Illinois stands to run off road
With all the recent legislative focus on issues like gun control and same-sex marriage, one could easily forget that Illinois' finances are on life support.
There's good and bad news about Illinois finances contained in the recent analysis of the state's fiscal health that was prepared by Chicago's Civic Federation.
Unfortunately, the good news isn't very good, while the bad news is very bad.
The Civic Federation's examination of state spending trends showed that unpaid bills in fiscal year 2018 will be roughly $14 billion less than its analysis showed last year. It estimates that Illinois is on track to have run up $21.7 billion in unpaid bills by FY 2018, down from the $35 billion estimated last year.
At least the trend line is moving in the right direction — on that narrow point.
But otherwise, the Civic Federation is predicting unremitting disaster in the state's finances unless state legislators show more interest in addressing this problem than they have in the past.
The estimated $22 billion in unpaid bills is galling, particularly when recalling legislators' promises to use tax revenue generated by increases in the state's personal and corporate income taxes to pay the bills. Not only has the state not used the money to pay off its debts, the backlog is expected to skyrocket from the current backlog of $7.8 billion to $21.7 billion over the next five years.
It would be a mistake, of course, to take these figures too much to heart. Things can change from one year to the next, as the $14 billion decline in estimated bills demonstrates. But while one cannot be certain exactly how bad Illinois' situation is, one can be certain that it is bad enough to require serious action by Gov. Pat Quinn and state legislators.
Essentially, what the Civic Federation analysis shows is that the cost of the state's five public pension systems is swamping the state's ability to meet its obligations.
State pensioners don't want to hear that, and they're correct to blame past irresponsible governors and legislators who shirked their obligation to properly fund the state's pension systems. But the fact is the state's public pension systems are underfunded by $95 billion-plus.
Just in this coming year, the state is obligated to pay $5.1 billion to its public pension funds. That's 22.1 percent of the state budget. In another five years, unless changes are made, pension payments will consume an estimated 31 percent of the state's general fund.
The Civic Federation issued its analysis as part of a relentless effort to persuade legislators to address the pension issue. So in that sense, it's nothing new.
Federation leaders and Gov. Quinn have been begging for action for months and have been, for the most part, ignored by the Illinois House and Senate. Their inaction comes at a high cost, as the Civic Federation's report demonstrates.