* We got caught up in politics yesterday and I didn’t get around to this story. Sorry about that. Greg Hinz has a solid take on the state comptroller’s Comprehensive Annual Financial Report…
Illinois’ net cumulative deficit for “governmental activities” — a broad measure of obligations the state has accrued, relative to resources it has to pay bills — rose an additional $1.2 billion in the fiscal year ended June 30, to $47.8 billion. The overall figure is nearly triple what it was just seven years ago, though the annual increase was the smallest it’s been since at least fiscal 2006.
“Governmental activities” includes almost all the programs and spending normally run by state government, from prisons and education aid to Medicaid and highway construction. Some, though not all, pension obligations are included. Excluded are self-contained business activities, including the unemployment insurance trust fund, the college tuition assistance program and the Illinois Lottery. […]
In his analysis, [Auditor General Bill Holland] reported that the net deficit for governmental activities has steadily risen from $18.7 billion in fiscal 2006 to $47.8 billion in fiscal 2013. Only one other state, Massachusetts, has a negative net position in the governmental activities account, he reported. Even other Midwestern states such as Michigan and Ohio are in the black.
Illinois is doing somewhat better by a narrower measure, the net balance in its general (or operating) funds, Mr. Holland found. It improved from a negative $9.1 billion in fiscal 2012 to “only” negative $7.3 billion in fiscal 2013, the lowest since the 2009 recession.
But the good news is limited, Mr. Holland conceded. “The deterioration is slowing,” he said. Ending the deficit entirely is going “slowly — very, very slowly.”
The CAFR is here. The Auditor General’s analysis is here.
Interest payments on Illinois’ late bills cost the state $318 million last year – enough to cover the annual budget of the Illinois State Police, according to a published report.
The state auditor’s overview of Illinois’ finances shows interest payments from fiscal year 2013 were more than double what was paid in the previous year when the figure was $136 million, according to a report by the Springfield bureau of Lee Enterprises newspapers.
The state’s interest on unpaid bills was $91 million in 2011, $97 million in 2010 and $36.9 million in 2009.
Brad Hahn, a spokesman for Illinois Comptroller Judy Baar Topinka, said this year’s interest payments should be much lower because the state has been “aggressive” about working to reduce the backlog of unpaid bills.
An Illinois State Board of Education report released Wednesday shows more Illinois schools are in poor financial shape and borrowing money or dipping into reserves than previous years, a problem that could worsen as the state faces overall budget cuts next year.
The annual review, which places school districts into four categories ranging from high financial strength to high risk, shows an overall downgrade in the financial position of the state’s districts. About 120 of Illinois’ 862 districts are in the two categories that indicate higher risk — an increase of nine from last year. And the problems are only expected to get worse as about 60 percent of school districts forecast they’ll have a deficit in the 2014 fiscal year, an increase of more than 10 percent the previous year.
State education officials say the state has underfunded education for the past three years, causing the overall downgrade in financial strength.
* Not to mention this mess…
Proposed state rules designed to crack down on sales tax havens are running into heavy fire from key business and tax policy groups — a possible sign that the highly contentious issue is headed back to the Illinois General Assembly.
Both the Illinois Retail Merchants Association and the Taxpayers Federation of Illinois told me that proposed rules issued in the wake of the state Supreme Court’s Hartney decision are still too vague on who owes how much and where.
I hear that a third influential group, the Illinois State Chamber of Commerce, also is prepared to ask for major revisions at a public hearing scheduled next week in Springfield.
The proposed rules were issued by the Illinois Department of Revenue after the high court on Nov. 21 tossed out old rules that the state and agencies such as the Regional Transportation Authority charged had been exploited by firms that established “order acceptance centers” in low-tax jurisdictions including Kankakee and Channahon to avoid paying higher taxes on goods that ended up in Chicago and its metropolitan area.
Taken together, it’s almost too much to fathom.