Illinois is a poster child for liberal fiscal mismanagement. Illinois is facing the typical end result of any state that follows the siren song of liberalism.
You know it is bad when even the liberal Chicago Tribune is complaining.
The state of Illinois admits to $83 billion in pension underfunding, a staggering weight on today's and tomorrow's taxpayers. Add to that the as yet uncalculated billions in unfunded pension obligations for city, county and other local governments. During a Tribune forum Wednesday, Mayor Rahm Emanuel explained how that overhang — some estimates run far higher — deters businesses from locating in Chicago: Companies don't want to buy shares in a phenomenal tax burden that will unfold over decades.
One nice thing about pension obligations: When you know the number of employees and their ages, the actuarial estimates start falling into place. The mystery is the investment return a pension fund will earn over time.
A second, often overlooked time bomb merrily ticking for governments nationwide is the cost of health insurance for all those retirees. That number, too, is hard to gauge, because health care costs — like future investment returns — are unknowable. Yet governments typically don't put aside money for future health care, as they do for future pensions. The culture is to pay-as-you-go.
In Illinois, that means pay-as-you-go-even-more-broke. The Illinois Policy Institute, a right-leaning think tank, now is releasing 133 pages of frightening data — we obtained a copy Thursday — that project yet another devastating hit to taxpayers: Beyond that $83 billion in unfunded pensions, state government alone faces an unfunded liability of more than $54 billion in retiree health liabilities over the next 30 years.
Illinois lawmakers haven't yet seen that startling number, but they do know they have to confront a retiree health debacle. Last year Illinois Senate legislation to begin addressing that debacle didn't make it to a floor vote. Gov. Pat Quinn's pointed words on the subject in his February budget address both encourage us and make us hope he sticks to his word that something has to happen.
The IPI says that only 8 percent of private-sector retirees are offered health insurance benefits, and those retirees pay an average of 54 percent of the cost. Similarly requiring Illinois retirees to pay an average of 54 percent of insurance costs would save Illinois $500 million a year. Over the next 30 years, that change by itself would shrink the anticipated $54 billion shortfall by $21 billion. IPI suggests leaving benefits essentially intact for retired state and university employees with household incomes below $70,000 a year. Those with incomes between $70,000 and $200,000 a year would receive monthly subsidies of $302 and pay $369 themselves. And "retired union heads or university executives collecting pensions nearing $200,000 would be required to cover their own health insurance costs."
Illinois has followed liberalism to the letter. It has spent lavishly on unions and public employee benefits. It never gave much thought to how all of this would be paid for.
Last year, instituted massive tax hikes. Surprise, they did not work. Illinois has not balanced its budget with tax hikes. Guess what? Any conservative could have told them it would not work.
Illinois will not cut its budget. What it will do in the next few years, when the bills come due, it will ask the rest of the nation to pay for its excesses.
Then, the rest of America should just say no.
Tags: armageddon, fiscal, illinois, liabilities, unfunded
Permalink Reply by Debrajoe Smith-Beatty on This is what happens when you have crooks in office.
Permalink Reply by Pat Chadwell on Yepp and Harry Reid is #1 in line then his family also, just look at his family history and see the ones that were hanged...
Permalink Reply by William T. Olson on Illinois, California, Michigan, New York, guess what they all have in common? You guessed it, run by Democrats. Any questions?
Permalink Reply by Karen Tirio on HEY If Gov. Walker from Wisc does get recalled, we sure could use him in Illinois!
Permalink Reply by Rose Wilkes on Amen, Karen! When I go to WI I see RECALL WALKER signs all over. Those people don't know what they have in him. And, he is keeping right on making reforms. Right on, Scott!
Permalink Reply by Ranchman on Illinois will soon start doubling down on its citizens to pay the bills. Between that and corporations fleeing the state in droves because they can't afford the insanely high tax rate, it will sound the death knell for the Land of Lincoln, with massive civil unrest to follow. Pictures at eleven.
I live in Illinois, and we have been battling the Illinois GOP for years. See, they're really not Republicans. Most of them have joined the Democrats - if you can't beat em, join em. As such, many Republicans never see any general election challenges by Democrats, becasue Mike Madigan likes them, they vote his way. Some of these Republicans are only interested in staying in their position and are more than happy to eat the crumbs from the Democrat table.
Michael Madigan rules Illinois with an iron fist. You don't cross him, or you're out! Play his game, and he makes sure you're well taken care off.
The governor is a shill, a rube, the col. Klink of Governors. It's Madigan that's the king maker. He's got his daughter as Attorney General, many Chicago judges are paid off, which is why they have their own election laws separate from the State.
I'm putting my home up for sale this spring, because the next shoe to drop is taking those unfunded pensions and dumping them back on the districts which will jack our property taxes through the roof. Well...they're already through the roof. Best thing to do is get out of this State. ASAP
Permalink Reply by Ginny Marriott on I, too, live in Illinois, and Michael Brown knows whereof he speaks! I have begged my husband to move, but his reply is always, "We couldn't sell the house, I couldn't find a job, we can't afford to move, etc., etc." As lifelong residents of this state, I understand his hesitancy, but if the window for fleeing this state isn't already closed, it is about to slam shut with new taxes on selling your home after 2012. We are seniors, and I fear if we don't vote with our feet now, we will never be able to retire. Any suggestions as to how I convince him that it's time for us to go?
Permalink Reply by B Beck on You could also look into moving to the Dakota's they need all kinds of people there economy is growing so fast. Two truck drivers I work with have left and gone to those states.
Permalink Reply by Doug Nicholson on From what I've heard, McDonalds is having trouble finding employees there because an unskilled laborer can earn $60K or more in the oil fields! I wish I didn't hate the cold so much (LOL)!
Permalink Reply by Jo Gonzalez on Texas would welcome you, jobs, nice people, Conservative values, decent priced housing markets, lots of Christians, might have to buy a pick up, and learn to drink beer, and wear boots, but that's not too bad. No State income Tax. I don't suggest the largest cities, but the area in general is real nice.
Permalink Reply by Darwin Rockantansky on Las Vegas is in the top five growing communities in America. Housing prices bottomed out last November and have started a slow but steady climb. No personal or corporate taxes, one of the true lowest cost of living in the nation and great weather if you get past the two or three weeks in August when it is toasty warm.
We have been here more than a dozen years and would not live anyplace else.
We would be more than happy to help get you settled!
Darwin Rockantansky
Las Vegas, Nevada
Las Vegas, Nevada
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