Illinois has the worst public employee pension deficit in the country, even more so than populous California. In fact, Illinois' shortfall exceeds the shortfalls of about 36 other states combined.
Illinois' shortfall to fully cover pension promises to public employees is $172 billion, worse than California's $140 billion shortfall, worse than New Jersey's $90 billion shortfall, and even worse than $30 billion. worse than the deficit. Texas, Massachusetts, Connecticut and Kentucky are expected to receive $80 billion.
as wire point According to the memo, Illinois is a black blot of red ink and irresponsibility on the Midwest map when compared to its neighbors. None of the six surrounding states that border Illinois come close to the pension bomb that Illinois has. Kentucky's deficit is next worst at $34 billion, but its deficit is less than a third of Illinois' total. Missouri comes next with $13 billion, Indiana with $11 billion, Michigan with $8 billion, Wisconsin with $4 billion and Iowa with just $2 billion. But even if it totals $72 billion, all six surrounding states still total That's $100 billion less than Illinois' massive shortfall.
The problem, of course, is politics. Both the state's Republican and Democratic parties have favored public employee unions by proposing endless increases in benefits and perks, even though current promises are already financially unattainable. But Illinois has an even bigger problem. That's because the gravy-train nature of pensions is actually enshrined in the state constitution.
Disastrous provisions added to the state constitution during the 1970 constitutional convention maintain It means that cutting some parts of the public pension is actually unconstitutional. That means no adjustments can be made to public pensions, no matter how bad the debt bomb gets.
of regulations It stipulates that public pensions are “an enforceable contractual relationship, and their benefits may not be reduced or impaired.'' This puts the possibility of reform and adjustment out of reach for policymakers and legislators. As a result, each new Congress added more benefits and higher pay, setting off a ticking time bomb.
For 20 years, Illinois has been completely controlled by Democrats with a supermajority. And the liberal Republicans, who had been in some power before then, were no better on this issue.
To further illustrate just how bad Illinois' pension problems are, Fitch Ratings recently calculated the pension liability of 50 states as a fraction of the state's economy. And once again, Illinois outperformed the rest in the worst of situations.
Illinois' pension bomb accounts for 19% of its economy, far more than the next two worst states, Connecticut's 15% and Kentucky's 14%. Compared to neighboring states, Illinois also stands out as drowning in a sea of red ink. Compared to the pension crisis's 19%, Missouri and Indiana each have only about 3% of their economies, while Michigan, Wisconsin, and Iowa have only 1% of their economies.
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