The announcement by Fitch Ratings Services that it is giving Illinois a “negative outlook” because of its shaky finances comes as no surprise, at least not to neutral observers of the irresponsible way this state is being run.
Gov. Rod Blagojevich last year pushed lawmakers to defer about $4.8 billion in scheduled pension payments over 10 years, including a combined $2.3 billion deferral in 2005 and 2006. Those deferrals allow state lawmakers to spend money in other areas of the budget and on expensive new feel-good programs, but at enormous cost.
Illinois’ $39 billion unfunded pension liability is the nation’s worst. The deferrals make the worst even worse, as Fitch recognizes. To our governor and his backers, though, the pension obligations to teachers and other state and local government workers are barely an after-thought.
Since Blagojevich took office in 2003, the state’s general obligation debt has jumped from $7.6 billion to $20.3 billion. We now spend $1.6 billion a year in debt service, double the amount when Blagojevich took office. And the bill keeps climbing.
Fitch knows all this, hence its warning. Will Illinois lawmakers listen?
Ralph Conner ([email protected]) is government affairs manager for The Heartland Institute.