The state of Illinois released its Comprehensive Annual Financial Report (CAFR) for the 2017 fiscal year this month showing the state's net worth, or "total primary government net position," has plummeted to a negative $137 billion.
Illinois lost $9.9 billion in 2017, the report says. For some perspective, the state's annual income is around $39 billion, which means it hemorrhaged about one-quarter of its earnings last year. The state's declining net worth has increased sevenfold since 2008.
"Our state’s debt is a very serious problem, but please understand it is easy to make significant changes in those numbers by changing assumptions," Sen. Jim Oberweis (R-Sugar Grove) told The DuPage Policy Journal. "For example, a change in the life expectancy of future retirees or a change in the expected returns on pension assets can significantly change the unfunded pension liability (which is out of control under any reasonable assumptions). But Illinois has great assets that most other states do not have."
Oberweis cited the state's rich agricultural lands, the high-quality university system and transportation hub as examples of what Illinois has to offer.
"If we could just get the politicians to stop screwing up the state with anti-business legislation and more taxes, Illinois would grow and prosper," Oberweis said.
It's not just the state government which is losing money, however. The city of Chicago, Cook County and the Chicago Public Schools have all followed the same 10-year decline as the state. Currently, Chicago has a lower net worth than Illinois itself.
Some skeptics will point to the recent stock market gains as a way for Illinois to recoup its lost value. But, unfunded pension liabilities are part of what is weighing the state down. In 2017, state pensions gained an unprecedented 15 percent, but the number of pensions still unfunded caused the state to lose money.
"Obviously a truly balanced budget would help a great deal because it would include payments to gradually pay back the unfunded pension liabilities, thus reducing our overall debt," Oberweis said.
To many, the recent revelations from the CAFR show how little government budgets matter. During the past 10 years, Illinois' budgets have been "balanced" according to state accounting practices.
"If we would cut our spending back to the levels of five or six years ago (when we had the same or more people) and if we would begin to make Illinois more business friendly, we could begin to significantly increase revenue through growth rather than through ever higher tax rates," Oberweis said. "We must stop driving people and jobs out of Illinois."
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