I see that Steve Chapman noticed the same thing I did about Gov. Rauner’s first State of the State address:
Bruce Rauner, the new Republican governor, gave a State of the State address Wednesday that mysteriously failed to address the state’s huge public employee pension debt. It’s like a biography of George Custer that omits Little Bighorn.
The chance of success is about as small as Custer’s. Illinois has a bigger unfunded obligation than any state in the country, exceeding $100 billion and, by some estimates, as high as $250 billion. It has attained that distinction by failures like skipping contributions and assuming the economic good times would never end.
He concludes:
Rauner has talked about moving state workers into defined-contribution 401(k)-style pension programs. But that option does nothing to lighten the vast obligations that have already been incurred. And there is a good chance the state courts would disallow it because it would leave these workers with something less than they were promised when they were hired.
Nearly every state has followed the same basic policy of making promises today and letting someone figure out how to pay for them years from now. Illinois may be on the road to ruin, but it’s just the lead car in a long parade, passing every exit.
As I have been saying for some time the courts are likely to reject any plan from the state legislature that requires paying present public workers less than they were promised other than in a bankruptcy proceedings, something that would be unprecedented at the state level. Illinois has a limited array of alternatives: higher taxes which will be paid by fewer individuals and companies since both are leaving the state at a rapid clip, greater economic growth which it’s hard to see happening with a legislature whose only solution is raising taxes or a nationwide boom that doesn’t appear to be materializing, or cutting everything else the state spends money on as far as is necessary, possibly to zero.