now in its one-hundred-and-eightieth year
Have you ever been in debt, deeply in debt? Knowing you’re charging things to your credit cards that you can’t pay? Every month, the bills coming in are more and more scary. You can’t take your problem to your family or they’ll be angry. So, to stave off panic, you begin drawing cash advances from one of the more lenient credit-card companies, and that enables you to pay some of your obligations in time. But soon even that isn’t enough: the credit-card people realize you’re in way over your head, and they jack up your rates. The interest on your balances spikes. Your minimum monthly payments go higher and higher. By now your debt is consuming your salary, you begin to miss payments, and when you finally run out of cash, you will be bankrupt.
This more or less describes the state of the finances of Illinois.
Our legislature has so mismanaged the state’s finances that Illinois is spiraling toward a terrible debt crisis. The state’s accumulated unfunded debt obligations for the coming year total some $13 billion. Its unfunded pension obligations are ballooning. Not surprisingly, Illinois’s credit rating has been dropping. Experts now regard it as the least creditworthy state in the Union, along with California. This means that we will all be collectively assuming more and more debt and interest just to keep going. Illinois’s cheap fix has been to issue bonds whenever it can’t manage to balance its budget, but it’s a fix that will become increasingly punishing.
Every time the state borrows, it conceals from you the fact that your tax burden–our collective financial indebtedness–just got bigger. Resorting to bond offerings has been popular with the governor and legislature because the alternative is to have to change the nature of the state or evoke the wrath of Illinois taxpayers. Recently, Illinois’ political leaders have been selling state assets and engaging in other desperate measures to stave off the day of reckoning: the day when business as usual cannot go on. For when the state has exhausted all these short-term expediencies, we, the taxpayers, will be left to shoulder all the accumulated liabilities. On that day, the Illinois smash-up will become ours.
The Pension Standoff in Illinois, Our Polity, June 22, 2012.