Every time I question whether my decision to leave Illinois is the correct one, something I see, read, or hear shortly thereafter suggests I’m right. From the editorial “It’s worse than you thought” on the Chicago Tribune website this morning:
Fans of classic Peanuts know that, once again, Linus van Pelt spent this Halloween night waiting for the Great Pumpkin. Each year as Linus crouches amid the vines, embarrassed but unbowed, we think of bright-eyed Illinois lawmakers who wait, and wait, for the economic boom whose revenue windfalls will pay for all their overspending, overborrowing and overpromising.
Alas, no Great Pumpkin. Linus is stuck with perpetual hope. And alas, no economic boom. The lawmakers, from Gov. Pat Quinn on down, are stuck with pension, budget and related wreckage for which they can blame no one but … Illinois lawmakers. Twice this week citizens got new warnings that the mismanagement of state finances is even worse than they thought.
And what were those warnings?
1. That letter from the Civic Committee of The Commercial Club of Chicago, one of Illinois’ leading business groups, to its members and Illinois Governor Pat Quinn that said the state’s pension fund system “can no longer be salvaged.”
2. The state budget director suggesting the possibility of bonds being sold to help pay off billions of dollars of outstanding bills
Following up on that Civic Committee letter, yesterday I wrote that the State of Illinois’ pension funding gap had reached $86 billion. However, an article on the Crain’s Chicago Business website this morning stated:
A report last week by the Chicago-based Civic Federation, a government finance watchdog group, said the unfunded liability for the state’s five public pension funds jumped to $96.8 billion at the end of fiscal 2012 from $83 billion at the end of fiscal 2011.
$96.8 billion. My bad.
But turning to the possibility the State of Illinois may issue bonds to help pay down its bills, the Tribune editorial said:
Quinn’s budget director, Jerry Stermer, told a legislative committee Thursday that Illinois entered this fiscal year with $8 billion in unpaid bills — and will exit this fiscal year with $8 billion in unpaid bills. That’s almost as troubling as Stermer’s implication that the state with the nation’s worst credit rating ought to pay those bills by borrowing more billions:
“The governor’s interested in working with the General Assembly on a structured refinancing of this huge amount of unpaid bills, payables, and we plan to come to the General Assembly with a proposal in the next number of weeks to consider a refinancing of some of that.”
No- that wasn’t the Editor italicizing borrowing more billions.
Governor Quinn’s office later said the governor had no borrowing plan in place right now, but consider the following from the Crain’s piece:
The Nov. 6 general election boosted the ranks of Democrats in the House and Senate, theoretically giving them the three-fifths majority vote required to authorize GO bonds.
A bill introduced by Democratic lawmakers in the House last week would allow for the sale of $4 billion of bonds with proceeds earmarked for bill payments.
Hmmm. The phrase “ready to scramble” comes to mind here.
An unfunded pension liability that’s grown to $96.8 billion? $8 billion in unpaid bills that don’t seem to be going away- even after those big income tax hikes last year? Potentially borrowing money to help pay these bills off? As much as I don’t want to, I need to leave the state before I get stuck with the bill like everyone else who remains.
It’s coming. It’s just a matter of time.
Unless that economic boom Illinois legislators keep waiting for finally materializes.
I’m not holding my breath.
“It’s worse than you thought.” Chicago Tribune. 16 Nov. 2012. (http://www.chicagotribune.com/news/opinion/editorials/ct-edit-budget-20121116,0,6206483.story). 16 Nov. 2012.
“Quinn eyes bonds to pay off growing bill pile,” Crain’s Chicago Business. 16 Nov. 2012. (http://www.chicagobusiness.com/article/20121116/NEWS02/121119825/quinn-eyes-bonds-to-pay-off-growing-bill-pile). 16 Nov. 2012.
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