Today’s numbers are lousy
Wednesday, Jan 22, 2014 - Posted by Rich Miller
* The Pew Charitable Trusts has a new interactive analysis of state fiscal health and, of course, Illinois isn’t doing well at all. From an e-mail…
Rich,
Just in time for the start of the Illinois legislative session next week, The Pew Charitable Trusts has launched a new interactive featuring 50-state data on key fiscal, economic, and demographic indicators. Fiscal 50: State Trends and Analysis also features insights and analysis from Pew experts in five core areas of fiscal health: revenue, spending, economy and people, long-term costs, and fiscal policy.
Fiscal 50 launched with six key indicators of state fiscal health, and will be updated with additional indicators, fresh analysis, and new data over time. Our first six indicators are: 1) tax revenue, 2) federal share of state revenue, 3) change in state spending over the past 20 years, 4) employment to population ratio, 5) debt and unfunded retirement costs, and 6) reserves and balances. These indicators were carefully selected to illustrate macro fiscal and economic trends that encourage policymakers to think outside of the annual budget bubble and focus on long-term fiscal issues.
The interactive offers state-by-state comparisons on each of these indicators, so you can quickly see which states are leading and which are lagging behind. The tool also allows you to compare state data to a national benchmark.
For example, in the “Reserves and balances” indicator, you can quickly see that, in fiscal year 2013, Illinois had sufficient reserve funds to operate for just 0.4 days, compared to a national average of 20 days. Of all of the states that report this figure, Illinois had the lowest amount of reserve funding.
Emphasis added for obvious reasons.
- OneMan - Wednesday, Jan 22, 14 @ 9:33 am:
Wow,
The difference in reserve between Illinois, Indiana and Wisconsin is kind of stark…
At least we are ahead of Arkansas…
- Meanderthal - Wednesday, Jan 22, 14 @ 9:38 am:
Pew is no Koch Brothers funded operation either. They are mainstream to left leaning and can’t be said to be doing a hatchet job on Illinois.
Its sad that none of this seems to matter to voters, media or the chattering class.
- Rich Miller - Wednesday, Jan 22, 14 @ 9:55 am:
===They are mainstream to left leaning===
http://capitalandmain.com/promise-breakers-how-pew-trusts-is-helping-to-gut-public-employee-pensions/
- RNUG - Wednesday, Jan 22, 14 @ 9:56 am:
They do a good job of visually presenting the information.
Just comparing IL to itself in previous years:
Tax revenue is up sharply, presumably due to the temp income tax that will soon sunset.
Spending is up modestly by comparison.
Cash on hand is down.
The obvious conclusion is the temp tax hike wasn’t big enough to cover the backlog of bills and the structural deficit in the annual budget.
- Endangered Moderate Species - Wednesday, Jan 22, 14 @ 9:59 am:
===They are mainstream to left leaning ===
Meanderthal, it is not my intention to disagree with the numbers but I disagree with your statement. They are self described as politically conservative. The Pew family are the heirs of Sun Oil. Their beneficiaries include the John Birch Society and the American Liberty League.
- walker - Wednesday, Jan 22, 14 @ 10:00 am:
This is a good site to get comparative state statistics and worth reviewing.
Interesting that of the dozen key indictors of state fiscal health, Illinois is in the middle of the pack on most of them, while we are indeed among the worst on pension liability and cash on hand.
- Grandson of Man - Wednesday, Jan 22, 14 @ 10:09 am:
If there is any good news, it’s that pension reform will help pay down the pension liability. The bad news, of course, is our budget deficit. We know that if we eliminate the income tax increase, we will have larger deficits. The lack of revenue will force cuts to the most vulnerable among us, and that’s something that I do not support as a stand-alone solution, especially in this economy of gains going almost exclusively to the wealthiest.
http://news.yahoo.com/illinois-budget-gap-grow-despite-pension-reform-study-191547384–sector.html;_ylt=A0oG7ifk5t9SzCUAu79XNyoA;_ylu=X3oDMTB0Z3A0YmFyBHNlYwNzYwRjb2xvA2FjMgR2dGlkA1ZJUDI4MF8x
I have said this many times before, but I think we should seriously consider legalizing recreational marijuana. I’m sorry to see that some politicians are not even happy with legalized medical marijuana. We need the economic boost and tax revenue. Support for marijuana legalization has been increasing.
- dupage dan - Wednesday, Jan 22, 14 @ 10:09 am:
=== The obvious conclusion is the temp tax hike wasn’t big enough to cover the backlog of bills and the structural deficit in the annual budget ===
Folks who posted here knew that the temp tax hike wasn’t gonna be enough. Time has shown them to be right. Pleas to address that have not borne fruit. If that tax doesn’t become permanent, the bottom drops out and things could get real bad. Is there political in the GOP, if they retake the mansion, to make the hike permanent? Can I say Ogilvie?
- Steve - Wednesday, Jan 22, 14 @ 10:18 am:
To those who doubts the numbers Pew puts out: everything is fine in Illinois. There’s no problems. The status quo is fine.
- foster brooks - Wednesday, Jan 22, 14 @ 10:19 am:
Confidence is contagious so is lack of confidence
- MrJM - Wednesday, Jan 22, 14 @ 10:31 am:
Isn’t it a little early for a straw-man argument?
– MrJM
- mokenavince - Wednesday, Jan 22, 14 @ 10:33 am:
Don’t shoot the messenger. Our State used to be a place you could always get a job. After 30 years of Madigan rule people and jobs are voting with their feet.
Until he leaves, the State will continue to spiral
down. Our gerrymandered districts offer little hope for change.
Lets hope we elect a smarter governor than Quinn.
- plutocrat03 - Wednesday, Jan 22, 14 @ 10:42 am:
Sobering report, but rather than circling the respective political wagons there is a need to look forward towards a more stable future.
Is it possible for the legislators to consider the financial impact of all new spending initiatives as the devise the new spending plans? The problem developed over many years, so the solution will will require many years to resolve.
How about taking .50 or .75 cents of all new dollars and dedicate the money to fiscal remediation, thus leaving some money foe new programs. Let’s run the numbers and see where that leads us.
It is as unreasonable to expect none of the resources to go toward new spending as it is to expect all the resources to be spent on new stuff. Let’s look for a middle path.
- drew - Wednesday, Jan 22, 14 @ 10:45 am:
Given our backlog of unpaid bills, I’m surprised we don’t have a negative number of days of operation on reserves.
- DuPage - Wednesday, Jan 22, 14 @ 10:56 am:
@10:09=If there is any good news, it’s that pension reform will help pay down the pension liability= ??!!?? The state may well lose in court and have to pay any pension cuts back, with interest.
- Mark Glennon - Wednesday, Jan 22, 14 @ 11:01 am:
Pew is notorious for understating problems because they consistently use a) outdated numbers and b) state-reported numbers, which are full of accounting gimmicks. They did it again. Look at their number for unfunded pension liabilities: &75.7B, the FY 2010 number. Sheesh.
- AnonymousOne - Wednesday, Jan 22, 14 @ 11:11 am:
We are a low tax state. Doubt it? Look at our surrounding neighbors. In fact, look at all 50 and see where we are. Why we have to keep wringing our hands over a lack of revenue and looking at the same programs to slash even more from is beyond me. Anybody who wants stuff but doesn’t want to pay for it needs to leave and go pay 8% elsewhere. What a collection of cheapskates(big business) and con artists(politicians) we have
residing here. The rest are whiners.
- Grandson of Man - Wednesday, Jan 22, 14 @ 11:55 am:
“The state may lose in court and have to pay any pension cuts back”
Yes, I considered that when I wrote the statement. What are we to do now, though? We go with what we have. If and when we get to that point, I believe that we will devise pension reform that will be constitutional.
I would have preferred the A-B pension plan with SB 2404 as a backup bill, but alas, it didn’t come to pass. I also prefer debt reamortization, but that didn’t happen either. I’m just trying to stay out of a negative mindset on our state’s future.
- PublicServant - Wednesday, Jan 22, 14 @ 12:35 pm:
The problem with raw amounts of pension debt which is paid out over future years is that it’s rarely put into perspective. When compared against future state income, the numbers are not as horrible as many would like us to believe. Without the passage of the unconstitutional SB1, the unfunded pension debt would have been able to have been erased with just 37 cents of every $100 of future state earnings. That isn’t great, but it’s not the crisis that just throwing out raw numbers of pension debt seem to imply. Taking a look at Dean Baker’s 2011 paper on state pension debt, written during the bottom of the great recession is a balanced look at state pensions, unlike to Pew FUD:
http://www.cepr.net/documents/publications/pensions-2011-02.pdf
- RNUG - Wednesday, Jan 22, 14 @ 12:41 pm:
Grandson of Man - Wednesday, Jan 22, 14 @ 11:55 am:
You are deluding yourself that the A/B plan was constitutional. You are also deluding yourself that there is any legal pension reform that can achieve significant savings. Tier 2 WAS the legal pension reform with savings.
About all that is left legally is a Tier 3 that totally guts any pension or requires defined contribution for new hires, and then you will end up having to make Social Security contributions for all the members that are not currently in SS, which will be a net cost to the State.
- Ghost - Wednesday, Jan 22, 14 @ 1:07 pm:
this funding issue is no problem, if the State can use itspolice powers to remove debt obligations, we dont have to pay anyone who is owed money. Therefore we have no debt and are the most fiscally sound State in the country. lets order up some new cars and build some roads and bridges. Then when the bill comes do we will just say we cant pay it, and due to our fiscal crisis we will excercise our police powers to eliminate the debt without payment.
- Grandson of Man - Wednesday, Jan 22, 14 @ 1:18 pm:
“You are deluding yourself that the A/B plan was constitutional.”
Perhaps. I was just trying to put a positive spin on the bad news we’ve been getting. My pension reform plan of choice would have been debt reamortization, a stronger funding requirement and a progressive income tax, which would not violate the constitution. I didn’t get this stuff, but I will continue to support it.
“You are also deluding yourself that there is any legal pension reform that can achieve significant savings.”
We shall see.
“About all that is left legally is a Tier 3 that totally guts any pension or requires defined contribution for new hires, and then you will end up having to make Social Security contributions for all the members that are not currently in SS, which will be a net cost to the State.”
A very scary prospect and something I hope doesn’t happen. I don’t see it happening politically, but I could be wrong. I’ve been a fool for lesser things.
- fed up - Wednesday, Jan 22, 14 @ 1:48 pm:
Maybe Quinn will accept the Chicago casino with some video poker at Ohare and Midway, fracking money will begin to flow soon, New York was able to write a legal internet sales tax bill.Maybe Madigan & Cullerton should read it. Madigan will still refuse any cuts like combining State treasurer and Comptroller office just because.( yes, it doesnt save much but should be done.) Finally fix the workers comp BS in this state so buisness will expand.
- lakecounty - Wednesday, Jan 22, 14 @ 9:05 pm:
- Grandson of Man - Wednesday, Jan 22, 14 @ 10:09 am:
If there is any good news, it’s that pension reform will help pay down the pension liability.
Huh, how is not paying what you promised helping pay down the pension liability?