http://www.businessweek.com/ap/2012-06-21/auditor-total-illinois-deficit-nears-44-billion

AP News

Auditor: Total Illinois deficit nears $44 billion


SPRINGFIELD, Ill. (AP) — Illinois' overall deficit climbed to nearly $44 billion last year, easily the worst in the nation, the state's auditor general reported Thursday.

The red ink grew by 16.8 percent in a single year, Auditor General William Holland said.

The new report includes all of Illinois' assets and liabilities and gives a broader picture of the state's financial condition than simply reviewing the annual budget — one of steady deterioration.

With no cash available, more state payments were late and for larger amounts, the audit found. Illinois ended the fiscal year with $4.7 billion in unpaid bills. The state fell further behind in paying tax refunds. Bookkeeping was slow and disorganized.

The deficit stood at $43.8 billion as of June 30, 2011, the auditor said. That's $10 billion more than the deficit of the next-highest state, New Jersey, and $33 billion higher than the deficit in California, another state that has been plagued by financial problems.

Illinois' situation may have improved a bit in the past year. Much of the money from a new income tax increase came in after the period examined in the report, and the governor and legislative leaders have approved measures to cut spending on Medicaid and retirement benefits.

Gov. Pat Quinn's office blamed the deficit on problems beyond his control.

"These unpaid bills are the result of decades of fiscal mismanagement as well as the economic downturn and diminished revenues," the official response said.

The audit looks at the 2011 fiscal year, which ran from July 1, 2010, to June 30, 2011.

Looking only at the state's main fund for routine government expenses, Illinois ended fiscal 2011 with a deficit of $8.1 billion, the audit found. That's 8 percent better than the year before.

The total deficit figure includes all state investments, bonds, special funds, pensions and more. It's roughly like calculating a family's net worth by looking at the value of its home, car, retirement fund and other things instead of just focusing on whether the weekly paycheck covers day-to-day expenses.

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Follow Christopher Wills at http://twitter.com/chrisbwills


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