To a less than enthusiastic Illinois General Assembly Gov. JB Pritzker attempted to address the woes of Illinois financial shortfalls. Proposing a 39 billion dollar spending plan. 20 billion of it already spoken for on bills, and “Obligations”. If nobody else caught that. You can never spend your way out of debt. The state has to put serious consideration into pension reform.
It is true the pension crisis was created by both parties. The result of the Michael Madigan led General Assembly for the last 40 years. Many democrats and a few republicans who are no longer in office, collect on the same pensions they ignored ensuring for others. Bureaucrats created this mess allowing a backlog of unpaid bills to pile up. Causing the interest liability along with the pension asset debt to rise. While one governor after the next puts together spending bills. Varrying on many issues one common principal remains: Ignoring pension reform.
Pension debt is set to increase by 500 million at the end of 2019. Moodys calculates Illinois pension debt is at 214 billion. Pritzker proposes in his budget that with an allocated 4.5 billion he can head this crisis off. Asking for 2 billion in pension obligation bonds. 1 billion for early retirement buyouts. 1.5 billion for the pension bill backlog. Certainly it’s the law and obligation of the state to pay the pensions owed to each recipient.
The central focus has to shift toward getting out of paying new recipients on this dangerous path. With real multilateral financial savy there is legislation to be had that can solve the pension crisis. The notion this issue can’t be fixed is deeply wrong. Lawmakers have to push their limits to be innovative and spearhead the pension crisis. Illinois needs a progressive financial solution to our shortcommings with respect to business, and families across Illinois. I have serious doubts about Gov. Pritzker being the guy to put us Illinoisans on a better path. But damnit I hope he is.
Some comparisons Pritzker insinuated were contradictions in his address. He left a lot of unanswered questions about fixing the pension crisis. Education spending increases that have outpaced all other sector spending for years will now rise again. Respected Congresswoman Lindsey Parkhurst (R) – 79th District was ready to take Gov. Pritzker to task. Correcting many of his statements from his speech that do appear to be falsehoods. The spaghetti that stuck to the wall was Pritzker claiming other states are moving to a fair tax or progressive tax.
The last state to enact a fair tax was Conneticut in 1996. Feel the nostalgia? Mixed with a bad business climate sent that state in an economic downspiral. In 2013 North Carolina, and 2018 Kentucky moved to a flat tax. We already have a flat tax here in Illinois. Our flat tax isn’t the problem. Continuing to promise pensions in an underfunded and fractured structure is.