State Government “Financial Implosion”

In prior posts, I noted the problems of rapidly rising state government debt and massive unfunded state health care promises.

I just came across a detailed study by an Illinois group that puts the problem in stark perspective. The report by the Commercial Club of Chicago begins: “Illinois is headed toward financial implosion–Illinois’ debt and unrecognized obligations have grown at an enormous rate.”

The study puts the state’s pension debt at $10 billion, its unfunded pension costs at $46 billion, its unfunded employee health care costs at $48 billion, and its unpaid Medicaid bills at $2 billion. The total costs that will be pushed onto tomorrow’s taxpayers without reforms is an enormous $106 billion, or $8,800 per every person in the state of Illinois.

As the report notes, the Illinois state constitution requires a balanced budget, but state policymakers are routinely abusing that requirement by financing spending with debt and imposing growing unfunded obligations on future generations.

The Commerical Club’s report is not libertarian by a long shot, and indeed calls for tax increases as part of a solution. But the report does a good job describing the excessive benefits received by state bureaucrats and the irresponsible growth in unfunded spending that has become the norm in legislatures across the nation in recent years.

For background see here [.pdf].