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.
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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.
Cut taxes and slash and burn the benefits further… brought to you by NCCivitas!
Wow! The headline led me to believe that the pension system was in peril but after following the link to the N&O website, I found that is really just retiree healthcare that is in peril.
The legislators should have taking care of this a long time ago. State workers help build this state and some has been killed in the line of duty. State workers did not cause this problem, the legislators did by not fund the program over the years.
Why do any defined-benefit pensions exist for any government retirees? They are a thing of the past in the private sector. Why should those of us toiling in the private sector be expected to work until we fall over dead to support government retirees? One solution for states would be to end all benefits if their retirees leave their state on retirement.
And then there is Kansas…a State that NCCivitas apparently does not know exists.