Every person in Illinois owes $11,000 for pensions, with no fix in sight
Three years ago, the Illinois Supreme Court struck down the state’s attempt to cut its employees’ pension benefits to chip away at a retirement-system debt that’s swelled to almost $11,000 for every man, woman and child.
Since then, Illinois’s credit rating was downgraded to the verge of junk, its bonds have tumbled and its largest city, Chicago, was stripped of its investment-grade status by Moody’s Investors Service. And Republican Gov. Bruce Rauner and the Democrat-led legislature have made no real progress toward a new plan that doesn’t violate the state constitution’s ban on reducing benefits.
“Illinois failure to address its pension crisis has resulted in further deterioration of the state and cities’ financial condition, exorbitantly high borrowing costs, and an inability to address other critical needs at the state and local level,” said Laurence Msall, president of the Civic Federation, a Chicago nonprofit that tracks state and municipal finances. “Time is not your friend when your liabilities are compounding and your revenues are not.”
The funding shortfall across Illinois’s five retirement systems climbed to $137 billion by last June, a jump of about $17.8 billion since 2015, after the government for years failed to made adequate contributions. That pension deficit — more than four times larger that its debt to general-obligation bondholders — is adding hundreds of millions of dollars in costs to Illinois’s budget each year as the government plows more money in to catch up.
Read more: http://www.daily-journal.com/news/local/every-person-in-illinois-owes-for-pensions-with-no-fix/article_0b750ab8-539d-11e8-9e43-3f49cd2f3edb.html
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