CHICAGO, Aug 29 (Reuters) - Illinois ended fiscal 2018 with a $7.8 billion general fund budget deficit, an improvement of nearly 50% from the state’s record $14.6 billion gap in fiscal 2017, according to a tardy annual financial report released on Thursday by the Illinois Auditor General.
The deficit, as measured on a generally accepted accounting principles (GAAP) basis, was the smallest for Illinois since a $6.9 billion gap in fiscal 2015 as spending continued to outpace revenue in the sixth-largest state.
State Comptroller Susana Mendoza attributed the improvement mostly to proceeds from the 2017 sale of $6 billion of general obligation bonds that were used to shrink an unpaid bill backlog, which had ballooned to a record $16.67 billion as a result of a budget impasse. The state’s bill pile totaled an estimated $6.44 billion on Thursday.
Illinois’ deep financial woes, including a $133.5 billion unfunded pension liability, have left it with the lowest credit ratings and highest borrowing costs among U.S. states.
The comprehensive annual financial report for the fiscal year that ended June 30, 2018, showed a deficit on a budgetary basis for a 17th straight year, narrowing to nearly $5.7 billion compared with $7.9 billion in fiscal 2017.
On a total assets versus total liabilities basis, Illinois no longer fared the worst among states. Illinois ended fiscal 2018 at -$189.1 billion versus New Jersey’s -$201.2 billion, according to the auditor’s report.
The audit came out 14 months after the fiscal year ended, making Illinois the last state to put out audited statements for fiscal 2018, according to Merritt Research Services, a municipal bond data provider.
Mendoza said the delay was primarily due to efforts to piece together data that had been lost by a vendor hired by former Governor Bruce Rauner’s administration. Emily Bittner, a spokeswoman for Governor J.B. Pritzker, who took office in January, said the new administration “is committed to working with all parties to ensure more timely releases in the future.”
To help address Illinois’ fiscal challenges, the Democratic governor has his hopes pinned on a state constitutional amendment on the November 2020 ballot. The measure would replace Illinois’ current flat income tax rate with graduated rates as a way to raise about $3.4 billion in new revenue annually. (Reporting by Karen Pierog in Chicago Editing by Matthew Lewis)