econintersect.com
       
  

FREE NEWSLETTER: Econintersect sends a nightly newsletter highlighting news events of the day, and providing a summary of new articles posted on the website. Econintersect will not sell or pass your email address to others per our privacy policy. You can cancel this subscription at any time by selecting the unsubscribing link in the footer of each email.



posted on 27 August 2016

The Illinois Budget Crisis In Context: A History Of Poor Fiscal Performance

from the Chicago Fed

-- this post authored by Thomas Walstrum

The state of Illinois is in the midst of a fiscal crisis. It went through the entire previous fiscal year (FY)1 without a budget and began the current fiscal year (in July) with a spending plan through only the end of the calendar year. Lawmakers cannot agree on how to solve Illinois's financial problems, which are substantial: They include a $5.5 billion operating deficit, $7.7 billion in unpaid bills, and an estimated $111 billion in unfunded pension liabilities. The crisis has also led credit rating agencies to give Illinois the lowest ratings of any state - which has pushed up borrowing costs.

How did Illinois get to this point? To address this question, I compare Illinois's expenditure and revenue performance since the late 1980s with that of other U.S. states. I show that Illinois used to be a relatively low-expenditure, low-revenue state. However, unlike the spending of the typical U.S. state, starting in the mid-1990s, Illinois's spending consistently outpaced its revenues (which have stayed low). In particular, the accumulation of pension liabilities has become a major source of Illinois's fiscal problems.

There are a number of challenges in making a valid comparison of the fiscal situation in Illinois with that in other states. First, each state's budget makes different distinctions between activities funded through its general fund and activities funded through special funds. Second, each state divides responsibilities for its activities differently between state and local governments. For example, some states fund K - 12 schools primarily through state revenues, while others fund them primarily through local revenues. Third, states vary in population and income per capita.

[click on image below to continue reading]

Source: https://chicagofed.org/~/media/publications/chicago-fed-letter/2016/cfl365-pdf.pdf?la=en

>>>>> Scroll down to view and make comments <<<<<<

Click here for Historical News Post Listing










Make a Comment

Econintersect wants your comments, data and opinion on the articles posted.  As the internet is a "war zone" of trolls, hackers and spammers - Econintersect must balance its defences against ease of commenting.  We have joined with Livefyre to manage our comment streams.

To comment, using Livefyre just click the "Sign In" button at the top-left corner of the comment box below. You can create a commenting account using your favorite social network such as Twitter, Facebook, Google+, LinkedIn or Open ID - or open a Livefyre account using your email address.



You can also comment using Facebook directly using he comment block below.





Econintersect Contributors


search_box

Print this page or create a PDF file of this page
Print Friendly and PDF


The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.


Take a look at what is going on inside of Econintersect.com
Main Home
Analysis Blog
Energy and Falling Productivity
Reinhard Selten: Pioneering Analyst of Rationality and Human Behaviour
News Blog
Aging Populations May Mean Lower Economic Growth
Urban Rebound Causes Large Shift In Lower Credit Borrowers To Seek The Outer Suburbs
Infographic Of The Day: How Oil Is Formed
Early Headlines: Japan Needs Fed Hike, Mexico Tanker Ablaze, 1.5C Limit Within 10 Yrs, Africa's Growth Problems, Did US Destroy Syria Truce?, Merkel: No Help For DB And More
Americans Wary Of Drone Delivery
Britain's Wealthiest Households
What Next In The South China Sea
The Dollar - Gold Relationship
Almost Half Of Rape Cases End Without A Conviction
People With 'Obesity Gene' Can Still Lose Weight
The World's Most Generous Countries In 2016
What We Read Today 24 September 2016
Is The Butterfly Effect Real
Investing Blog
The Week Ahead: How Will Election News Impact The Market?
How To Protect Your Money Against Negative Interest Rates
Opinion Blog
There's No Wall Between The Fed And Banco De Mexico
The Setting Sun: Japan Faces Monetary Exhaustion
Precious Metals Blog
War On Cash Turns To $20, $50, And $100 Bills
Live Markets
23Sep2016 Market Close: US Indexes Close Lower As Crude Prices Slip, Fed Lowers Economic Growth Prospects, Indicators Melting Into Bearish Territory
Amazon Books & More






.... and keep up with economic news using our dynamic economic newspapers with the largest international coverage on the internet
Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government



Crowdfunding ....






























 navigate econintersect.com

Blogs

Analysis Blog
News Blog
Investing Blog
Opinion Blog
Precious Metals Blog
Markets Blog
Video of the Day
Weather

Newspapers

Asia / Pacific
Europe
Middle East / Africa
Americas
USA Government
     

RSS Feeds / Social Media

Combined Econintersect Feed
Google+
Facebook
Twitter
Digg

Free Newsletter

Marketplace - Books & More

Economic Forecast

Content Contribution

Contact

About

  Top Economics Site

Investing.com Contributor TalkMarkets Contributor Finance Blogs Free PageRank Checker Active Search Results Google+

This Web Page by Steven Hansen ---- Copyright 2010 - 2016 Econintersect LLC - all rights reserved