This is happening just across the border. Just remember… when politicians make bad decisions, they don’t pay the bills. You do.
Sometimes the clearest warning about Illinois’ fiscal crisis can be communicated using numbers, sometimes with a well-chosen phrase. Here we present both, as reminders during the period before a new Democratic governor takes office with a Democratic mega-majority, that the state’s messes will only worsen. Until lawmakers take decisive action.
First, the awful numbers: For several years we’ve cited the figure of $130 billion to represent Illinois’ estimated unfunded pension liability. Never mind that number, it was $133 billion as of June 2018 — and it’s getting worse — according to a new state report. The Commission on Government Forecasting and Accountability estimates the shortfall in commitments to future retirees will deepen to nearly $137 billion in the current July-to-June year, and to $139 billion in fiscal 2020.
Now a choice word or several: Fitch Ratings in a new report says Illinois has exhibited a “lack of coherent fiscal policymaking over many years” and is guilty of “irresolute fiscal decision-making.” Over the years, lawmakers skimped on payments into the retirement kitty, or avoided making payments altogether, rather than being disciplined about putting enough money into the funds to pay for all the benefits they had promised.
Today, Fitch says, Illinois’ net pension liability plus other long-term debt represent 29 percent of the state’s personal income, the highest of any state (our emphasis) and well above the 50-state median of 6 percent. Oh yes, the annual operating budget — an astonishing one-fourth of which goes to pensions — is also a wreck: Fitch reminds us that about $2 billion of the $38 billion budget revenue is either unlikely to be realized or one-time in nature. Irresolute, indeed.