* From the governor’s presentation to potential buyers of the state’s new bonds…

The State’s Credit Fundamentals are Improving

* Together with the 2017D Bonds, the 2017ABC Bonds will pay off approximately $6.0 billion of outstanding bills and is expected to result in the receipt of additional federal funds

* By the end of fiscal year 2018, the bill backlog is expected to be approximately $7.5 billion, a nearly 50% reduction

Recent Developments

* Passage of fiscal year 2018 Budget
* Permanent increase in personal income tax and corporate income tax rates to 4.95% and 7.00% respectively
* Passage of Tier 3 Pension Plan and funding changes
* Passage of Senate Bill 1947 (PA 100-465), which provided for an evidence-based method of allocating funding among the state’s school districts
* Reauthorization of EDGE Tax Credits to improve the State’s competitiveness for major economic development projects
* Reduced risk to swap counterparties by renegotiating rating triggers […]

The State’s base spending commitments are expected to exceed forecasted revenues by approximately $1.5 billion

Notice how they skate over that budget “passage” thingy without mentioning the veto and how they point out the tax hike the governor vetoed improves fiscal stability.

The governor’s budget director is listed as one of the authors.

* From the budget office’s five-year forecast…

The Governor cited an unbalanced budget at the time of the veto and did not support passage of a state budget that raised taxes without spending controls and structural governmental, economic and fiscal reforms.

The Governor’s Office of Management and Budget (GOMB) estimates a $1.7 billion general funds structural deficit.

Without changes to the current trajectory of the state’s finances, the projected deficit for fiscal year 2019 is $2.15 billion and the bill backlog could grow to an estimated $13.7 billion by the end of fiscal year 2023.

So, the deficit in the bond document is $1.5 billion, but the deficit in the GOMB document is $1.7 billion. Then again, that latter deficit is based solely on the budget as passed and revenues as currently projected. The governor wants to cut a couple hundred million in spending on his own.

* Back to the bond statement…

Illinois Remains the Economic Powerhouse of the Midwest and Continues to Grow […]

Illinois’ Economic Growth is Driven by a Large, Highly Educated Population and Diverse Employment Mix

The document points out our rising per capita income, rising GDP and declining unemployment rates.

* Budget office…

As has been the case for many years, Illinois’ economic growth continues to lag the nation, a condition that is expected to continue throughout the five-year forecast horizon absent reforms. U.S. real GDP grew 1.5 percent in 2016 while Illinois’ real GDP grew just 0.9 percent. The recovery of employment in Illinois since the recession has also lagged behind the nation. The U.S. experienced a 1.18 percent growth in total nonfarm employment from August 2016 to August 201715 while Illinois’ total nonfarm employment contracted by 0.57 percent.

[Hat tip: Mackey]