A leading voice for bringing fiscal stability to Illinois

State Finance


Statement of the Civic Committee of the Commercial Club of Chicago Regarding the Recent Credit Upgrade from S&P

On behalf of the Civic Committee of the Commercial Club of Chicago, we salute the State of Illinois for the most recent credit upgrade from S&P Global Ratings. For the first time since 2016, the state’s new credit rating is an A-. While this new rating still puts Illinois among the lowest in the country, it represents meaningful progress towards the level of financial stability we recently called for in our report, Securing Illinois’ Future: Stabilizing State Finances to Promote Long-Term Growth. We encourage state lawmakers to continue along this path by developing a comprehensive financial plan to solve the State’s financial issues and achieve an AA credit rating in five years, on par with 80 percent of the states in the country. We look forward to working with State leadership to achieve these important objectives.  

Securing Illinois’ Future: Stabilizing State Finances to Promote Long-Term Growth

The Civic Committee has released a new report on Illinois’ finances, Securing Illinois’ Future: Stabilizing State Finances to Promote Long-Term Growth. This report outlines the need to achieve long-term financial stability and strength, and the importance of building on the State’s recent positive momentum to fully address its fiscal problems. 

The report centers on three core pillars that are critical to secure Illinois’ finances and are the foundation on which potential policy actions should be evaluated: 

Pillar #1 – Plan: The State Should develop a comprehensive financial plan for addressing its fiscal challenges. 

Pillar #2 – Credit Rating: The focus of actions to be implemented should be designed to achieve an AA credit rating in 5 years. A critical element of achieving an AA credit rating is to implement a new credible funding plan to address the unfunded pension liabilities of the State. 

Pillar #3 – Financial Sustainability: The State should ensure that structural annual budget deficits are eliminated in the foreseeable future. 

If the State achieves the Three Pillars, we believe it will promote long-term economic growth, which will benefit all who live and work in Illinois. Parents will not have to worry that education funding will be sacrificed to pay for legacy obligations, residents will be assured the State has the resources to pay for critical services they rely on, and pensioners will not have to worry whether their retirement payments are secure. 

Why We’re Involved

The State’s fiscal challenges were not created overnight. They resulted from decades of poor fiscal decisions, including enacting a 50-year pension payment ramp that underfunded the pension system for decades, pension holidays, annual budget deficits, and accumulating billions in unpaid bills. However, the State has demonstrated improved financial discipline in recent years, contributing to the State’s rainy day fund, making additional pension payments, and prioritizing the repayment of debt.  

The State is in the best fiscal position it has been in for decades. The Civic Committee believes it is critical to build on this progress and use it as an opportunity to develop and implement a comprehensive plan that will provide long-term financial stability. 

What We’ve Done

The Civic Committee has consistently focused on the State’s serious financial issues and the need to develop a comprehensive plan to solve them and change the negative narrative about Illinois. It is through this lens that we analyzed the proposed Graduated Income Tax constitutional amendment, which would not have fully addressed the State’s fiscal problems on its own. In September 2020, we released a statement and policy position describing our opposition to the amendment referendum in the absence of a comprehensive plan. The proposed constitutional amendment was not approved by the voters. Long term fiscal stability will require structural solutions, including a mix of new revenues, spending reductions, and, most importantly, a spirit shared sacrifice. It is our hope that stakeholders across the state can work together to address the serious fiscal challenges which for too long have stymied job growth and economic opportunity despite Illinois’ great assets.

Our 2019 report, Restore Illinois: A Foundation for Growth, lays out a comprehensive plan to put Illinois back on a sound financial footing. It called for the State to fully fund its pension plans, pay down the bill backlog, establish a reserve fund, and balance the State budget. And, it detailed a plan for doing so immediately, without a lengthy process dependent on constitutional amendments or other actions in the future. The report was the result of years-long research and analysis by the Civic Committee’s Tax Policy Task Force, composed of members who are top business leaders in the region. 

This latest report followed in a long tradition of calling attention and presenting solutions to the most pressing issues in State finance. In 2017, the Task Force offered its first comprehensive set of solutions to Illinois' financial situation in Bringing Illinois Back: A Framework for Our Future

The Civic Committee was one of the earliest voices drawing attention to the pension crisis. In 2006, we released Facing Facts saying that Illinois is on its way to financial implosion. We also launched Illinois is Broke to ensure the unfunded pension liability was on every elected leader’s agenda and to make pension reform a key election topic. Because of our efforts, the General Assembly passed a major pension reform bill in 2012; however, it was later deemed unconstitutional. 

Over the years, our members have served as leaders in efforts to resolve the critical issues facing Illinois. Lester Crown and Eden Martin served on the Commission to Strengthen Chicago’s Pension Funds. Later, to address the State-level pension crisis, Eden Martin also served on Governor Quinn’s Pension Modernization Task Force. 

What We’ve Learned

As a thought leader on State finance, we have produced the following reports that detail the issues and propose solutions:

Restore Illinois: A Foundation for Growth (2019)

Bringing Illinois Back: A Framework for our Future (2017)

Just the Facts (2012)

Chicago's Underfunded Pension Plans (2010)

Facing Facts 2009: An Updated Report on the State of Illinois’ Fiscal Crisis (2009)

Facing Facts (2006)

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