SPRINGFIELD, IL (Chambana Today) – As economists caution that a U.S. recession may be looming in the coming years, a new report reveals that Illinois is significantly more prepared to handle economic downturns compared to the Great Recession of 2007 and the COVID-19 Recession of 2020.

Authored by researchers from the nonpartisan Illinois Economic Policy Institute (ILEPI) and the Project for Middle Class Renewal (PMCR) at the University of Illinois at Urbana-Champaign, the report highlights nine core fiscal and economic improvements that have bolstered the state’s economic resilience.

“From significant improvements in budgeting and fiscal management to long-term investments in infrastructure, education, healthcare, and pensions, Illinois has developed a far stronger resilience to economic downturns than at any time in recent history,” said ILEPI economist and report coauthor Frank Manzo IV.

The report, Resisting the Next Recession: Measuring Illinois’ Economic Resiliency, outlines several key achievements:

  1. Elimination of Debt: The state eliminated its General Fund deficit and bill backlog, earning nine credit rating upgrades since 2020, allowing Illinois to borrow at lower interest rates.
  2. Rainy Day Fund Growth: Illinois now boasts a Budget Stabilization Fund of over $2 billion—nearly 700% larger than before the Great Recession.
  3. Stronger Pensions: The funded ratio of Illinois’ state retirement systems is at its highest level since 2008.
  4. Unemployment Fund Recovery: The Unemployment Insurance Trust Fund has been replenished to $2 billion.
  5. Work-Share Program: A program enabling employers to reduce work hours temporarily, allowing employees to receive prorated unemployment benefits, helps avoid layoffs.
  6. Education Investments: Annual public education funding has increased by $2 billion, reducing financially distressed school districts by 55% and boosting college grant aid by 77%.
  7. Infrastructure Development: With federal funding, Illinois is committing $41 billion to roads, bridges, transit, rail, and aviation projects over the next six years.
  8. Clean Energy Initiatives: Investments in climate resiliency and carbon-free nuclear power are creating jobs while moving the state toward 100% clean energy.
  9. Expanded Healthcare Access: Medicaid expansion under the Affordable Care Act has reduced the uninsured population by nearly 1 million people, a 56% decrease.

The report notes, however, that challenges remain. While Illinois has improved its pension system by meeting required contributions, offering buyouts, and making supplemental contributions, continued diligence is needed to ensure the system reaches its goal of being 90% funded by 2045.

Additionally, the state’s tax structure poses both strengths and challenges. A reliance on property taxes and a flat income tax provides stability during downturns, but Illinois’ sales tax system excludes many services, limiting its ability to maximize rainy day reserves during economic booms.

To read the full report, visit here.