The latest investment into the state’s Budget Stabilization Fund, commonly known as the rainy day fund, saw its balance exceed $1 billion for the first time.
Comptroller Susana Mendoza announced the $180 million installment on Thursday, which brought the balance to $1.036 billion – or approximately enough funds to cover state operations for one week .
The status of the fund is a far cry from where it stood in February 2020 when $60,000 remained in reserves. This amount of funding would not last for 30 seconds.
As Mendoza said before the Illinois State Fair ribbon-cutting ceremony, progress is still needed to get to its goal of $3.25 billion or 7.5% of the state budget.
"We’re about a third of the way there, not fully there yet," she said. "But certainly a lot better."
Starting next year, $45 million will automatically go into the fund annually after approval by the Illinois General Assembly. This funding comes through recreational cannabis tax revenues, which would feed 10% of those revenues into the rainy day feed as legislators decided in 2019.
Gov. JB Pritzker joined the legislature with approving the latest appropriation in April as part of the $46 billion state budget, saying expanding that fund was a priority of his administration. The two-year state budget put $1 billion into the fund, $720 million coming this year and $280 million the next. These investments were the first in 18 years into the budget stabilization fund.
Like Mendoza, Pritzker said he would still like to see increased investment in the fund in the case of an emergency.
These investments in the fund do not come from federal stimuli such as the American Rescue Plan or CARES Act, the comptroller said, but rather due to better-than-expected state revenues. This also led to the $1.8 billion tax-relief plan- responsible for the ongoing gas and grocery taxes suspensions and school tax holiday.
What could add even more to the fund is passage of House Bill 4118, legislation sponsored by state Rep. Michael Halpin, D-Rock Island, and co-sponsored by several fellow Democrats. HB 4118 would send $200 million into the fund at the end of each fiscal year or whatever is necessary to ensure the rainy day fund is 5% of the state budget.
Mendoza and Halpin addressed the House Revenue and Finance Committee in March regarding the bill, when the committee took no action. The comptroller wants the legislature to take it back up during the upcoming veto session in November.
So far, that legislation only has Democratic support but Mendoza believes some Republicans could back the bill.
Local Republican legislators Sen. Steve McClure of Jacksonville and Rep. Tim Butler of Springfield did not respond to requests for comment as of press time on Friday.
Now past the budget impasse of 2015 to 2017, the state has earned six credit upgrades from the rating agencies since June 2021, which Mendoza says is indicative of fiscal health.
According to an analysis from the Pew Charitable Trusts released in May, Illinois trailed nearly every other state in 2021 when it had enough rainy day funds to last 0.04 days. Only Washington had less time that year. It had a negative balance.
Contact Patrick Keck : 312-549-9340, firstname.lastname@example.org, or on Twitter @pkeckreporter
via The State Journal-Register https://www.sj-r.com
August 15, 2022 at 09:18AM