Saving for emergencies: Illinois rainy day fund hits $2 billion

SPRINGFIELD, Ill. (WAND) — Heading into the holiday season, Illinois Comptroller Susana Mendoza is thankful the state now has $2 billion in the rainy day fund. Mendoza stressed this is a historic milestone just years after so many struggled throughout the two-year budget impasse.

The comptroller's office deposited $11.5 million into the rainy day fund Monday to bump the reserve to $2 billion. While that may seem like a large amount of money for a family budget, $2 billion could only run the state government for roughly 15 days.

Yet, that is a massive improvement compared to the 2017 rainy day fund of $48,000. Mendoza's office noted that $48,000 would last less than 30 seconds.

"Even though we've had a reserve account for over 23 years, this is the state's first time that we've reached a $2 billion threshold," said Assistant Comptroller Kevin Schoeben. "That is so important to our providers and state vendors alike."

Schoeben says the rainy day fund is critical to pay healthcare, pharmacy and nursing home bills during times of economic downturn like the budget impasse and COVID-19 pandemic.

Nearly half of all states have at least 50 days of funding in reserve. Mendoza is advocating for a plan for automatic payments to the fund instead of relying on special earmarks in the state budget.

"She's proposing legislation that would bring $230 million into both the rainy day fund and the pension stabilization fund so that on the days that we can afford it we can earmark that money for the rainy day fund and the pension fund as well," Schoeben explained.

The legislation gained bipartisan support this spring, but the plan was kicked back to the House Rules Committee in March. Mendoza and Schoeben hope to see lawmakers move the plan out of both chambers during the 2024 session.

Schoeben noted that the change could be another great way for the state to show fiscal responsibility following Illinois' ninth credit rating upgrade.

"All the credit agencies have said having an adequate reserve is essential to their credit worthiness here in the state of Illinois," Schoeben said.

The comptroller said a healthy rainy day fund and reduced pension shortfall bring the sound financial base to get Illinois ready for a growth spurt.

"It takes self-discipline and real legislative will to build up a rainy day fund instead of spending money on short-term needs," Mendoza said.