Iowa (the blue line) maintained positive net revenue in 15 of the 16 years. Illinois, on the other hand, did so in only three of those 16 years.
The frequency of truly-balanced-budgets, as indicated by “Net Revenue,” provides significant explanatory power (in econometrics-speak) for two important measures of state government performance – Truth in Accounting’s “Taxpayer Burden” measure of overall financial condition and rankings of the states on the latest Gallup results for a survey of trust in state government.
In our latest (2021) Financial State of the States report on state government finances, Iowa ranked 9th, while Illinois ranked 48th. And in the latest Gallup poll on trust in state government, Iowa ranked 8th, while Illinois ranked 50th (dead last).
The Governmental Accounting Standards Board has proposed changes it calls “improvements” to the accounting standards for governments. However, watchdog groups such as Truth in Accounting have criticized the proposed changes and urged the adoption of more stringent standards that would require governments to balance their budgets the way most businesses are required to do. Illinois has grown accustomed to using lax accounting methods to hide its budget deficits, racking up debt year after year. The state’s taxpayers would benefit from tougher standards that impose fiscal discipline.