Last Updated on March 1, 2024 by Asfa Rasheed
State debt refers to any debt owned by a government . Debt may include any financial obligations a state has that haven’t been paid, like bonds issued by state governments, money borrowed by a government that has not been repaid, or post-retirement benefits promised to state employees. consistent with the U.S. Bureau of the Census , Illinois had a debt of $64,221,381,000 in financial year 2015. The state debt per capita was $5,002. This ranked Illinois fifth among the states in debt and 11th in per capita debt. the entire state debt owned by the 50 states was $1.15 trillion with a per capita debt of $3,582.
It is important to notice that the below figures reflect various sources with different methodologies. The U.S. Bureau of the Census figures don’t include any debt owed by local governments within the states, debt owed by the federal , promised pension payments that have yet to be funded, or unemployment fund loans. Information on debt per capita wasn’t directly available from the U.S. Bureau of the Census , and was calculated using the census figures for state debt and population. State debt figures from the State Budget Solutions report below were calculated using data from the states’ 2012 comprehensive annual financial reports. To access the entire SBS report, including methodology details
Table of Contents
State debt
The tables below detail the debt figures in Illinois debt statistics compared to those of neighboring states.
U.S. Census Bureau
| Total fiscal year 2015 state debt, U.S. Census Bureau | ||||
|---|---|---|---|---|
| State | Total state debt | State debt per capita | State debt ranking | Per capita debt ranking |
| Illinois | $64,221,381,000 | $5,002 | 5 | 11 |
| Indiana | $22,463,710,000 | $3,397 | 15 | 21 |
| Missouri | $19,350,325,000 | $3,185 | 17 | 26 |
| Wisconsin | $22,086,615,000 | $3,829 | 16 | 17 |
| United States total | $1,149,926,081,000 | $3,582 | N/A | N/A |
Public pensions
The U.S. Bureau of the Census doesn’t include unfunded pension liabilities in its debt calculations. Others, including the State Budget Solutions report above, do take these figures under consideration . Between fiscal years 2012 and 2014, the funded ratio of Illinois’ state-administered pension plans increased from 40 percent to 41 percent. For financial year 2014 the pension system’s liability totaled $190,179 million.
Credit ratings
Credit rating agencies, like Standard and Poor’s, assign grades to states that take under consideration a state’s ability to pay debts and therefore the general health of the state’s economy. Generally speaking, a better credit rating indicates lower interest costs on the overall obligation bonds states sometimes sell to investors so as to finance large-scale undertakings (e.g., construction and other structure projects). This successively leads to lower interest costs, thereby lowering the value to taxpayers. A high state debt may cause credit rating agencies to predict that the state won’t be ready to pay its debt, then cause them to downgrade a state’s credit rating.
The table below lists the quality and Poor’s credit ratings for Illinois and surrounding states from 2004 to 2017. Standard and Poor’s grades range from AAA, the very best available, to BBB-, rock bottom
| State credit ratings, 2004 to 2017 | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| State | 2017 | 2016 | 2015 | 2014 | 2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 |
| Illinois | BBB- | BBB | A- | A- | A- | A | A+ | A+ | A+ | AA | AA | AA | AA | AA |
| Indiana | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AA+ | AA+ | AA | AA |
| Missouri | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA | AAA |
| Wisconsin | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA | AA- | AA- | AA- | AA- |
Studies
Truth in Accounting 2017 report
In a report released in September 2017 by the nonprofit Truth in Accounting (TIA), states were ranked by taxpayer burden, a term that reflects “the amount each taxpayer would need to send to their state’s treasury so as for the state to be debt-free” as of 2016. Illinois ranked 49th, with a taxpayer burden of $50,400.
To figure a state’s taxpayer burden or surplus, TIA checked out a state’s total reported assets minus capital assets and assets restricted by law (buildings, roads, land, etc.) to calculate “available assets,” which were then compared to the quantity of cash the state owes in bills, including retirement obligations like pension plans and healthcare benefits for retirees. If the difference between available assets and total bills was positive, TIA called this a taxpayer surplus; if it had been negative, this was a taxpayer burden. This amount was then divided by the amount of individual tax returns with a positive liabilities , thus expressing the entire state surplus or burden on a per-taxpayer basis.
The table below lists the taxpayer burder or taxpayer surplus in Illinois from 2009 to 2016. within the table below, negative figures represent a taxpayer burden, while positive figures represent a taxpayer surplus.
Noteworthy events
Illinois credit rating
On June 1, 2017, Stanford and Poor’s Global Inc. and Moody’s Investors Service, credit rating agencies, downgraded Illinois’ credit rating. S&P also said that it’d downgrade the state’s credit rating further if the state did not adopt a budget. The downgrade placed the state’s credit rating at one step above a junk rating (a low rating which indicates the state may be a high risk investment). At the time of the downgrade, the state had not passed a budget in two years thanks to disagreements between the Democratic state legislature and Republican Governor Bruce Rauner. consistent with S&P analyst Gabriel Petek, “the rating actions largely reflect the severe deterioration of Illinois’ fiscal condition, a byproduct of its stalemated budget negotiations, now approaching the beginning of a 3rd financial year .” before this downgrade, Illinois’ credit rating was rock bottom within the country. If downgraded again, Illinois would become the primary state to receive a junk rating from a credit agency.
On July 6, 2017, the Illinois General Assembly passed a $36 spending plan and $5 billion tax increase. The legislature overrode Rauner’s veto to pass the budget, which ended the two-year budget impasse. Moody’s Investors Service said they’ll downgrade Illinois’ rating despite the budget. On July 5, after the state Senate voted to override the veto, Moody’s wrote that, “so far, the plan appears to lack concrete measures which will materially improve Illinois’ long-term capacity to deal with its unfunded pension liabilities.” S&P, in response to the budget passing, removed the state from its credit await a possible downgrade.
On October 9, 2017, S&P maintained the state’s BBB- rating following the state’s decide to sell $6 billion fettered . The agency told the state that it still faces fiscal issues that would push the rating down further.
