State Budget Practice Report Cards and Budget Resource Guide
Illinois was one of only two states—Kansas was the other—to receive average grades of D or below in budget maneuvers, legacy costs, and reserve funds for fiscal 2015 through 2019. Illinois posted D averages in budget maneuvers and reserve funds but a D-minus, the worst grade possible, in legacy costs, which includes public employee pensions and other postemployment benefits (OPEB), mainly health care. At 39 percent, Illinois’s pension funding ratio in 2019 was 32 percentage points below the total for all states and the lowest of the fifty. Illinois also failed to provide adequate OPEB funding. With a liability of $54.5 billion at the end of fiscal 2019, it delivers these benefits on a pay-as-you-go basis.
The state, which failed to enact a budget in 2016 and 2017, also consistently used one-time measures to pay for recurring operating expenditures. They included deferring payment of vendor bills to future years, issuing bonds to pay down the bill backlog, and including assumed proceeds from a planned asset sale as revenues. In reserve funds, their D average reflects deficits in general fund balances, minimal rainy day fund balances, and a failure to link reserves to revenue volatility.
The one bright spot for Illinois was its B in transparency. The grade was buoyed in 2019 by the disclosure, for the first time, of at least $25 billion in deferred infrastructure maintenance costs for buildings, universities, roads, bridges, and schools. Only four other states make similar disclosures.
To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.
The report cards found here contain grades of the state's budgetary practices during the fiscal years of 2015 through 2019. Each state received marks in five critical categories, based on their adherence to best practices in several key budgeting indicators. The five categories covered methods used to achieve budgetary balance as well as how budgets and other financial information are disclosed to the public.
States received grades of A to D-minus (there are no “failed states”) for their procedures in estimating revenues and expenditures; their use of one-time actions to balance budgets; how they oversee and use rainy day funds and other fiscal reserves; the adequacy of their funding of public worker retirement and other postemployment benefits; and the quality of transparency of budget and related financial information. The grades are based on research conducted by public finance and budgeting professors and students at eight US schools of public administration or policy. The universities’ research efforts were augmented by Volcker Alliance staff, data consultants at Municipal Market Analytics, and special project consultants Katherine Barrett and Richard Greene.
State Budget Sources
State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses is a resource published by the Volcker Alliance designed to help public officials, policy advocates, journalists, academics, and concerned citizens fully understand the critical fiscal decisions that governors and legislators must make. The guide includes the links below to budgets for this state as well as legislative analyses of budget bills and treasurers’ or comptrollers’ monthly state cash-flow statements; capital spending plans; reports on public-worker pension funding and returns; and reports by local and national fiscal research organizations, bond rating firms, and associations of state fiscal and finance officials.