By Ted Dabrowski and John Klingner | Wirepoints
It’s the only reasonable conclusion. Illinois politicians who continue to oppose pension reform via a constitutional amendment should be booted from office. The latest state-by-state pension report from Fitch Ratings demonstrates why.
At $172 billion,* Illinois has the nation’s biggest pension shortfall by far, the agency says. Fitch also calculates that Illinois’ pension debt as a share of its economy is the largest in the country. Either way, Illinois is the nation’s extreme outlier.
To get an idea of just how out of whack Illinois is, consider the pension shortfalls of its neighbors. Indiana’s is just $11 billion. Michigan’s, $8 billion. Wisconsin’s, $4 billion. Iowa’s, $2 billion.
Politicians from both sides of the aisle have made this mess over the past few decades. They’ve doled out benefits far faster than Illinois taxpayers could ever pay for them, which we’ve documented in great detail here and here. Lawmakers continued to sweeten those benefits – like compounded colas – even as the crisis deepened. Illinois politicians were even charged by the SEC for securities fraud from 2005 to 2009 when they misled municipal bond investors about the state’s approach to funding its pension obligations.
It’s impossible to overstate just how menacing those massive pension shortfalls are to the future of this state and to the future of everyday Illinoisans. Illinoisans already pay the nation’s highest property taxes. Home values have barely kept up with inflation since 2000 – Illinois has had the country’s worst housing performance. And a net of more than 1.5 million residents have been squeezed out of the state over the last two decades. Households across the state are being impoverished and families are being broken up, in large part due to the crushing cost of pensions.
Read more here.
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