In what seems like a lifetime ago, state government finances across the nation were moving in divergent directions, with 28 states having replenished their fund balances above what they held before the onset of the recession in 2007. Meanwhile, states such as Pennsylvania and Illinois were dangerously low on fiscal reserves, with each state having less than a week of cash on hand.But then came the coronavirus.A graphic (’28 States Total Balances Surpass Pre-Recession Levels’) from a March 18, 2020 Pew Charitable Trusts report entitled “States’ Financial Reserves Hit Record Highs” shows the vast range in fiscal health among the states, with the average a state could operate without revenue being 48.1 days.Compounding some states’ weak financial position is their unfunded government worker pension obligations. In the case of Illinois, its 4.7 days’ fund balance is even more tenuous when considering its large government pension system obligations. According to the Stanford Institute for Economic Policy’s Pension Tracker, in 2017, the market value of Illinois per household government pension debt was $76,398, the fourth-highest in the nation after Alaska, California and Connecticut.Even in California, where leaders have touted the state’s fiscal surpluses, the underlying financial picture isn’t as rosy. Because California… Read full this story
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