Funny how so many people are glossing over this scandal: The budget that was crammed through by House Speaker Michael Madigan does absolutely nothing about the outrageous public employee pension debt.
All the hosannas about how Illinois finally got a budget after three years are either a sign of
willful ignorance or intentional deception. Most likely both.
Here's a great analysis of the situation by Joe Cahill in Crain's Chicago Business:
When it comes to the state's gravest budgetary peril, however, the 2018 budget is another exercise in denial and can-kicking. Legislators did nothing about unfunded state employee pension obligations estimated at $130 billion, an albatross that will surely drag Illinois under unless aggressive action is taken to reduce the shortfall. In fact, the new budget could even enlarge the pension funding sinkhole.
Moody's Investors Service agrees. After the fake Madigan budget passed, Moody's said that it is still reviewing whether to lower Illinois' bond rating to junk status because of the...
likelihood of further deterioration in Illinois' most pressing credit challenges: its severely underfunded pensions and a backlog of unpaid bills, which has doubled during the past year....
So far, the plan appears to lack concrete measures that will materially improve Illinois' long-term capacity to address its unfunded pension liabilities. A June 30 order from a federal judge that the state accelerate payments owed to Medicaid managed care organizations and service providers cast doubt on the state's immediate ability to keep up with its statutory pension contribution schedule while also meeting obligations for debt service, payroll and school funding. The state anticipates addressing its approximately $15 billion backlog of payments owed partly through a bond offering that probably will rank among the largest in the state's history. This component of the state's broader fiscal plan leaves Illinois not only dependent on market access to ease liquidity pressures, but also facing a significant increase in its tax-supported debt burden. Moreover, the effectiveness of the state's strategy to contain and reduce its deferred bills, once the backlog-financing debt has been issued, remains to be seen.
Merrily Madigan, Democrats and their media rationalizers go along, failing to provide any way at all for Illinois to recover. If anything, Illinois will slide further down into the financial abyss.