'Illinois is still in a bad place,' UI economist reports
CHICAGO — In an appearance before the University of Illinois Board of Trustees on Thursday, a UI economist offered a gloomy forecast for the state.
Although unemployment nationally has steadily declined, down to 7 percent in November, the state unemployment rate remains around 8.7 percent, still 3 percentage points above 2008 levels.
"Illinois is still in a bad place," said Richard Dye of the UI's Institute of Government and Public Affairs.
There's been some improvement, but that's because the labor force is shrinking as people give up looking for jobs, he said.
A recent Moody's report on employment prospects for 2014 shows Illinois "dead last" among the 50 states, he said.
Dye also said the state needs to do something besides pension reform to tackle its growing deficits.
The IGPA released a report this week saying that, while the reform would eventually eliminate the public pension system's unfunded liability, it would make only a small dent in the state's growing deficits.
The state deficit would increase to $13 billion by 2025, about $1 billion less than if the reforms weren't enacted, the report said.
"It's a partial fix," Dye said.
Keeping higher income tax rates in place after January 2015, when they're set to expire, would help, trimming the deficit to roughly $6 billion in 2025, he said.
"The state still has a sizable gap going forward," Dye said.
In his update on the university's financial condition, UI Chief Financial Officer Walter Knorr said the state has paid the UI all of its fiscal year 2013 appropriation.
It also has received the $28.8 million in MAP (monetary award program) payments from the state for the current year. MAP is the state's financial assistance program for low-income college students.
After receiving a payment from the state Thursday, the UI is owed $386 million (on its $663 million total appropriation for the current fiscal year), according to Knorr.
At this time last year, the state owed the university almost $500 million, he said.