Welcome to Botswana

The state can’t pay its bills in the here and now: it started the 2013 fiscal year with almost $8 billion in unpaid bills, equal to almost one quarter of the state’s budget.

Illinois depends on federal aid to stagger through the year. In 2011 federal transfers accounted for more than one third of the state’s revenue. Now assistance from Washington is dwindling.

The costs of retirement benefits to Illinois’s retirees are rising faster than state revenue—meaning that even as the Illinois economy recovers from the recession, the state’s income is falling further and further behind its commitments.

Indeed, Illinois faces the worst pension shortfall of any state. The cost of pensions and health benefits to retired state employees has doubled over the past decade, to 15 percent of state spending. As the costs of benefits rise, the state is cutting budgets for schools, Medicaid, and corrections.