SPRINGFIELD, Ill. (WAND) — Economists are currently forecasting a 30% chance of a recession next year, but experts believe Illinois is in much better position to handle a financial disaster than it was during the Great Recession and COVID-19 recession.
Financial experts once described Illinois as ungovernable due to unbalanced budgets and no money in the rainy day fund. However, things have changed for the better.
"Illinois' fiscal stability has improved," said Frank Manzo, an economist with the Illinois Economic Policy Institute. "Its ability to combat a rise in unemployment has strengthened and its public investments are now more robust than at any point over the past two decades."
Illinois has seen nine credit rating upgrades since 2020 thanks to Gov. JB Pritzker and state lawmakers eliminating the massive bill backlog and General Fund deficit. The state also has more than $2 billion in the rainy day fund, which is nearly 700% more than the funding available during the Great Recession.
"Borrowing costs and interest rates go down when a state's credit rating improves," Manzo said. "That's good for taxpayers if we want to invest in the future in infrastructure and education."
A new ILEPI report showed state pension systems are currently at the highest funding ration since 2008. Lawmakers also worked throughout the COVID-19 pandemic to ensure the state's unemployment insurance trust fund reached $2 billion.
Manzo explained the economy also benefits from a recent law that allows employers to temporarily reduce hours instead of having massive layoffs.
"That keeps workers employed," Manzo said. "It keeps them on their health and retirement benefits, and it enables them to receive prorated unemployment benefits rather than being laid off and having a full unemployment check."
Manzo told WAND News that investments in K-12 and higher education helped reduce the number of school districts with financial deficits by 55% while increasing college grants by 77%.
The Rebuild Illinois program will also invest $41 billion in roads, bridges and other capital projects.
"Even if a recession occurred tomorrow, Illinois would still be investing billions of dollars every year in infrastructure improvements and that saves and creates good-paying construction jobs," Manzo said.
While economists believe Illinois is in much better shape to weather a recession, Manzo said the state should work on pension and tax reform to ensure stronger economic stability.
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