And within the next ten years this most dysfunctional state will want the rest of the country to pay for what the state, county and municipal politicians created over the last ninety years.
From the Daily Mail, May 3:
- Illinois is grappling with issues which have triggered a rise in residents departing
- The state has struggled to add jobs and its public pension debt has ballooned
- Conservative thinktanks have grouped Illinois with other struggling blue states
Move over California and New York, a new state is in contention for the 'most dysfunctional' in America.
Illinois is grappling with a string of issues which have triggered a rise in residents departing the state.
The state has struggled to add jobs and its public pension debt has ballooned to nearly $150 billion. Meanwhile, its population has declined, hurting tax income.
Conservative thinktanks have now grouped Illinois with other blue states like New York and California, which have also faced an exodus amid issues ranging from immigration to crime.
'Unemployment rates are very high; wage growth is lagging compared to most other states,' said Bryce Hill, the director of fiscal and economic research at the Illinois Policy Institute.
Hill told the Daily Caller: 'The Census Bureau has reported that residents are leaving the state en masse to the tune of hundreds of thousands every single year, so much so that the state's population has actually been declining for the past 10 years.'So on any metric, quantitatively on outcomes, Illinois’ economy is lagging.'
Census Bureau data reveals the population fell by around 32,826 people in the year to July 2023. The population of 12,549,689 was also more than a quarter of a million less than in April 2020.
Illinois' pension debt also grew by $2.6 billion last year to reach $142.3 billion in unfunded liabilities, state data shows.
A September 2022 report by Equable said it has the second worst funded state pension in the country after Kentucky.
State accountants also project it will have a budget deficit of $891 million in the next fiscal year.
Governor J.B. Pritzker has defended his record in office and told a state of the state and budget address in February that his administration has 'grown Illinois' economy to over $1 trillion'.
Illinois' unemployment rate of 4.8 percent is also the fifth-highest in the country.
But Hill said the budget deficit coupled with migration out of the state will deepen the problems.
'So the state is projecting budget shortfalls for the next several years, absent any changes in spending or revenues, which is certainly affected by out migration,' he added.
'Migrants take over $10 billion worth of income with them out of state when we lose people due to domestic migration, so it certainly has an impact on not only the state’s pocketbooks but local tax revenues as well.
'But they’re not the root cause of the state’s budgetary stress, because the state also has another very large issue to contend with, which is unfunded pension liabilities that are eating into state and local government budgets and crowding out funding and taking up large sources of revenue.'....
....MUCH MORE
Good timing. If interested see also yesterday's "Chicago’s pension funding crisis is a century in the making. 5 grad students could change that" posted within an hour of the above. Great minds and all that. Or maybe just observant.
There is no hope but it is probably good that they are trying.
I say "no hope" because private sector employers and employees are now indentured servants of the public employee pension plans. And as more and more people realize this and flee (how much money did Citadel take out of the tax base when they went to Florida?) those that remain behind will literally be left to foot the bill.
All so the party in power the last 90 years could buy votes with other peoples money....
Over the years, Warren Buffet has obliquely commented on Illinois without mentioning it by name. From "Citi Shuts Muni Business That Once Was Envy of Rivals" (plus Warren Buffet gives a class on muni realities):
Can you imagine personally buying a 20-year City of Chicago general obligation bond?
Airports are a bit different because the airport authority is taxing transients who don't vote.
But they are dependent on people wanting to travel to or through that airport so the city's general economy is a factor. The city on the other hand....
Here's Mr, Buffett in the 2008 Berkshire Hathaway annual report, wrapped by a February 2019 post:
Mr. Buffett, through his insurance companies, guarantees a few of the country's municipal bonds. Muni holders are often in conflict with public employee unions and/or public employee pension overseers, especially in the event of a municipal bankruptcy.
These guarantees usually take the form of credit default swaps.
In addition Berkshire Hathaway carries a small amount of munis as an asset on the consolidated balance sheet.Warren pays attention to this stuff. His 2008 Letter to Shareholders is a mini-masters course in moral hazard in the muni biz. Some copied out after the jump*****The class begins on page 13 of the 2008 letter....
Also, "Warren Buffett: Avoid States With Large Unfunded Pension Liabilities":
....The rest of the country has to begin planning now, immediately, how they will fight being forced to pay for Chicago's political and criminal corruption. Because you know, as sure as this old world keeps spinning around, that the Chicago politicians and their corrupt buddies in Congress, from many states but in particular New York and California, that they are already planning how to shake down the people who didn't cause this mess.
Chicago has had 90 years to get things just the way they wanted them. This is what they created.
And the Chicago mob and their ilk will run the shakedown through any or all of the institutions they can corrupt or control, the House of Representatives that holds the power of the purse, the Presidency and its powers of executive orders and the bureaucrats in its administrative state, including but not limited to the U.S. Treasury, and finally the Federal Reserve which seems to have some funny ideas about buying muni. paper....
