Illinois has worst rainy-day fund in nation

Illinois has worst rainy-day fund in nation

Illinois has the worst rainy-day fund in the nation and has only enough cash to last for 15 days. It’s the only state that wouldn’t last a month.

Gov. J.B. Pritzker is only proposing directing an additional $170 million in 2025 to the state’s rainy-day fund – officially known as the Budget Stabilization Fund.

It’s not like the state is saving cash: the new 2025 budget comes with $2.3 billion in new spending. The small contribution will mean Illinois’ rainy-day fund balance will reach $2.3 billion – just more than 15 days of state spending under a $52.7 billion general funds budget. Total reserves will likely remain the lowest in the nation.

Every other state in the nation can last for more than a month – with most at two to three months – solely using their rainy-day funds.

Billions in federal pandemic aid and stronger-than-expected post-pandemic revenues allowed Illinois to build its rainy-day fund up from practically nothing in 2019.

Although it’s grown, the fund’s balance remains far too low. Illinois Comptroller Susana Mendoza’s own target of 7.5%, or $3.95 billion, would cover just over 27 days of state spending.

Experts with the Government Finance Officers Association recommend states keeping enough in reserve to run for 60 days.

That is $8.8 billion for Pritzker’s proposed 2025 fiscal year budget. In other words, Illinois needs to quadruple its rainy-day fund to have adequate savings on hand.

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