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Federal Reserve Bank of Chicago
Chicago Fed Letter
The Illinois Budget Crisis in Context: A History of Poor Fiscal Performance
Thomas Walstrum

The author looks back at Illinois’s expenditure and revenue performance since the late 1980s to understand the sources of its current fiscal crisis. The article shows that compared with the national average, Illinois used to be a relatively low-expenditure, low-revenue state. This changed in the mid-1990s, when, unlike the typical U.S. state, Illinois began consistently spending more than it brought in. A major contributor to this budgetary imbalance was the accumulation of pension liabilities.

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Thomas Walstrum, "The Illinois Budget Crisis in Context: A History of Poor Fiscal Performance" , Federal Reserve Bank of Chicago, Chicago Fed Letter, number 365, 2016.
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Keywords: Illinois expenditures; fiscal crisis; fiscal policy
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