(The Center Square) – Illinois’ Comptroller Susana Mendoza is pushing House Bill 4118, a measure to make sure the state’s rainy-day fund has enough cash in it to help during the next crisis.
State Rep. Michael Halpin, D-Rock Island, filed the bill earlier this summer. It would implement monthly transfers into the Budget Stabilization Fund and Pension Stabilization Fund whenever the bill backlog is less than $3 billion and the state’s reserves are less than 5% of the general fund’s budget.
Adam Schuster, of the Illinois Policy Institute, said that a good rainy day fund has enough money into to help sustain government spending for about 30 days. Schuster said the state’s existing rainy day fund has enough money to run the state for about 30 seconds.
“Illinois does have a rainy day fund, by name only,” Schuster said. “Heading into the COVID-19 pandemic, Illinois only had enough in that account to run the state for 18 seconds.”
In 2020, the rainy day fund dipped to $60,000, less than a single state household’s average income and enough to run the state for for 30 seconds. In 2021, Mendoza said the fund increased to $9.3 million, but does not compare to the $42 billion annual budget lawmakers approved for 2022.
Part of the problem Illinois faces, Schuster said, is that the state continues to take money from the rainy day account, forcing the state to borrow from the federal government in times of need.
“Illinois has had a rainy day fund since 2006, but we have taken money out of it almost as much as we put money into it,” Schuster said.
Since the rainy day fund was so low, Illinois was the only state during the pandemic to borrow from the Federal Reserve. Illinois borrowed twice for a total of $3.2 billion to keep services going during the pandemic.
Mendoza’s new plan creates an identical requirement to make a $200 million payment to the state’s pension stabilization fund when the state’s bill backlog drops below $3 billion.
If the bill passes, it will go into effect immediately.