Comptroller Susana A. Mendoza deposited another $100 million into Illinois’ once-anemic Rainy Day fund, bringing the total to $854 million.
That’s important because it protects the programs Illinoisans rely on from their state – schools, caring for the elderly; investigating claims of child abuse; everything the state does. By the end of the summer, the fund will be at $1 billion.
“During the budget impasse when I first took office, the Rainy Day Fund had less than $60,000 – not enough to run state operations for 30 seconds,” Comptroller Mendoza said. “The bond rating agencies noted Illinois had the lowest Rainy Day Fund in the country.”
But now that Illinois is responsibly budgeting and prudently building up the Rainy Day fund, the rating agencies are noting that as they have given Illinois six rating upgrades in less than a year. Here is some of what they said about the importance of shoring up the Budget Stabilization Fund, also known as the Rainy Day Fund, to help Illinois over rough patches:
- S&P Global Ratings on May 6: “The upgrade reflects what we view as improvement in the state’s financial flexibility and monthly revenue reporting transparency, continued timely budget adoption and elimination of the bill backlog, as well as recent surplus revenues being used to promote what we view as longer-term financial stability … as well as a $312 million proposed contribution by fiscal year-end to the budget stabilization fund (BSF) that would increase the fund balance to more than $1 billion or 2.2% of the fiscal 2023 budget…”
- Fitch Ratings on May 5: “The upgrade to ‘BBB+’ reflects fundamental improvements in Illinois’ fiscal resilience including full unwinding of pandemic-era and certain pre-pandemic non-recurring fiscal measures, meaningful contributions to reserves … The 2022 revised and 2023 enacted budgets also deposit just over $1 billion into the state’s budget stabilization fund (BSF), which had been essentially zeroed out since fiscal 2017.”
Comptroller Mendoza worked with Rep. Michael Halpin, D-Rock Island, and Sen. Elgie Sims, D-Chicago, to introduce House Bill 4118 that would require automatic payments into the Rainy Day Fund and the Pension Stabilization Fund. In addition to this year’s infusions that will bring the fund to $1 billion by the end of the summer, the budget mandates $45 million a year for the Rainy Day Fund, starting in Fiscal Year 2024.
“That’s a good start, but we have a long way to go to get the Rainy Day Fund to where the experts say it needs to be.” Comptroller Mendoza said. “I will be asking the General Assembly to take up HB 4118 again to require larger annual contributions to both the Rainy Day Fund and the Pension Stabilization Fund going forward.”