The State Budget Crisis Task Force, established by former Federal Reserve chairman Paul Volcker and Richard Ravitch to examine threats to near and long term fiscal sustainability in 6 U.S states, reports today that Illinois pensions, the worst funded in the U.S., are “destined for insolvency” unless the state overcomes its politicized budget process. In addition the report also says the state may have a jobless rate at 6 percent or more through at least 2019. Ravitch believes Illinois is unquestionably in more serious shape than any other single state, because of all the years of issuing pension bonds and the deficits they dealt with by borrowing money.
State Representative Bill Mitchell says he believes one thing lawmakers can do when they return to Springfield is say “No” to Obama-care.
The study reveals state and local governments nationwide face as much as $3 trillion in unfunded public-employee retirement costs after the 18-month recession that ended in 2009, according to the report. The study goes on to show by fiscal year 2015, pension costs could take up one-fourth of Illinois’s resources.
While releasing its findings, the Task Force did not give specifics on what the state can do to turn the tide.