State Budget Practice Report Cards and Budget Resource Guide
Though Illinois regrouped after not being able to pass budgets in 2016 and 2017, enacting spending plans in the following years, the state continued to fare poorly in most budgetary categories evaluated by the Volcker Alliance.
For fiscal 2017 through 2019, Illinois received a D-minus average, the lowest possible grade, in budget maneuvers—the use of one-time revenues to achieve balance. For example, Illinois added to the 2019 budget $300 million in assumed proceeds from the proposed sale of the seventeen-story James R. Thompson Center, a state office building in Chicago. It included the same assumed sale and revenue figure in the 2018 budget, but a transaction never took place, leaving the state with a hole to fill. Illinois also continued its practice of deferring scheduled expenditures to balance budgets: As of October 2018, the state comptroller estimated a backlog of $7.2 billion in unpaid vendor bills.
With the states’ second-poorest-funded public worker pension system (only Kentucky’s is worse), Illinois received a D-minus average in legacy costs, which cover pensions and other postemployment benefits (OPEB), principally health care. In 2018, Illinois pensions were funded at only 39 percent of estimated obligations—31 percentage points below the total for all states.
In contrast to its basement-dwelling budget maneuvers and legacy costs grades, Illinois earned a B average in transparency. A main driver of the score was its inclusion in the 2019 budget and other documents of cost estimates of deferred infrastructure maintenance, which exceed $26 billion for state buildings, universities, roads, bridges, and local K–12 schools. Publication of the data helped Illinois score a top A annual grade for transparency in 2019. Only four other states—Alaska, California, Hawaii, and Tennessee—provide similar reports.
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 2017 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.