget practices, including what happened during the budget impasse, highlights of the FY2018 and FY2019 budgets, and possible future options for the state.

Suggested Citation

  • Beverly S. Bunch & Patricia Byrnes & Ann L. Schneider, 2019. "The State of Illinois’s Fiscal Challenges and Budget Practices," Municipal Finance Journal, University of Chicago Press, vol. 40(1), pages 27-48.
    • Handle: RePEc:ucp:munifj:doi:10.1086/mfj40010027
    DOI: 10.1086/MFJ40010027
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