Illinois drains state's savings account due to budget crisis

AP News
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Posted: Aug 14, 2016 12:54 PM

CHICAGO (AP) — A stopgap spending plan that Illinois lawmakers approved this summer in the midst of a long-lasting budget crisis is quickly draining the state's rainy day fund.

Experts agree should have $1.5 to $3 billion to help weather an economic downturn. As of Friday, it had about $180 million. In a matter of weeks, the balance will be zero.

Financial watchdogs and at least one major credit rating agency warn that it's a bad move to empty the $275 million fund to pay for items such as food and medicine in the absence of a full budget. They say it means that when a recession hits, new taxes or spending cuts will be "draconian."

Using the rainy day fund for cash flow is nothing new in financially troubled Illinois.