Before you vote on Tuesday, you should read this to get a better understanding of one of the biggest problems facing Illinois.
Illinois’ unfunded pension liability, already the worst in the nation, is expected to spiral to even higher levels because the financially desperate funds are revising their investment goals downward.
The funds are desperate on more than one front. They are not getting their monthly contributions from the state on a timely basis. And those delays are forcing them to sell fund assets at an annualized rate approaching 10 percent to pay benefits to retirees. The one-two punch is deflating their bottom line.
Gov. Pat Quinn and the Illinois Legislature don’t intend to sit around and do nothing. What they’re likely to do, a mere two days after the election, is what they’ve always done: Borrow more.
The rising price tags for Illinois taxpayers come as the Illinois Senate is set to reconvene Thursday, atGov. Pat Quinn’s request, to consider whether to borrow to meet annual pension obligations once again. The state would issue bonds for up to $4.1 billion in state contributions to the five funds in fiscal 2011, which began July 1.
The move was approved by the House on May 25 but was not called for a vote in the Senate becauseDemocrats were not able to get the full support of their ranks needed for a three-fifths majority, and theRepublicans were not willing to step in.
Some observers say not much has changed in the intervening time.
But if the state does decide to borrow again, it will come atop more than $13 billion in previous borrowing for annual pension obligations, a portion of which ended up getting skimmed off for operating expenses during the tenure of former Gov. Rod Blagojevich.
So, here’s the deal: A lame duck legislature and possibly a lame duck governor plan to put us deeper in debt. Even before the smoke from the election clears. Sound familiar?