When it comes to the full faith and credit of the Great State of Illinois, three major credit rating companies judge it the lowest in the union. The problem is that state politicians made pension promises they didn’t pay for and still aren’t.
How bad is it? Illinois’s total unfunded pension liability now tops $200 billion dollars – that’s roughly 250 percent of the state’s annual revenue. And growing.
But take, heart!
Gov. Pat Quinn just said that the massive pension shortfall will grow at a slower pace than previously thought, $5 million (instead of $17 million) a day.
Whoopee!
Folks at the Illinois Policy Institute are a little mystified by this pronouncement, though. The projection seems based more on wishes and hope than the straight dope. Besides, “this isn’t the first time the state has predicted that the growth in the state’s unfunded liability would slow,” Institute Senior Fellow Jonathan Ingram writes, noting that “the exact same prediction was made last year based on the actuarial projections made in fiscal year 2011. The systems predicted that the unfunded liability would grow by ‘only’ $5.3 billion in fiscal year 2012.”
The conventional wisdom blames too many years of the legislature shorting the annual payments to the five public-employee retirement funds.
Another way to look at it is simply that politicians are a whole lot better at promising than delivering, and defined benefit (rather than defined contribution) pensions are too tempting to trust to any politician.
This is Common Sense. I’m Paul Jacob.
7 replies on “Illinois Pension Ills”
Now, Paul, it is based on straight dope.….
Both the dope being smoked and Gov. Dope smoking it are as close to the 100% pure quill as you’ll find.…
Paul,
Your article is right on the mark. And, since it has ramifications for the other states, I will share it today on my blog — ARRA News Service.
Paul, we haven’t crossed paths and conferences in the last couple years. However, many Sampherians are still active and making a difference. Thank you for your example. Oklahoma has transformed and Arkansas and other states are becoming more citizen’s based. At this very moment Arkansans have citizen’s ballot initiative underway to repeal the AR legislature’s bill implementing “Obamacare.”
Thanks, Bill
Unfunded liability. Is not that the same as a debt, being laid on the future taxpayers of Illinois?
And when Illinois is bailed out by DC — the joke is on the rest of us.
I thought cal. had the worst credit rating.
And, did you notice, a few weeks ago, Cal (probably smoke and mirrors) was showing a “surplus” so the legislature, rather then paying down debt wanted to fund new programs?
By the way, how much are the pensions of the union officials who worked briefly (very briefly) for a government agency (in ILL) costing? f I recall, a union official who worked briefly AS A SUBSTITUTE TEACHER was collecting a teacher’s pension (as if he had taught for 20 or 30 years) while a union official. (Illinois not Cal)
It’s always good to know that there is an Illinois Governor who isn’t in jail — give him time and he’ll probably join the others.
to 2War etc
Pat Quinn is A WOMAN, her father is a state official (also) I think Attorney general, not sure.
So, yoru statement would be –last part of the line– ” and SHE’LL join the others.
Jay
Paul, You may not be aware but Illinois was charged by the SEC for securities fraud for massively understating the risks of the IL Pension fund:
http://www.sec.gov/news/press/2013/2013 – 37.htm
and here’s a website that keeps tabs on most of the looming pension fund disasters:
http://www.pensiontsunami.com/