Report: Illinois overspending taxpayer money year after year
(The Center Square) – A recent study sheds some light on Illinois’ history of overspending taxpayer money over the years.
An analysis by Pew Charitable Trusts shows that Illinois is one of only two states in the country with total tax revenue shortfalls exceeding 5% of total expenses, and the only ones with annual deficits in each of the past 15 years. The other state is New Jersey.
Pew state fiscal health manager Joanna Biernacka-Lievestro said Illinois is in select company.
“Nine states failed to collect enough revenue to cover their long-term expenses over the 15 years ending in fiscal 2020,” Biernacka-Lievestro said. “Secondly, Illinois was one of two states that struggled the most.”
After New Jersey, Illinois had the largest deficit with aggregate revenue able to cover only 93.9% of aggregate expenses. In comparison, Indiana and Iowa were both close to 104%. Alaska collected 103.5%, yielding the largest surplus.
The report looked at states’ balances year by year, and shortfalls mainly occurred during and immediately after the Great Recession, suggesting that most state’s fiscal challenges were temporary. A majority of states balanced their books as the country’s economic recovery took hold and have kept them balanced. Still, 15 states including Illinois in fiscal 2016 and 2017 failed to amass enough revenue to cover their annual expenses. That’s despite Illinois commonly ranked as among the highest taxed states in the country.
“Some states have an annual deficit here or there like for a recession or something like that, but then they get back in the clear,” Biernacka-Lievestro said. “Illinois unfortunately is recording annual deficits every year.”
The report notes all but one state, Montana, had one or more years in the red. But chronic shortfalls, as with Illinois and New Jersey each year since fiscal 2002, are one indication of a more serious structural deficit in which revenue will continue to fall short of spending absent policy changes.
