'Illinois is still in a bad place,' UI economist reports

'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.

Comments

News-Gazette.com embraces discussion of both community and world issues. We welcome you to contribute your ideas, opinions and comments, but we ask that you avoid personal attacks, vulgarity and hate speech. We reserve the right to remove any comment at our discretion, and we will block repeat offenders' accounts. To post comments, you must first be a registered user, and your username will appear with any comment you post. Happy posting.

Login or register to post comments

billbtri5 wrote on January 24, 2014 at 9:01 am

I get a kick of the phrase "pension reform"  as what it really means is previous administrations took a Pension Holiday to blow the money on other Important Programs and now that the Time Value of Money Concept has caught up to them the individuals who worked all those years in anticipation of promised benefits should take less...

Wisconsin's Governor just announced a budget surplus that will result in decreased taxes for it's citizens...when will Illinois be in that position?....

Sid Saltfork wrote on January 24, 2014 at 1:01 pm

Your right.  Sadly, they will come back for more.  "Pension reform did not go far enough..." has already been heard from one of the GOP gubernatorial candidates.  One of the candidates managed the pension fund investments of all of the state pension systems; and now he wants to be governor.  Wonder why?  Maybe, it is the bondholders wanting to make sure that they are first in line.  It will come back to the old "stealing more from the retirees, or services will be cut" line.  At the same time, the new Build Illinois program will be launched providing pork barrel projects, and campaign donations.  The spending will not stop regardless of whether the governor is a republican, or democrat.  Expect stealing more from the pension systems, higher property taxes, less services to the citizens, less money for education, less money for the infrastructure downstate, more money in campaign donations for more campaign ads, and a temporary income tax become a permanent tax.  Of course, all of this will be blamed on the employees, and retirees who paid their pension contribution with every paycheck unlike their employer, the State of Illinois. The "I am a taxpayer" line will be heard instead of the rational "I am a responsible citizen of Illinois subject to it's debts."  Oppose state spending except on the most needed projects.  You might get your hiking trail; but later the cost to all including you will multiply.  Illinois has to prioritize "needs" rather than "wants".