State’s ‘rainy day’ fund hits record-high balance ahead of new fiscal year
By HANNAH MEISEL
Capitol News Illinois
There are no champagne toasts or fireworks, but when the clock strikes 12 a.m. on Saturday, it’s the start of a new year in Illinois – a new fiscal year, that is.
And just as a new year is a time to contemplate recent accomplishments and make resolutions for the future, Illinois Comptroller Susana Mendoza is ringing in fiscal year 2024 by celebrating a record-high $1.94 billion in Illinois’ “rainy day” fund and setting her sights on doubling that figure in the next decade.
“$2 billion sounds like a lot of money, certainly in contrast to $48,000,” Mendoza said in an interview Friday, citing one of her most frequently repeated stories about the fund’s balance in August 2018 – when the state was still recovering from a two-year budget impasse between Republican Gov. Bruce Rauner and Democrats in the General Assembly.
The paltry sum would have only funded state government operations for 30 seconds, Mendoza estimates.
In contrast, nearly $2 billion “gives us about 10 days’ worth of operating reserves for our state,” she said.
But despite achieving that high-water mark – and celebrating Illinois’ eight recent credit ratings upgrades from the three major finance agencies that determine public and private creditworthiness – Mendoza joked that it’s her job to be the “party pooper” or “Debbie Downer” of state government.
“The majority of states in our country have about 40 days’ or more worth of reserves for their state operation,” she said. “So we’re doing great, but we have a far path yet to trek through.”
While Mendoza would love to someday get Illinois to the same roughly 40 days of reserves that 26 states have socked away, she’d settle for 20 – which would be roughly 8 percent of Illinois’ operating budget for a given year. She said that’s what the major credit ratings agencies have advised if Illinois is to receive future credit upgrades.
Mendoza has been pushing legislation to mandate that lawmakers put more into the state’s rainy day and pension stabilization funds during strong fiscal years, but it has never received a vote in either chamber of the General Assembly despite clearing a House committee unanimously. The comptroller said she plans to reintroduce the bill through her allies in the General Assembly.
“There is no good reason to not move forward with this legislation,” Mendoza said, adding that credit ratings agencies haven’t forgotten about Illinois’ reputation of not “being a good fiscal steward year after year after year.”
She boasted that Democratic leadership – including her, Gov. JB Pritzker and the Democratically controlled General Assembly – has helped right Illinois’ fiscal ship in the last several years.
“However, governors change. Legislatures change,” she said. “This is the time to do it. I don’t see any good reason to, to delay it any further.”
Mendoza said lawmakers should be able to increase the rainy day fund’s balance to 8 percent of Illinois’ budget in the next 10 to 15 years regardless of whether her bill requiring greater contributions becomes law.
From there, she said, Illinois should focus on paying down its unfunded pension liabilities, which stood at $139.7 billion at the end of Fiscal Year 2022. The most current figure will be made public in the coming months.
Unfunded pension liabilities would never come due at the same time; pension payments are doled out monthly when state workers retire, while the state pays into its five pension systems twice per year.
Mendoza rejected the “crisis” label often ascribed to the pension issue, but she said it’s not a problem to be ignored.
Paying more into the pension systems now will negate the piling up of interest costs in the future, reducing the crowding out of services that money could otherwise be used to fund, she said. Mendoza pointed to the $700 million above the minimum required amount that the state has paid into its pension systems in recent fiscal years, which she said will save Illinois “about $2.4 billion on the back end.”
“And the more we do that, the quicker we’re going to get out of this hole,” she said.
That’s why Mendoza said her proposed legislation targets the pension stabilization fund as well as the rainy day fund.
“It’s not sexy,” she said. “There’s no ribbon cutting with saving money, but I think it’s the best and most incredible use of taxpayer dollars to actually protect our budgets…the moral document that we’re going to live off of that year.”
Mendoza earlier this year had advised Pritzker and lawmakers to not start any new state programs in the coming year’s budget. But she said she was happy with this year’s budget “for the most part,” despite new spending in areas like child care, pre-K programs and higher education.
“All of those spending initiatives, which are big ticket items, are all going to produce a good return on investment for taxpayers,” she said.
Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of print and broadcast outlets statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.
Indiana Wesleyan scrapes by Saint Xavier after missed 2-pt conversion
Spread the loveBy Mike Walsh Correspondent Life is about choices. Sometimes, the result is to our benefit; sometimes it is not. In Saint Xavier’s loss to visiting Indiana Wesleyan on Sept. 16 at George R. Deaton Field in Mount Greenwood, head coach Mike Feminis was presented with an important decision to make with his team…
High School Football Wrap: Week 4 | St. Laurence has Ball in win over Providence
Spread the loveBy Mike Walsh Correspondent Providence has won 10 state championships and finished runner-up four times, including last season in Class 4A. So how did St. Laurence’s student body celebrate the Vikings’ second-ever victory over the Celtics, 31-24, last Friday night in Burbank? With an old-fashioned field-storming. St. Laurence senior Aaron Ball scored the…
Sandburg shreds Lockport defense, block last-second FG attempt to secure win
Spread the loveBy Randy Whalen Correspondent Anthony Shelton burst on the scene a year ago in a big Sandburg win over Lockport. The Eagles junior last week solidified himself as a top quarterback in the South Suburbs with another win over the Porters. Shelton threw for 300 yards and a pair of touchdown passes as Sandburg…
Chicago Bears honor Stagg’s Nero, Gilmore
Spread the loveBy Mike Walsh Correspondent The Chicago Bears named Stagg head football coach Colt Nero and Chargers senior Lebarion Gilmore as the Chicago Bears Coach of the Week and the Chicago Bears High School All-Star for Week 3 of the 2023 season. The honors came after Stagg defeated visiting Belleville West 24-0 in a…
Richards downs Oak Lawn in crosstown clash
Spread the loveBy Xavier Sanchez Correspondent Merriam Webster defines a rivalry as “one of two or more striving to reach or obtain something that only one can possess.” In sports, that makes both sides of any competition rivals, but the term is often reserved for a special matchup, of sorts. One of those is Oak…
Man dies in Markham shootout after robbing Summit phone store
Spread the loveBy Carol McGowan The man who robbed an AT&T store in Summit on Thursday morning was later found dead in a house in Markham after shots were exchanged between the man and police. The incident started when a man – identified as Jeremy Kelly, 28, of Markham – robbed the AT&T store at…
26 hurt in Bedford Park tent collapse
Spread the loveFrom staff reports More than two dozen people at an event in Bedford Park last week were injured when the tent they were meeting in collapsed. Bedford Park Police said they responded to assist the Bedford Park Fire Department at 10:44 a.m. on Thursday, September 14, in the 5600 block of West 73rd…
Former McCook police chief pleads guilty to extortion
Spread the loveBy Bob Bong Mario DePasquale, former police chief of McCook pleaded guilty last week to conspiring with the village’s former mayor to extort two businessmen out of tens of thousands of dollars. DePasquale, 49, pleaded guilty to one count of conspiracy to commit extortion during a brief hearing before U.S. District Judge Elaine…
AERO opens new facility in Burbank
Spread the loveBy Bob Bong When Queen of Peace High School in Burbank announced it was closing in 2018, the good folks at AERO special education co-op saw a golden opportunity. They purchased the school’s 13-acre site at 7659 S. Linder Ave. in August 2019 for $3.2 million. The plan was to retrofit the high…
St. Gianna Fest (formerly Queen of Martyrs Fest) kicks off fall activities
Spread the loveBy Joe Boyle Fall begins this week but there is no shortage of activities occurring this month and next in Evergreen Park. Mayor Kelly Burke reminded residents during the Evergreen Park Village Board meeting Monday night that the St. Gianna Fest (formerly Queen of Martyrs Fest) Family Carnival will take place Friday, Sept. 22,…