Cash windfall just a blip
Illinois received an unexpected cash infusion from taxpayers last spring, but it does nothing to solve the state's fiscal crisis as legislative leaders continue their stalemate.
In what passes for good economic news in Illinois these days, Comptroller Judy Baar Topinka reported Monday that Illinois ended the fiscal year June 30 with a smaller backlog of unpaid bills than expected thanks to a windfall of unanticipated tax revenue.
The one-time influx of cash helped the state speed up payment on some of its giant backlog of bills, but Illinois is nowhere near emerging from its miserable financial straits largely because of its continuing pension problem.
The comptroller reported that Illinois finished the year $6.1 billion in the red because of an "April surprise" — $1.3 billion in unexpected revenue last spring from the sale of assets by residents and corporations before higher tax rates took effect. But Topinka said the gains will be short-lived, ensuring that agencies that provide vital state services will continue to have long waits to be paid. She also estimated that the state's debt will climb to $7.5 billion in August and $9 billion by December.
What's driving the debt, as most people know by now, is the unfunded liability of the state's pension systems, now estimated to be around $100 billion and growing by $17 million daily. The state's yearly pension costs have risen from about $1.8 billion a year in 2008 to $6 billion this year, devouring increased revenues from a 67 percent income tax increase in 2011 and putting the squeeze on the ability to fund state services.
Democrats in control of the Legislature have been unable to agree on a solution, and they're deadlocked over competing bills introduced by House Speaker Michael Madigan and Senate President John Cullerton. Gov. Pat Quinn appointed a committee from members of the Senate and House to find a solution and gave lawmakers a July 9 deadline, but there's every indication his deadline could pass with no action.
That's a shame. While the powerful Democratic legislative leaders dither, the state's fiscal condition grows worse day by day. Members of the pension systems, who did nothing to create the problem, and the rest of the state's taxpayers, have every reason to be angry.