Illinois rainy-day fund tops $2 billion for first time

Illinois’ rainy-day fund crossed the $2 billion threshold for the first time, following an $11.5 million deposit, the state comptroller’s office announced Monday.

The fund has grown in size in recent years and now, at $2.005 billion, has enough money to run the sixth largest state for about 15 days compared to 2017 when it had just $48,000, which was not enough to keep state operations going for half a minute, according to the announcement.

“Whatever you think Illinois’ most important program is — funding our schools, policing our highways, caring for the elderly — that program is in jeopardy when a crisis strikes if Illinois has not built up a strong reserve,” Illinois Comptroller Susana Mendoza said.

Illinois is still lagging half the states that have at least a 50-day reserve, it added.

She said House Bill 2515, which stalled in the legislature this year, will be reintroduced next year. The measure would set automatic triggers for regular deposits to the rainy-day fund.

Mendoza added that the heftier reserve contributed to Fitch Ratings’ recent upgrade of the state to A-minus from BBB-plus ahead of a Nov. 28 competitive sale of $875 million of general obligation bonds.

The upgrade completed Illinois’ return to the single-A category after Moody’s Investors Service and S&P Global Ratings boosted their ratings earlier this year. The state had teetered on the cusp of junk in the wake of a two-year budget impasse that ended in 2017.

Last week, Gov. J.B. Pritzker’s Office of Budget and Management released a five-year economic forecast that raised projected fiscal 2024 revenue by $1.4 billion amid strong corporate and sales tax collections, although the increase would be partially offset by about $1 billion in spending pressures that include costs related to asylum seekers.

While the current fiscal year is expected to end with a $422 million general funds surplus, deficits ranging from $891 million to $1.66 billion are forecast over the next five fiscal years.

The upcoming three-part GO bond deal includes $175 million of taxable bonds maturing between 2024 and 2028 with proceeds funding the state’s ongoing accelerated pension benefit program, according to the deal’s roadshow. The remaining $700 million of tax-exempt bonds are earmarked for capital spending and are due in $35 million increments between 2029 and 2048.