Illinois should aim to build up a now $1 billion rainy-day fund by more than $2 billion to manage through future economic crises, state Comptroller Susana Mendoza said in pressing for passage this fall of legislation that would funnel more revenue to the once-barren fund.
States on average hold reserves that would allow them to manage for 35 days. Illinois only this year tipped the scales over the $1 billion mark — reaching $1.039 billion — but that equates to just one week worth of operations, Mendoza said.
A target of $3.25 billion would still fall short of the 35-day mark, but Mendoza — whose office manages state bill, debt, and pension payments — said it would provide sufficient cushion to manage paying obligations during future economic downturns.
“Really, that money needs to be there in case of another economic collapse through no fault of our own,” Mendoza said during an address to the Chicago City Club Wednesday. That level would allow the office to reasonably manage bill payments. “I’m not going to feel comfortable until we are at about 7.5% in reserves.”
Comptroller Susana Mendoza told a crowd at The City Club of Chicago that Illinois has cut its backlog of unpaid bills from $16.7 billion in 2017 to just a fraction of that today. […]
She also bragged about Illinois’ rainy day fund.
“It’s about $1.039 billion as compared to the less than $60,000 that I inherited,” Mendoza said. “[But] even a billion-dollars sound like a lot, but that’s a week’s worth of reserves.”
By comparison, Wisconsin’s rainy day fund is nearly four billion-dollars.
