Columnist George Will highlights just how dire the fiscal circumstances are for the state of Illinois, which underscores the importance of that state’s gubernatorial race this year.
Republican Gov. Bruce Rauner will seek re-election with a stark warning: The state is approaching a death spiral – departing people and businesses suppress growth; the legislature responds by raising taxes; the exodus accelerates.
Unfunded state and local government retirement debt is more than $260 billion and rising. Unfunded pension liabilities for the nation’s highest-paid government workers (overtime starts at 37.5 hours) are $130 billion and are projected to increase for at least through the next decade. Nearly 25 percent of the state’s general funds go to retirees (many living in Texas and Florida). Vendors are owed $9.5 billion. Every five minutes the population – down 1.22 million in 16 years – declines as another person, and an average of $30,000 more in taxable income flees the nation’s highest combined state and local taxes.
North Carolina, while not in as deep a hole as Illinois, faces its own issues with unfunded pension and state retiree health benefit liabilities.
Illinois serves as the poster child for short-sighted legislators making grandiose promises with little regard for how to pay for those promises down the road. Hopefully, North Carolina legislators will responsibly rein in these liabilities rather than go down the self-destructive path Illinois has chosen for the last several decades.